NEWS & ANNOUNCEMENTS
2022 & 2023 EV TAX CREDITS DO YOU APPLY?
"What happens to the EV tax credit for electric vehicles purchased in 2022? The Inflation Reduction Act offers some relief for EV buyers who had written, binding sales contracts from 2022 to purchase EVs that will be placed in service (which for IRS purposes means, “delivered”) on or after, August 16, 2022, or in 2023.
EV Tax Credit Income Limits
The Inflation Reduction Act also imposes income limits on who can claim the credit.
If you’re single, and your modified adjusted gross income is over $150,000, you won’t qualify for the EV tax credit. The EV tax credit income limit for married couples who are filing jointly is $300,000. And if you file as head of household and make $225,000 or more, you also won’t be able to claim the electric vehicle tax credit."
IRS Link to Eligible Vehicles just click the button.
Tax Tip | How to Estimate Tax Liability Form 4868
"Any time you can't complete your federal income tax return by the mid-April deadline you need to get an extension. You can do this by filing a Form 4868, either by mail or electronically, but you must do it before the tax deadline and you must estimate any amount you owe and pay that before the deadline."
Tax Tip | Avoid The Double Tax Trap When Making Non-Deductible IRA Contributions
"Anyone with earned income can make a non-deductible (after tax) contribution to an IRA and benefit from tax-deferred growth. But it may not be worth it due (in part) to often overlooked ongoing recordkeeping requirements. For many, the biggest risk and most common downfall is significant: paying taxes again when withdrawing the money in retirement. Before making after-tax contributions to a traditional IRA, understand the rules to avoid the double tax trap on withdrawals."
Tax News | IRS Backlog Hits Nearly 24 Million Returns, Further Imperiling The 2022 Tax Filing Season
"Nearly 24 million taxpayers are still waiting for the Internal Revenue Service to process their tax returns from last year — a number far larger than previously reported by the agency — with many refunds being held up for 10 months or more."
IRS News | Get Ready For Taxes: What's New And What To Consider When Filing In 2022
"Check on advance Child Tax Credit payments.
Families who received advance payments will need to compare the advance Child Tax Credit payments that they received in 2021 with the amount of the Child Tax Credit that they can properly claim on their 2021 tax return."
"Economic Impact Payments and claiming the Recovery Rebate Credit.
Individuals who didn't qualify for the third Economic Impact Payment or did not receive the full amount may be eligible for the Recovery Rebate Credit based on their 2021 tax information. They'll need to file a 2021 tax return, even if they don't usually file, to claim the credit."
Tax News | IRS Is Sending Out CP12 Notices To Taxpayers. Here’s What It Means
"The Internal Revenue Service is sending out warning “math error” notices to millions of Americans in what’s called a CP12 Notice. The notices mean the IRS either has questions or changes are being made to your tax return."
If you receive a CP12 letter from the IRS, it is likely the IRS believes you might have missed reporting income and/or 2020 stimulus reporting amounts were reported in error. The best way to respond to this letter is by supplying information supporting your original numbers. Also make sure you document, for your records, that you mailed a response. This is important in the event that the IRS does not receive your response. This has been a big issue this year and we forecast the 2021 tax year will be even worse due to early child tax credits and stimulus distributions.
- Kurt Romischer
Tax News | Child Tax Credit Payment Schedule for 2021
"The IRS sent the sixth and final round of child tax credit payments to approximately 36 million families on December 15. Dates for earlier payments are shown in the schedule below. As it stands right now, the payments won't continue into 2022. However, President Biden and many members of Congress want to extend them beyond this year. So, there's a chance the IRS will still be sending monthly payments next year, too."
Tax News | 2021 Advance Child Tax Credit
"One of the most significant changes for 2021 was to the child tax credit, which is claimed by tens of millions of parents every year. The child tax credit for the 2021 tax year is bigger and better than ever, when compared to 2020. The credit amount was significantly increased, and the IRS made monthly advance payments to qualifying families from July through December 2021."
Tax News | IRS is Holding Over 29 Million Returns & Delaying 2020 Refunds
"The Internal Revenue Service is holding 29 million returns for manual processing — delaying refunds for many — because of pandemic-related law changes, processing errors, and fraud detection."
“As one would expect, IRS employees are stretched thin working through the manual processing of these returns,” National Taxpayer Advocate Erin Collins wrote in her blog. “So if a taxpayer’s return is pulled for manual processing, there will be delays.”
Tax News | IRS to Delay 2020 Tax Season to May 15th After Chaotic Year
"The IRS is still figuring out what the final deadline will be. The agency is considering setting the filing deadline either on May 15 or May 17, according to two of the people, who were not authorized to speak publicly because the decision had not been finalized. May 15 is a Saturday and the IRS typically delays filing deadlines that fall on a weekend or holiday to the next business day."
Tax News | How Much Will My Family Receive?
"President Biden signed the American Rescue Plan Act on March 11. Provisions in the bill authorize another round of $1,400 stimulus checks for each eligible person ($2,800 for couples), plus an additional $1,400 for each dependent. However, as with the first- and second-round payments, the third-round stimulus checks will be reduced – or eliminated – for people with an income above a certain amount."
Announcement | Pacific Tax West Seattle Client Reviews
"Kurt has been doing our taxes for four years and is knowledgeable, responsive, quick and always gets us the best tax refund! He just moved his office from Ballard to West Seattle to work in his own neighborhood, and we're happy to have him here! With a small business, a home, investments and kids, having Kurt do our taxes is a huge weight lifted. He's quick to answer questions and is always up to date on the latest tax code. We highly recommend Pacific Tax West Seattle. Don't hesitate to hire Kurt!"
- Sarah L. of West Seattle
"Kurt is AWESOME! I have been working with him for many years and he always provides first class service! He is super thorough and is great with answering all of my questions every single year. Kurt takes the time to really explain and review your taxes with you in a way that makes sense to us non-tax people that is also fun and easy to understand!
Kurt will always look for ways to help you in the upcoming year as well when it comes to pre-tax contributions to help maximize future returns. I honestly accredit him for my higher 401k contributions which I was severely slacking on. Kurt is the best!"
- Rachel H. of Kirkland WA
"Kurt has been doing my taxes as long as I can remember. Being in tech my income tends to be spikey with lot's of moving parts like RSUs and bonuses and he does a great job keeping me straight. I would recommend going to Pacific Tax West Seattle to anyone looking for an accountant who understands the way we work."
- Aaron Q. of Lacey WA
IRS News | When to Expect Your Refund if You Claimed the Earned Income Tax Credit or Additional Child Tax Credit
If you claimed the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC), you can expect to get your refund by the first week of March if:
You e-file your return
You choose to get your refund by direct deposit
We found no issues with your return
How to Track Your Refund
Check the status of your refund:
IRS News | First and Second Economic Impact Payments Issued; Those Eligible Can Claim Recovery Rebate Credit
"If individuals didn't receive a payment – or if they didn't receive the full amounts – they may be eligible to claim the Recovery Rebate Credit and must file a 2020 tax return. Eligibility for and the amount of the Recovery Rebate Credit are based on 2020 tax year information while the Economic Impact Payments were based on 2019 tax year information. For the first Economic Impact Payment, a 2018 return may have been used if the 2019 was not filed or processed."
IRS News | Tax Filing Season Begins February 12, 2021
"The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns. The February 12 start date for individual tax return filers allows the 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."