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Second Economic Impact Payments

Millions of taxpayers will receive their second Economic Impact Payments by debit card

The Treasury Department and the IRS are issuing millions of second Economic Impact Payments by prepaid debit card to speed delivery of the payments to as many people as possible.

If the Get My Payment tool on IRS.gov shows a date that a recipient’s payment was mailed, they should watch their mail for either a paper check or debit card. The debit cards arrive in a white envelope that prominently displays the U.S. Department of the Treasury seal.

The prepaid debit card, called the Economic Impact Payment card, is issued by Treasury’s financial agent, MetaBank®, N.A. The IRS does not determine who receives a card.


The form of payment for the second mailed EIP may be different than the first mailed EIP. Some people who received a paper check last time might receive a prepaid debit card this time, and some people who received a prepaid debit card last time may receive a paper check.

EIP Cards are safe, convenient and secure
These cards provide certain protections against fraud, loss and other errors. They can be used to make purchases online or in stores anywhere Visa® Debit Cards are accepted.

Cardholders can also use the cards to do any of the following without paying a fee:

  • Transfer funds to a personal bank account
  • Make signature or PIN-debit purchases anywhere Visa Debit
  • Cards are accepted — in stores, online or over the phone
  • Get cash back with a PIN debit purchase where available
  • Get cash from in-network ATMs
  • Get a replacement EIP Card, if needed
  • Check their card balance online, through a mobile app or by phone

People should watch their mail carefully
EIP Cards are being sent in a white envelope that prominently displays the U.S. Department of the Treasury seal. The envelope also states “Not a bill or an advertisement. Important information about your Economic Impact Payment.” The EIP Card has the Visa name on the front of the card and the issuing bank name, MetaBank®, N.A. on the back. Each mailing will include instructions on how to securely activate and use the EIP Card. These cards are being issued to eligible recipients across all 50 states and the District of Columbia. Residents of the western United States are generally more likely to receive an EIP Card.

People can check the status of their payment using the Get My Payment tool on IRS.gov.

PPP 2.0

The second round of PPP Loans is coming. Here’s what you need to know:

The new law allows some businesses to apply for a second loan. To qualify, businesses must have spent all of their first loan, have less than 300 employees and prove that they lost 25% or more of revenue in any quarter in 2020 either on a quarterly or annual basis.

“During the first round of PPP, a lot of businesses had a hard time even gathering what their net income was because they didn’t have proper bookkeeping,” said Sheneya Wilson, CPA and founder of Fola Financial in New York. “Now, you kind of have to show comparative statements.”

That means businesses will generally need to have their 2019 tax return on hand as well as profit and loss records to show that they’ve had at least one quarter where revenue fell 25% or more. A tax professional will be able to help businesses make sure they’re eligible and have the correct documentation, said Wilson.

These second loans will be made on a similar recommendation to the first round of PPP – 2.5 times payroll costs – and will also be capped at $2 million.

Source: https://www.cnbc.com/2021/01/07/small-businesses-should-prepare-for-the-second-round-of-ppp-loans-.html

AABS Inc. is here to help you through the process.
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Tax Tip – Wage Statements Due Feb. 1st

February 1 is the deadline for employers to issue and file wage statements

Employers must file Form W-2 and other wage statements by Monday, February 1, 2021. This is also the date Form W-2s are due to employees.

By law, employers are required to file copies of their Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by January 31. However, since January 31 falls on a Sunday in 2021, the deadline is the next business day, Monday, February 1.

Form 1099-MISC, Miscellaneous Income and Form 1099-NEC, Nonemployee Compensation, are also due to recipients on February 1, 2021, with some exceptions. Other due dates related to Form 1099 are listed in the instructions for these forms.

Timely filing helps prevent fraud.
Filing wage statements on time and without errors is beneficial to employers and the IRS. The employer avoids penalties, and the IRS has time to verify income taxpayers report on their tax returns, which helps prevent fraud.

E-file is the quickest, most accurate and convenient way to file these forms. The law requires certain filers who file 250 or more information returns for any calendar year to file electronically.

Employers should plan and prepare early.
Good preparation now can help employers avoid problems later. For instance, employers can start by verifying or updating employee information, such as:
   •  Names
   •  Addresses
   •  Social Security numbers
   •  Individual Taxpayer Identification Numbers

Employers should be sure their account information is current and active with the Social Security Administration as soon as possible. Lastly, employers should order paper Form W-2s, if needed.

Automatic extensions of time to file Form W-2s are not available. The IRS will only grant extensions for very specific reasons. For details, employers should read the instructions for Form 8809, Application for Extension of Time to File Information Returns.

More information:
Form W-2 and W-3 instructions
Information Return Penalties

Source: IRS

7 Tax Changes for 2021

The coronavirus pandemic has caused more changes than the usual yearly differences when you sit down to do your taxes for 2020 during the new year.

You’ll want to be aware of all the new limits, deductions and credits that can help increase your refund — and give you more money to save and invest, or pay off debt. Here are seven of the biggest tax changes for the 2021 filing season.

 

1. Simplified charitable deductions

2. Retirees needn’t worry about RMDs

3. Raised income brackets

4. Higher standard deductions

5. Health savings account (HSA) limits increased

6. Higher income limits for the saver’s credit

7. No tax if your boss helped with your student debt

 

Questions? AABS Inc. is here to help you through the process!
Give us a call to get started today 919-303-3345.

Full Details here: https://finance.yahoo.com/news/7-biggest-tax-changes-2021-224400711.html