Important announcement: Due to the number of COVID-19 cases in our area, our office will not be holding in-person appointments for clients during this tax season. Click here or read the COVID-19 Precautions section of this newsletter for more info.

Tax Tip of the Month: What to do if you get a letter from the IRS about your stimulus payment

This year's tax season has come with many unusual complications, and one that is shaping up to be problematic is the need for taxpayers to report any economic stimulus payments they have received from the IRS on their tax return. These are the payments that were sent out directly to eligible taxpayers from the government at multiple points during the pandemic, in order to lessen the economic hardships encountered by many Americans during this challenging time. In an effort to ensure that everyone got the payments that were due to them, the IRS requires taxpayers to report these payments on their tax return. If someone didn't get as much as they should have, then the IRS will give them a tax credit to make up the difference. The problem that is arising, though, is that some people have accidentally failed to report all or some of the stimulus payments that they received. If the IRS were to give those people a tax credit based on what they reported, it would effectively be as if they were getting an additional stimulus payment that they weren't eligible for. This is why many people are now getting letters from the IRS notifying them that there is a difference between the economic stimulus payments they reported on their tax return, and what the IRS records indicate they received. If you, as a client of our firm, get one of these letters, contact our office and send us a copy of the letter. We will advise you on the proper course of action based on your situation.

Automatic extension filed for prior year clients As is our practice, we have automatically filed an extension for both Federal and state returns for any clients we served last tax season who have not yet filed a tax return (the deadline for filing was on May 17th). That means there will be no late filing penalty for those individuals; however, if they owe the IRS taxes they will have to pay interest on those taxes covering the time between the original deadline and when they pay the taxes. The Federal deadline for extended returns is October 15th.

Reminder about change in taxable unemployment benefits In last month's newsletter, we covered some of the key provisions of the American Rescue Plan recently passed by Congress. We wanted to remind people about one of those provisions, which is that if you have received unemployment benefits during the past year, the first $10,200 will not be taxed by the Federal government. This is a very unusual and perhaps unprecedented situation, because it effectively changes tax law in the middle of tax season after some returns had already been filed. If you are impacted by that provision and filed your tax return before this law was passed, the current IRS guidance is that you should NOT file an amended return. Instead, they are saying that they will analyze all returns that are impacted by this situation, and if necessary issue tax refund checks to those who qualify.

COVID-19 Precautions for Tax Season As a reminder, our office will not be holding in-person appointments for clients during this tax season. An online portal will be set up for all clients for the purposes of sending and receiving documents. Clients can use this online portal, the dropbox outside our office, or mail to send us their completed tax organizers and any other documents they need to send us.  If clients want to have a meeting to discuss their tax situation, phone meetings or online meetings via Zoom will be available. Clients must submit their completed tax organizers and/or other relevant documents at least one day in advance of the meeting. Finally, we will be setting up a system to allow clients to sign e-file forms and other forms electronically as another way to minimize physical contact. Thank you in advance for your understanding and cooperation as we work to keep everyone as safe as possible during these difficult times.

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Picture of the Month For the May picture of the month, we have a beautiful shot of a "tax season rainbow" on Ben's farm.

Latest Firm News

We have finally reached the end of one of the most challenging tax seasons in living memory. Not only did we have to deal with numerous unique tax-related issues such as economic stimulus payments, PPP loans, and many others, we also (like all other businesses) had to find a way to safely serve our clients in the middle of a pandemic. We want to thank our clients for their understanding an patience during this challenging time. Rest assured that until although the tax filing deadline has passed, we will continue to work at our tax season pace until all extended returns have been completed.

Featured Video: Working for the IRS It's college graduation season, which means a new generation of young graduates looking for their first "real" job. For this month's featured video, we link to an IRS playlist of videos about various careers available at the agency, from information technology officer to public affairs specialist.

Featured Resource: SBA Business Guide

The past year has been one of the most disruptive years many people have experienced in their lifetime. Only time will tell what the long-term implications of the COVID-19 pandemic are for the way we work, communicate, and educate our children, but one effect that is already evident is that many people are re-evaluating their career choices based on the events of the past year. If you are thinking about making the leap from employee to entrepreneur, a good place to start is the Small Business Administration's Business Guide, which has excellent resources for anyone interested in starting a business.

Featured Customer: Martin Monument Company

Located in Lunenburg County, Virginia we've served the surrounding communities since 1977 in the personalization and customization of cemetery monuments along with public, church and business stone products. Martin Monument Company was founded in 1977 by Charles and Lottie Martin. Both started in the monument business in 1966, learning their trade from Lottie’s parents and grandparents who were lifelong monument professionals. The tradition has been carried on bytheir son Ken and his wife Jane who now operate the business as a 4th generation monument company. We handle all aspects of design and installation and as a family owned business we value the one on one interaction between our staff and our customers to ensure 100% satisfaction with every product. Along with the quality of workmanship expected from us we also understand the importance of pricing especially in today's economy. We're proud that our customers continue to call us for all of their monument and stone needs. Please feel free to browse our website to learn about the various materials, designs and choices available. If you have any questions, please do not hesitate to contact us. Martin Monument Company services most of Virginia as well as portions of North Carolina, Maryland, and Washington D.C.