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It’s TaxQuips time from TaxMama.com®
Today TaxMama® wants talk to you about changes to this year’s filing season that you may have missed – or forgotten about.
We are getting close to another year’s initial filing deadline. This year, our April 15th deadline has moved to April 18th, giving us a few extra days to file. I am not going to repeat all the usual tips and deadline information – you can find last year’s links here. (Just disregard last year’s May due date.)
But if you haven’t filed your 2018 tax return yet and you want your refund – please file by the April 15th date, just to be safe. Trust me on this – it will save arguments with the IRS later. (Note: Some people say you can file until April 18th; others, that if your 2018 tax return was on extension, that you can file until October 15th. Why risk losing the refund? File now!) About $1.5 BILLION in refunds have been unclaimed and are about to expire.
Working on some tax returns last week, Lulu pointed out that some new forms that are now mandatory. Answering some TaxMama® Forum questions, I learned new information while researching answers – and was reminded about other information. So, I decided to find as many of those forms for you, so you don’t overlook them as I almost did. (I love her backing me up!) In addition, there may be tax provisions that have expired since last year. This may not be a complete list – and it may be random, as I find them or remember them:
- Form 8915F – Qualified Disaster Retirement Plan Distributions and Repayments. This is where 1/3rd of last year’s retirement plan deferred distributions gets reported this year. (Or repayments of those funds.)
The form was issued late. So if you have already filed your tax return and forgot to include this income – amend NOW before April 18th and consider submitting the payment via IRS Online Payments .
- For S Corporations – Form 7203 – S Corporation Shareholder Stock and Debt Basis Limitations. You now have to reconcile the taxpayer’s basis in their S corporation stock. For taxpayers who never really kept formal books, or a Balance Sheet, this is going to be a challenge.
- Net Operating Loss Carryback (NOL) – The special provisions allowing us to carry NOLs back for 5 years only applied to 2018, 2019, 2020. NOLs originating in 2021 can only be carried forward.
- Exception – Certain Farming NOLs can still be carried back to 2 years ago.
- Tuition and fees deduction (Schedule 1) – This ended last year. It might be renewed by Congress retroactively. But don’t hold your breath.
- Educator Expense – You have heard that this deduction rises to $300 (from $250). Forget it. That takes effect for the 2022 tax return.
- Virtual Currency – The checkbox on page 1 of the Form 1040/1040SR applies if you had any transactions with your virtual currency account whatsoever.
- Required Minimum Distributions (RMDs) – Seniors who turned age 72 in 2021 must have taken their RMDs for 2021 by April 1, 2022. If you missed that deadline, do it now and try to convince your financial institution to code it as a 2021 distribution. Otherwise, you will have to ask the IRS to waive the 50% penalty. And remember, you also need to take the RMD for 2022 before year-end.
- Partnership Schedule K-2 and K-3 – We have a reprieve from mandatory inclusion in 2021’s partnership and S corporation tax returns. This relates to information on any kind of foreign transactions whatsoever – by the entity, or by the taxpayers on their personal tax return. This will be such fun next year!
- Form 8962 Premium Tax Credit – For tax years 2021 and 2022, Congress eliminated the limitation that a taxpayer’s household income may not exceed 400% of the federal poverty line, generally increases the credit amounts, and makes it available to people on unemployment. If you don’t know what this is – this is the healthcare premiums the government pays on your behalf via the MarketPlace or your state equivalent.
There are probably many things I am overlooking. A good place to see more changes is the “What’s New” section of all IRS publications and forms instructions. For individual taxes, Publication 17 is a good place to look. For businesses, there is a little information in Publication 334. For businesses, though, please be aware that there are a great many complexities because of the PPP loans and a variety of employee-related tax credits. You may need a tax pro, who is totally in tune with these changes, to help you. Not all of us are – which is why many tax pros are retiring this year. Sigh.
And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion
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