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Velie Consulting Services, LLC
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Treasury issues millions of second Economic Impact Payments by debit card

1/7/2021

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​WASHINGTON – Starting this week, the Treasury Department and the Internal Revenue Service are sending approximately 8 million second Economic Impact Payments (EIPs) by prepaid debit card.
 
These EIP Cards follow the millions of payments already made by direct deposit and the ongoing mailing of paper checks that are delivering the second round of Economic Impact Payments as rapidly as possible.
 
For those who don’t receive a direct deposit, they should watch their mail for either a paper check or a prepaid debit card. To speed delivery of the payments to reach as many people as soon as possible the Treasury’s Bureau of Fiscal Service is sending payments out by prepaid debit card.
 
IRS and Treasury urge eligible people who don’t receive a direct deposit to watch their mail carefully during this period. The prepaid debit card, called the Economic Impact Payment card, is sponsored by the Bureau of the Fiscal Service and is issued by Treasury’s financial agent, MetaBank®, N.A. The IRS does not determine who receives a prepaid debit card.
 
Taxpayers should note that 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.
WASHINGTON – Starting this week, the Treasury Department and the Internal Revenue Service are sending approximately 8 million second Economic Impact Payments (EIPs) by prepaid debit card.
 
These EIP Cards follow the millions of payments already made by direct deposit and the ongoing mailing of paper checks that are delivering the second round of Economic Impact Payments as rapidly as possible.
 
For those who don’t receive a direct deposit, they should watch their mail for either a paper check or a prepaid debit card. To speed delivery of the payments to reach as many people as soon as possible the Treasury’s Bureau of Fiscal Service is sending payments out by prepaid debit card.
 
IRS and Treasury urge eligible people who don’t receive a direct deposit to watch their mail carefully during this period. The prepaid debit card, called the Economic Impact Payment card, is sponsored by the Bureau of the Fiscal Service and is issued by Treasury’s financial agent, MetaBank®, N.A. The IRS does not determine who receives a prepaid debit card.
 
Taxpayers should note that 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.
WASHINGTON – Starting this week, the Treasury Department and the Internal Revenue Service are sending approximately 8 million second Economic Impact Payments (EIPs) by prepaid debit card.
 
These EIP Cards follow the millions of payments already made by direct deposit and the ongoing mailing of paper checks that are delivering the second round of Economic Impact Payments as rapidly as possible.
 
For those who don’t receive a direct deposit, they should watch their mail for either a paper check or a prepaid debit card. To speed delivery of the payments to reach as many people as soon as possible the Treasury’s Bureau of Fiscal Service is sending payments out by prepaid debit card.
 
IRS and Treasury urge eligible people who don’t receive a direct deposit to watch their mail carefully during this period. The prepaid debit card, called the Economic Impact Payment card, is sponsored by the Bureau of the Fiscal Service and is issued by Treasury’s financial agent, MetaBank®, N.A. The IRS does not determine who receives a prepaid debit card.
 
Taxpayers should note that 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.
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February 1 is the deadline for employers to issue and file wage statements

1/4/2021

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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.
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Most taxpayers can deduct up to $300 in charitable contributions without itemizing deductions

12/14/2020

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Following tax law changes, cash donations of up to $300 made this year by December 31, 2020 are now deductible without having to itemize when people file their taxes in 2021.

The Coronavirus Aid, Relief and Economic Security Act includes several temporary tax law changes to help charities. This includes the special $300 deduction designed especially for people who choose to take the standard deduction, rather than itemizing their deductions.

This change allows individual taxpayers to claim a deduction of up to $300 for cash donations made to charity during 2020. This deduction lowers both adjusted gross income and taxable income – translating into tax savings for those making donations to qualifying tax-exempt organizations.

Before making a donation, taxpayers should check the Tax Exempt Organization Search tool on IRS.gov to make sure the organization is eligible for tax deductible donations.

