TAXES 2021

 

Tax Returns

beverlyhillsaccountant90210February 19, 2022Beverly Hills AccountingEdit"Tax Returns"

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Tax Returns
Most state and federal agencies require employers to report using tax returns for both employer and
employees quarterly. These returns usually include the employee’s:
• Name
• Social security number
• Gross wages paid for the quarter
This information is used to verify an employee’s eligibility for state unemployment insurance and the amount of compensation benefits to be paid. Tax returns are also used to reconcile the tax deposits remitted; some tax payments can be sent when the return is filed

Form 941: Employer’s
Quarterly Federal Tax Return
Reports wages and taxes for federal income tax,
employee social security and Medicare tax, and
employer social security and Medicare tax.
Quarterly

Form 940: Employer’s
Annual Federal
Unemployment Tax Return
Reports wages and taxes for FUTA. Although
deposits are made quarterly if FUTA tax liability is
$500 or more, the return itself is still filed annually.
Quarterly deposits
if over $500;
annual filing

Form W-2: Wage and
Tax Statement
Reports individual employee wages and taxes.
One copy is given to employees; another copy is
filed with the Social Security Administration (SSA).
Annually

Form W-3: Transmittal of
Wage and Tax Statements
Summarizes information reported on Forms W-2.
Filed with the SSA along with copies of Forms W-2. Annually

SUI Reports wages and SUI tax on state-specific form. Quarterly

Withholding Reports wages and taxes for state and local
withholding. Varies by agency

Federal Tax Deposit Rules
• Federal Tax Deposit Rules
• Federal Tax Return Due Dates
• Federal Tax Deposit Due Dates
• End-of-Year Payroll Checklist

Federal Tax Payments
Effective January 1, 2011, federal taxes must be paid via the Electronic Federal Tax Payment System (EFTPS) unless
you owe $2,500 or less with your quarterly Form 941. Details for enrolling in EFTPS are available at eftps.gov.

2022 Payroll Tax Deposit
Rules, Regulations,
and Deadlines

FICA Limits 2021 2022
Social Security (OASDI) Wage Base $142,800 $147,000
Medicare Wage Base No Limit No Limit
Social Security Percentage 6.2% 6.2%
Medicare Percentage 1.45% (2.35% for individuals 1.45% (2.35% for individuals
earning over $200,000) earning over $200,000)
Maximum Social Security Withholding $8,853.60 $9,114.00
Maximum Medicare Withholding No Limit No Limit
Maximum FICA Withholding No Limit No Limit

For self-employed individuals, the 2022 social security wage base is $147,000 with the social security tax rate remaining at 12.4%. There is no Medicare
wage limit, and the Medicare tax rate remains at 2.9% (3.8% for those individuals earning more than $200,000). The tax applies to the net earnings from self-employment.

Source: Paychex

Stimulus Payment. Do I owe tax on the money I received?

 Stimulus Payment. Do I owe tax on the money I received?

The Economic Impact Payments that were sent to almost 160 million people was one thing about last year that many of us appreciated.

But if you received a stimulus payment, you might be wondering if you are expected to pay it back or how it may affect your taxes. Here are answers to some of the questions that you may have to help put your mind at ease.

Do I owe tax on the money I received? That is an easy one; the answer is no. The stimulus payments were designed to help the economy and not affect your taxes. If you received a stimulus payment, it would not reduce your 2020 refund or increase your tax due.

Why didn’t I get a payment? If your income for 2019 or 2018 was over $75,000 ($150,000 if you filed jointly, $112,500 if you were head of household), then your payment was reduced by $5 for every excess $100 you earned. And if you did not file a tax return for either year, you may not have received a payment. You can track your stimulus payments at the IRS’s online tool.

What if I should have received a stimulus payment but did not? First, if you were supposed to file a 2019 tax return but did not, be sure to file right away. If your income was too low to file, at IRS.gov you can click on the tab marked “Non-filers” and fill in your necessary information. If the IRS determines you are eligible for a payment, they will send it to you.

