Taxpayers who have qualifying children under the age 18 at the end of 2021 can now get the full credit if they have little or no income from a job, business, or other source. Prior to 2021, the credit was worth up to $2,000 per qualifying child, with refundable portion limited to $1,400 per child. It has been increased to as much as $3,000 per child ages 6 – 17 at the end of 2021, and $3,600 per child ages 5 and under at the end of 2021.

The maximum credit is available to taxpayers with a Modified AGI of:

1. $75,000 or less for Single and Marries Filing Separate filers
   
2. $112,500 or less for Head of Household filers
   
3. $150,000 or less for Married Filing Joint filers

From July 15 through December 2021, the IRS will advance 50% of the 2021 child tax credit in monthly payments to eligible taxpayers. The monthly payment will be estimated from their 2020 tax returns. The remaining amount will be claimed on their 2021 income tax return.

If you did not file a tax return during 2020 you can use this tool to report qualifying children for 2020 non-filers:  https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool

Taxpayers may elect to opt-out from the monthly child tax credit payments to receive a large payment next year instead of seven smaller payments. This could be the case for families saving up for a big expense or those who have budgeted for that money to pay off outstanding debt. Also, your household circumstances or tax situation will change and don’t want to deal with having to update your information in the portal.

Taxpayers may opt-out use the Child Tax Credit Update Portal by July 1.

The Research & Development tax credit allows companies to claim a tax credit for qualifying research expenditures. If your company has invested in R&D, you may benefit from this tax credit.

The Arkansas Department of Finance and Administration has announced that effective March 15, 2021, all franchise taxes will go back to being paid to the Secretary of State. Franchise tax filing/payment through Arkansas Taxpayer Access Point (ATAP) who took on the role on January 1, 2021 no longer will be available beginning March 12, 2021 at 3:00 a.m. The Secretary of State will continue to be the first point of contact when starting a new business in Arkansas as well as any activity related to the organizational structure of an entity.

In a News Release, IRS has announced that tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 individual income tax year returns. It also provided additional filing season date information.

IRS said that the February 12 start date for individual tax return filers allows IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

In March 2020, the FFCRA (Families First Coronavirus Response Act) required employers with fewer than 500 employees to provide paid sick and family leave to employees affected by COVID-19 and provided affected employers with a corresponding employment tax credit.

The Treasury Department and the Internal Revenue Service are providing special tax filing and payment relief to individuals and businesses in response to the COVID-19 Outbreak. The filing deadline for tax returns has been extended from April 15 to July 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can’t file by the July 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request an extension to file their return.

If you drive for work, you may pay attention when the IRS updates the standard mileage rate used to deduct business driving expenses. The rate rises most years, but it also falls occasionally. That’s because mileage rates follow gas prices.

For 2017, the standard mileage rates are:

• 53.5 cents per mile for business miles driven, down from 54 cents for 2016.
• 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016.
• 14 cents per mile driven in service of charitable organizations.

What the tax reform bill means for individuals and business owners.

On 12/20/17, both the House (in a 224–201 vote) and the Senate (in a 51–48 vote) passed H.R. 1—commonly referred to as the Tax Cuts and Jobs Act (TCJA). The bill will be sent to President Trump, who is expected to sign it into law. Hailed as the largest major tax reform in over three decades, the TCJA contains a whole host of tax provisions that impact individuals and businesses.

This is the time of year to think about “harvesting” (or selling) depreciated stocks to offset any stock gains and possibly reduce your 2017 tax bill. Just keep in mind that:

Are you one of the 63 million American adults who volunteers for charity? Although there’s no tax deduction for the value of your time, you may be able to deduct unreimbursed costs related to:

You walk the straight and narrow, follow the law, file your taxes. But maybe you know of someone who doesn’t…

The IRS wants to hear from you – and will pay for concrete information leading to the collection of unpaid taxes. Whistleblower awards typically range between 15% and 30% of the outstanding taxes, penalties and interest collected.

Looking for ways to minimize your company’s 2017 tax bill? Consider the domestic production activities deduction (DPAD). Often referred to as “manufacturer’s deduction,” the DPAD can also be claimed by many construction engineering, oil and mining, software and other business.

Tax break help storm survivors

Survivors of Hurricanes Harvey, Irma and Maria ara tattered, but they’re also tough – and ready to rebuild. If you were affected by the storms (or another natural disaster), the casualty loss deduction can help. This tax break enables you to deduct the cost of damage to your home or personal property on your 2017 federal return.

Last month, a Massachussetts woman won the largest undivided Powerball jackpot. After she opted for a lump-sum payment, her prize of nearly $759 million shrunk to $480 million. But federal and state withholding took their toll as well – reducing her take-home amount to $336 million. She can expect to pay even more when she files her tax return.

This secure tool, available on IRS.gov allows taxpayers to view their IRS account balance, which will include the amount they owe for tax, penalties and interest. Taxpayers may also continue to take advantage of the various online payment options available by accessing any of the payment features including: direct pay, pay by card and Online Payment Agreement.

The new features added include the ability to:

• View up to 18 months of tax payment history
• View payoff amounts and tax balance due for each tax year
• Obtain online transcripts of various Form 1040-series through Get Transcript
• Give feedback on their experience with their online account and make suggestions for improvement.

One of the advantages of operating your own business is hiring family members.  If you are self-employed, hiring your children to work for you can provide spending money for them and tax savings for you. But make sure you follow the guidelines.

You may have a refund waiting for you.

DEADLINE – TUESDAY APRIL 18th

The IRS estimates $1 Billion in refunds for unfiled 2013 tax returns.  The IRS grants a 3 year window to file a tax return in order to receive a refund if you are owed one.  It is very interesting that so many people have not filed their 2013 tax return.  The IRS estimates the midpoint for potential refunds for 2013 at $763.

Although tax season doesn’t officially begin until next week, it is important to get ready and file as early as possible to avoid any unneeded stress by using these tips to prepare for the 2017 tax season now.

Here are a few tips to prepare for Tax Season 2017

As we near the 4^th quarter, small business owners and individuals should begin thinking ahead as the 2016 tax season is right around the corner.

The federal highway funding extension bill contains several tax provisions, including changing the due dates for partnership and corporate tax returns.  Other changes affect mortgage interest statements, basis of inherited assets, and the six-year statute of limitation.  Read more about it at http://www.journalofaccountancy.com/news/2015/jul/tax-return-due-dates-changed-201512746.html.

Earlier this month, the United States Department of Labor (DOL) published regulations that modified certain provisions of the Fair Labor Standards Act (FLSA). Specifically, the regulations increase the minimum salary for an employee to be exempt from FLSA overtime requirements. The following are some frequently asked questions regarding these changes.