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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.

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

Tax Tip – Small Business Forms

Small businesses should make sure to use the right form when filing employment tax returns

Some small businesses pay employment tax quarterly while others may pay it just once a year.

The IRS advises small business owners to review the rules for filing two commonly used employment tax returns. The two forms are:

   •  Form 941, Employer’s Quarterly Federal Tax Return
   •  Form 944, Employer’s Annual Federal Tax Return

These two forms are not interchangeable. A small business files one or the other. The employer should never flip-flop between the two forms on their own and should always file according to their designated filing requirement.

Here are some more details about these two forms.

Form 941, Employer’s Quarterly Federal Tax Return
   •  Employers use Form 941 to:
      – Report income taxes, Social Security tax, Medicare tax and additional Medicare tax withheld from employee’s wages, tips and other compensation.
      – Claim employment tax credits and adjustments
      – Report the amount of employment taxes owed or claim an overpayment of employment taxes.
   •  If the IRS advises the employer to file Form 941 quarterly, they must do so.

Form 944, Employer’s Annual Federal Tax Return
   •  This form is for employers who owe $1,000 or less. It allows them to report employment tax liabilities only once a year, instead of quarterly.
   •  This form can’t be used unless an employer receives official IRS notification that they are eligilble to use this form.
   •  Once the employer receives notice they can file Form 944, they must file this form every year.
   •  They must continue to file Form 944, regardless of the tax they owe, unless the IRS notifies them differently.

If a taxpayer is not sure which form they should file, they can call the IRS at 800-829-4933 or 267-941-1000.

Source: IRS

More information:
Form 941 Instructions
Form 944 Instructions
Publication 15, Circular E, Employer’s Tax Guide

Tax Tip – Charitable Donations

Here’s how taxpayers can check if their charitable donation is tax deductible

The arrival of the holiday season is when many people think about how they can give back. Often taxpayers want to donate to a charity. The IRS has a tool that can help people figure out if giving to their favorite cause will also give them the gift of a tax deduction.

Tax Exempt Organization Search on IRS.gov allows users to search for tax-exempt charities. Taxpayers can use this tool to determine if donations they make to an organization are tax-deductible charitable contributions.

Here are some key features and functions of the TEOS tool:

  • It provides information about an organization’s federal tax status and filings.
  • Donors can use it to confirm that an organization is tax-exempt and eligible to receive tax-deductible charitable contributions.
  • Users can find out if an organization had its tax-exempt status revoked.
  • Organizations are searchable by legal name or a doing business as name on file with the IRS.
  • The search results are sortable by name, Employee Identification Number, state and country.

Users can also download complete lists of organizations eligible to receive deductible contributions, auto-revoked organizations and e-Postcard filers using links on the Tax Exempt Organization Search page of IRS.gov.

Source, IRS:
Tax Exempt Organization Search: Frequently Asked Questions
How the CARES Act changes deducting charitable contributions
Interactive Tax Assistant, Can I Deduct my Charitable Contributions