Cash donations include those made by check, credit card or debit card. They don't include securities, household items or other property. Though cash contributions to most charitable organizations qualify, some don’t. People should review Publication 526, Charitable Contributions for details. Cash contributions made to supporting organizations are not tax deductible.
The CARES Act includes other temporary allowances designed to help charities. These include higher charitable contribution limits for corporations, individuals who itemize their deductions and businesses that give food inventory to food banks and other eligible charities. For more information, visit the Coronavirus Tax Relief page of IRS.gov.

By law, recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes getting a receipt or acknowledgement letter from the charity before filing a return and retaining a cancelled check or credit card receipt.
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Identity Protection PIN Program will soon be available to taxpayers nationwide

12/9/2020

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In January, the IRS Identity Protection PIN Opt-In Program will be expanded to all taxpayers who can properly verify their identity.
An identity pretention PIN is a six-digit number assigned to eligible taxpayers to help prevent their Social Security number from being used to file fraudulent federal income tax returns. This number helps the IRS verify a taxpayer’s identity and accept their tax return. The online Get An IP PIN tool immediately displays the taxpayer’s assigned number.
This tool uses Secure Access authentication verify a person’s identity. Taxpayers should review the Secure Access requirements before they try to use the Get An IP PIN tool.
Other ways to get an IP PIN
There are other ways to get an IP PIN if someone is unable to pass the Secure Access authentication. Taxpayers with income of $72,000 or less should complete Form 15227 and mail or fax it to the IRS. An IRS employee will call the taxpayer to verify their identity using a series of questions. Those who pass authentication will receive an IP PIN the following tax year.
Taxpayers who cannot verify their identities remotely or who are ineligible to file Form 15277 should make an appointment, visit a Taxpayer Assistance Center and bring two forms of picture identification. This is an in-person identity verification. After the taxpayer passes authentication, an IP PIN will be mailed to them within three weeks.
Taxpayers should never share their IP PIN with anyone but their tax provider. The IRS will never call to request the taxpayer’s IP PIN, and taxpayers must be alert to potential IP PIN scams.

Here’s what taxpayers need to know before applying:
  • The Get an IP PIN tool will be available in mid-January.
  • This is the preferred method of obtaining an IP PIN and the only one that immediately reveals the PIN to the taxpayer.
  • Taxpayers who want to voluntarily opt into the IP PIN program don’t need to file a Form 14039, Identity Theft Affidavit.
  • The number is valid for one year. Each January, the taxpayer must get a new one.
  • It must be entered correctly on electronic and paper tax returns to avoid rejections and delays.
  • Taxpayers with either a Social Security Number or Individual Tax Identification Number who can verify their identity are eligible for the program.
  • Any primary or secondary taxpayer or dependent can get an IP PIN, if they can prove their identity.
  • The IRS plans to offer an opt out feature to the IP PIN program in 2022.
Confirmed victims of tax-related identity theft
There is no change in the IP PIN Program for confirmed victims of tax-related identity theft. These taxpayers should still file a Form 14039 if their e-filed tax return rejects because of a duplicate SSN filing. The IRS will investigate their case and once the fraudulent tax return is removed from their account, they will automatically receive an IP PIN by mail at the start of the next calendar year.
IP PINs will be mailed annually to confirmed victims and participants enrolled before 2019. For security reasons, confirmed identity theft victims can’t opt out of the IP PIN program. Confirmed victims also can use the Get an IP PIN tool to retrieve lost IP PINs assigned to them.
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IRS warns people about a COVID-related text message scam

12/8/2020

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​The IRS and its Security Summit partners are warning people to be aware of a new text message scam. The thief’s goal is to trick people into revealing bank account information under the guise of receiving the $1,200 Economic Impact Payment.

Here’s how this scam works
People get a text message saying they have “received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment… Continue here to accept this payment …" The text includes a link to a phishing web address.
This fake link appears to come from a state agency or relief organization. It takes people to a fake website that looks like the IRS.gov Get My Payment website. If people visit the fake website and enter their personal and financial account information, the scammers collect it.