What if my 2020 income decreased? If you were not eligible for a stimulus payment based on your 2018 and 2019 tax returns, but your income dropped significantly in 2020, you may be eligible to claim the Recovery Rebate Credit when you file your 2020 tax return.

My 2020 income increased – will the government want the money back? No. If you received a stimulus payment based on a lower income in 2019, that payment is yours to keep even if your income increased above the threshold in 2020.

IRS Gives Stimulus Check Distribution

Check IRS.gov for the latest information: 

No action needed by most people at this time

IR-2020-61, March 30, 2020

WASHINGTON — The Treasury Department and the Internal Revenue
Service today announced that distribution of economic impact payments
will begin in the next three weeks and will be distributed automatically, with
 no action required for most people. However, some seniors and others
who typically do not file returns will need to submit a simple tax return to
receive the stimulus payment.

Who is eligible for the economic impact payment?

Tax filers with adjusted gross income up to $75,000 for individuals 
and up to $150,000 for married couples filing joint returns will receive 
the full payment. For filers with income above those amounts, the payment 
amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. 
Single filers with income exceeding $99,000 and $198,000 for joint filers 
with no children are not eligible.

Eligible taxpayers who filed tax returns for either 2019 or 2018 will 
automatically receive an economic impact payment of up to $1,200 
for individuals or $2,400 for married couples. Parents also receive $500
for each qualifying child.

How will the IRS know where to send my payment?

The vast majority of people do not need to take any action. The IRS will
calculate and automatically send the economic impact payment to those eligible.

For people who have already filed their 2019 tax returns, the IRS will use this
information to calculate the payment amount. For those who have not yet filed
their return for 2019, the IRS will use information from their 2018 tax filing to
calculate the payment. The economic impact payment will be deposited directly
into the same banking account reflected on the return filed.

The IRS does not have my direct deposit information. 

What can I do?

In the coming weeks, Treasury plans to develop a web-based portal for
individuals to provide their banking information to the IRS online, so that
individuals can receive payments immediately as opposed to checks in the mail.

I am not typically required to file a tax return. Can I still receive 

my payment?

Yes. People who typically do not file a tax return will need to file a simple tax
return to receive an economic impact payment. Low-income taxpayers, senior
citizens, Social Security recipients, some veterans and individuals with disabilities
who are otherwise not required to file a tax return will not owe tax.

How can I file the tax return needed to receive my economic 

impact payment?

IRS.gov/coronavirus will soon provide information instructing people in these
groups on how to file a 2019 tax return with simple, but necessary, information
including their filing status, number of dependents and direct deposit bank
account information.

I have not filed my tax return for 2018 or 2019. 

Can I still receive an economic impact payment?

Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax 
return for 2018 or 2019 to file as soon as they can to receive an economic impact 
payment. Taxpayers should include direct deposit banking information on the return.

I need to file a tax return. How long are the economic impact 

payments available?

For those concerned about visiting a tax professional or local community
organization in person to get help with a tax return, these economic impact
payments will be available throughout the rest of 2020.

Where can I get more information?

The IRS will post all key information on IRS.gov/coronavirus as soon as it
becomes available.

The IRS has a reduced staff in many of its offices but remains committed to
helping eligible individuals receive their payments expeditiously. Check for updated
information on IRS.gov/coronavirus rather than calling IRS assistors who are
helping process 2019 returns.

Page Last Reviewed or Updated: 31-

IT'S TAX TIME - GET YOUR W2 FORMS READY- IRS.GOV

Attention: click here to access PDF W2 Form

You may file Forms W-2 and W-3 electronically on the SSA’s Employer W-2 Filing Instructions and Information web page, which is also accessible at www.socialsecurity.gov/employer. 

You can create fill-in versions of Forms W-2 and W-3 for filing with SSA. 

You may also print out copies for filing with state or local governments, distribution to your employees, and for your records. 

Note: 

Copy A of this form is provided for informational purposes only. 

Copy A appears in red, similar to the official IRS form. 

The official printed version of this IRS form is scannable, but the online version of it, printed from this website, is NOT. 