Here’s what people should do if they receive this message 
Anyone who receives this scam text should take a screenshot and include the screenshot in an email to phishing@irs.gov with the following information:
  • Date/time/time zone that they received the text message
  • The phone number that received the text message
The IRS doesn’t send unsolicited texts or emails. The agency will never demand immediate payment using a gift card, prepaid debit card or wire transfer or threaten to have a taxpayer arrested.
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Employers can grant paid leave for COVID-19

5/28/2020

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Under the Families First Coronavirus Response Act, employers can grant paid leave for an employee to take care of their health needs related to COVID -19 or to care for their family members. This relief helps ensure employees are not forced to choose between being paid or staying home to care for themselves, a child or other family member.
In addition to the relief for employees, businesses can claim two new refundable payroll tax credits for granting paid leave to their employees. The paid sick leave credit and paid family leave credit are available for eligible employers who pay qualified sick leave wages and/or qualified family leave wages from April 1, 2020 through December 31, 2020, and who have fewer than 500 employees. 
The paid sick leave credit and the paid family leave credit will immediately and fully reimburse employers for the cost of providing COVID-19 related leave to their employees.
Here is what employees need to know about paid leave under the CARES Act.
Paid sick leave for workers
An employer can allow  a full-time employee up to 80 hours of paid sick leave.  A part-time employee may be allowed paid sick leave for the number of hours the employee works over a two-week period, if the employee is unable to work or telework because they are:
  • Subject to federal, state, or local quarantine or isolation orders related to COVID-19
  • Advised by a health care provider to self-quarantine due to COVID-19
  • Experiencing COVID-19 symptoms and are seeking a medical diagnosis
  • Caring for a person subject to federal, state, or local quarantine orders related to COVID-19 or has been advised to self-quarantine
  • Caring for a child whose school or place of care is closed or care provider is unavailable for reasons related to COVID-19
  • Experiencing any other substantially similar condition
Employers pay the benefits at 100% of employee’s regular pay up to $511 per day and $5,110 in total for the care of employee’s own health.

For the care of an employee’s family members, employers pay benefits at two-thirds of the employee’s regular pay up to $200 per day and $2,000 total.
Paid family leave to care for child
An employer can give up to 10 weeks of paid family leave at two-thirds their regular pay for up to $200 per day and $10,000 total if the employee is unable to work or telework because they’re caring for a child whose:
  • School or place of care is closed due to COVID-19
  • Childcare provider is unavailable due to COVID-19
With two weeks of paid sick leave and 10 weeks of paid family leave combined, an employee could receive up to a total of 12 weeks up to $12,000 of paid leave to care for a child.
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Taxpayers have the right to challenge the IRS’s position on their taxes

3/11/2020

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When the IRS makes a determination about someone’s tax return, that person can challenge the IRS’s decision. In fact, the taxpayer has a right to do so. This is one of ten rights laid out in the Taxpayer Bill of Rights. They also have the right for that challenge to be heard by the agency. 
This means taxpayers have the right to:
  • Object to formal IRS actions or proposed actions and provide additional documentation in their response.
  • Expect the IRS to consider their timely objections and documentation promptly and fairly.
  • Receive a response if the IRS does not agree with them.
When a taxpayer does not agree with the IRS, they should not only know their rights, but also what to expect. Here are some situations a taxpayer might experience:
  • A math or clerical error on their tax return. If the IRS sends a notice about a math or clerical error on their tax return, taxpayers have 60 days to reply if they disagree. Taxpayers should provide copies of any records to help correct the error. They can also call the number on the notice or bill for help.
    • If the IRS agrees. They will make the necessary adjustments to the account and send a corrected notice.
    • If the IRS disagrees. The agency will send a notice proposing a tax adjustment. This is called a statutory notice of deficiency. It gives the taxpayer the right to challenge it in the United States Tax Court before paying it. They have 90 days from the date of the notice to respond. They have 150 days if the notice is addressed outside the U.S. The taxpayer information webpage provides more information about the United States Tax Court.
  • Audit. If a taxpayer submits documentation or objects during a return examination or audit, and the IRS disagrees with them, the agency will issue a statutory notice of deficiency. This notice will explain why the IRS is increasing their tax. The taxpayer may then petition the U.S. Tax Court before paying the tax.
  • Levy or Lien. If the IRS notifies a taxpayer of plans to levy their bank account or other property, the taxpayer can generally request a hearing before the Office of Appeals. In most cases, the taxpayer can also appeal the proposed or actual filing of a notice of federal tax lien.