Do NOT print and file Copy A downloaded from this website with the SSA; a penalty may be imposed for filing forms that can’t be scanned. 
See the penalties section in the current General Instructions for Forms W-2 and W-3, available at www.irs.gov/w2, for more information. 

Please note that Copy B and other copies of this form, which appear in black, may be downloaded, filled in, and printed and used to satisfy the requirement to provide the information to the recipient. 

To order official IRS information returns such as Forms W-2 and W-3, which include a scannable 

Copy A for filing, go to IRS’ Online Ordering for Information Returns and Employer Returns page, or visit www.irs.gov/orderforms and click on Employer and Information returns. 

We’ll mail you the scannable forms and any other products you order. See IRS Publications 1141, 1167, and 1179 for more information about printing these tax forms.

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General Instructions for Forms W-2 and W-3 (2019)

(Including Forms W-2AS, W-2CM, W-2GU, W-2VI, W-3SS, W-2c, and W-3c)

Section references are to the Internal Revenue Code unless otherwise noted.

2019

---

General Instructions for Forms W-2 and W-3 - Introductory Material

Future Developments

For the latest information about developments related to Forms W-2 and W-3 and their instructions, such as legislation enacted after they were published, go to IRS.gov/FormW2.

Source: www.IRS.GOV

Taxpayer Rights

Tax season is approaching, be aware you have rights if it comes problem when paying your personal or business tax:

The Tax Payer Bill of Rights 10 crucial points:

Examination

The IRS accepts most returns as filed but if your return is audited, you have rights. If the IRS proposes additional tax and you don’t agree that you owe it, you have the right to challenge that decision.

• Publication 556: Examination of Returns, Appeal Rights, and Claims for Refunds

Collection
 

If the IRS moves to collect overdue tax from you, you have rights. If you owe tax but can’t pay in full, you may be able to pay in installments or appeal the collection action.

• Publication 5107: The IRS Collection Process: Your Rights and Responsibilities

• Publication 594: The IRS Collection Process

• Frequently Asked Questions for IRS Collection Procedures

• Online Payment Arrangement Application

Appeals


You have the right to appeal many actions the IRS taken in examination and collection.

• 
  
  
  
  
  
  • Topic 151: Your Appeal Rights
  
  
  
  
  
  • Publication 5: Your Appeal Rights and How to Prepare a Protest if You Don't Agree
• • Source: www.IRS.GOV

New Business Mileage Reimbursement Rates in 2020

On Dec. 31. 2019, the Internal Revenue Service (IRS) issued the 2020 optional standard mileage rates, which are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 57.5 cents per mile driven for business use (down from 58 cents in 2019);
• 17 cents per mile driven for medical or moving purposes (down from 20 cents in 2019); and
• 14 cents per mile driven in service of charitable organizations (unchanged).
  

The following table summarizes the optional standard mileage rates for employees, self-employed individuals, or other taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.

Source: IRS.GOV

401(k) contribution limit increases to $19,500 for 2020; catch-up limit rises to $6,500

The IRS announced this and other changes in Notice 2019-59 (PDF), posted today on IRS.gov. This guidance provides cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020.The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500. 

• For single taxpayers covered by a workplace retirement plan, the phase-out range is $65,000 to $75,000, up from $64,000 to $74,000.

• For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $104,000 to $124,000, up from $103,000 to $123,000.

• For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple's income is between $196,000 and $206,000, up from $193,000 and $203,000.

• For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is $124,000 to $139,000 for singles and heads of household, up from $122,000 to $137,000. For married couples filing jointly, the income phase-out range is $196,000 to $206,000, up from $193,000 to $203,000. The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased from $19,000 to $19,500.

The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019.

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver's Credit all increased for 2020.

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his or her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his or her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) 

Here are the phase-out ranges for 2020:

The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income limit for the Saver's Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $65,000 for married couples filing jointly, up from $64,000; $48,750 for heads of household, up from $48,000; and $32,500 for singles and married individuals filing separately, up from $32,000.

Details on these and other retirement-related cost-of-living adjustments for 2020 are in Notice 2019-59 (PDF), available on IRS.gov.

Highlights of changes for 2020

Key limit remains unchanged