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2019 Standard Deduction rates

2/2/2020

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​The standard deduction reduces your taxable income. In 2019 the standard deduction is $12,200 for single filers and married filers filing separately, $24,400 for married filers filing jointly and $18,350 for heads of household.
Please view my IRS website at:    https://velie_consulting_services_llc.ptinpro.com/
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What Is the SECURE Act and How Could It Affect Your Retirement?

2/1/2020

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The Setting Every Community Up for Retirement Enhancement Act of 2019, better known as the SECURE Act, which originally passed the House in July, was approved by the Senate on Dec.19, 2019, as part of an end-of-year appropriations act and accompanying tax measure, and signed into law on Dec. 20 by President Donald Trump. The far-reaching bill includes significant provisions aimed at increasing access to tax-advantaged accounts and preventing older Americans from outliving their assets.


KEY TAKEAWAYS​The SECURE Act became law on Dec. 20, 2019.
  • The SECURE Act will make it easier for small business owners to set up “safe harbor” retirement plans that are less expensive and easier to administer.
  • Many part-time workers will be eligible to participate in an employer retirement plan.
  • The Act pushes back the age at which retirement plan participants need to take required minimum distributions (RMDs), from 70½ to 72, and allows traditional IRA owners to keep making contributions indefinitely.
  • The Act mandates that most non-spouses inheriting IRAs take distributions that end up emptying the account in 10 years.
  • The Act allows 401(k) plans to offer annuities.
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Here are reasons for people to file a 2019 tax return

1/13/2020

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While many people are required to file a tax return, it’s a good idea for everyone to determine if they should file. Some people with low income are not required to file, but will need to do so if they can get a tax refund.

Here are five tips for taxpayers who are deciding whether to file a tax return:

Find out the general reasons to file
In most cases, income, filing status and age determine if a taxpayer must file a tax return. Other rules may apply if the taxpayer is self-employed or can be claimed as a dependent of someone else. There are other reasons when a taxpayer must file. The Interactive Tax Assistant can help someone determine if they the need to file a return.
 
Look at tax withheld or paid
Here are a few questions for taxpayers to ask themselves:
  • Did the taxpayer’s employer withhold federal income tax from their pay?
  • Did the taxpayer make estimated tax payments?
  • Did they overpay last year and have it applied to this year’s tax?
If the answer is “yes” to any of these questions, they could be due a refund. They must file a tax return to get their money.
Look into whether they can claim the earned income tax credit
A working taxpayer who earned less than $55,592 last year could receive the EITC as a tax refund. They must qualify and may do so with or without a qualifying child. They can check eligibility by using the 2019 EITC Assistant on IRS.gov. Taxpayers need to file a tax return to claim the EITC.
 
Child tax credit or credit for other dependents
Taxpayers can claim the child tax credit if they have a qualifying child under the age of 17 and meet other qualifications. Other taxpayers may be eligible for the credit for other dependents. This includes people who have:
  • Dependent children who are age 17 or older at the end of 2019
  • Parents or other qualifying individuals they support
The Child-Related Tax Benefits tool can help people determine if they qualify for these two credits.
Education credits
There are two higher education credits that reduce the amount of tax someone owes on their tax return. One is the American opportunity tax credit and the other is the lifetime learning credit. The taxpayer, their spouse or their dependent must have been a student enrolled at least half time for one academic period to qualify. The taxpayer may qualify for one of these credits even if they don’t owe any taxes. Form 8863, Education Credits is used to claim the credit when filing the tax return.
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