781-337-8788 [email protected]

Stimulus Round 3: Unemployment Questions Answered

The passage of the most recent stimulus package —The American Rescue Plan— is good news for most taxpayers. However, particularly for those who received unemployment benefits in the last year, implentation of the bill after the start of tax season is creating some confusion.

Shortly after the president signed the Act, IRS issued a statement indicating that a software update will be installed to address any potential issues with 2020 tax returns. In the meantime, the main takeaways with regard to unemployment are:

  • The American Rescue Plan includes a retroactive benefit that will make the first $10,200 of unemployment income from 2020 non-taxable for individuals who earned less than $150,000.
  • IRS is urging taxpayers who are eligible for this benefit to delay filing pending the software industry update that will account for the adjustment.
  • Taxpayers who have already filed their 2020 returns should also wait to see if an amended return will be necessary.

For our clients who meet the eligibility requirements of the unemployment provision:

  • If we have already processed your taxes and it is determined that an amended return is necessary, the update will be filed after April 15th, per IRS guidance.
  • If we have your information and/or your documents are in progress, we will be holding your return pending the Federal and State software updates before filing. 
  • ​If you have any questions about the unemployment provision in the most recent stimulus, IRS has posted more detailed information here.

How to Get Your Tax Documents to (and From) Us Safely!

We continue to encourage everyone to use the client portal for the safest transfer of documents, but are happy to be able to provide alternatives to accommodate what works best for you!   

Sending Us Hard Copies of Your Documents?

Priority Mail is best! The U.S. Post Office offers free tracking with Priority Mail, and has the best rates for anything under two pounds. We do NOT recommend sending via FedEx. Our FedEx delivery person often leaves packages in the main building lobby rather than bringing them to our office. 

Reminder: We do not need your medical receipts, only the total you spent if you think you have enough to deduct.

Dropping Off?

We have a secure lockbox set up just inside our office door, along with hand sanitizer, pens, and large white envelopes if needed. Please do not put anything through the mail slot, as we cannot guarantee the safety of your information unless it is in our locked dropbox.

Make sure your documents are sealed in an envelope with your name on the outside before placing in the locked dropbox. The box is emptied and the area sanitized every half hour!

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Your Returns are Ready for You to Sign. Now What?

Once we have completed your returns, we will give you a call, and you can choose to have us send them to you via Priority Mail, or you can come to our office to retrieve them.

If you choose to come to our office to pickup your tax return:

  • Please call us from the parking lot when you arrive.
  • We will place your documents on one of two desks (A or B) just inside our office.
  • Once you know which table your documents are on, you may enter the office to retrieve them.
  • You may opt to take your return back to your car to look over and sign before leaving. However, we recommend that you take your return home to review before sending the signed copy back to us for filing. 

Paperless Bill Payment

Did you know you can pay your Business Bookkeeping Services invoice online? We have a secure payment gateway which can be accessed from the homepage of our website for your convenience. You can pay your invoice by credit card through this link instead of writing a check! Easy. 

Tax Season 2021: Office Safety Protocol

Another strange tax season is upon us, and with a keen focus on keeping our staff and clients safe and healthy so we can continue working, we have put safety measures in place for folks who need to visit our office to drop off their documents. We thank you in advance for your understanding and patience while we all await a time when we can see each other face-to face.

In the meantime, if you must come to our office, kindly follow the protocol below:

  • Please put on a mask before you come in to our building.
  • When you enter our office space you will immediately see a table with a box, some pens, 9 x 12 envelopes, and instructions.
  • If you have questions, please put them in writing and include them with your documents. Staff will not be able to answer any questions at drop off.
  • If you have brought your documents in a folder, please put them in an envelope, seal it, write your name on the outside and place it in the box.
  • If your documents are already in an envelope, just make sure your name is on the outside and place it in the box.
  • The drop box will be emptied, and the area sanitized, every half hour.
  • Staff will not be available to assist you at drop off, so please do not go past the table or enter any of the offices.
  • Kindly be patient. Once we have your information, you can rest assured we will contact you to address any issues, or to arrange for you to sign and pick up as soon as we can.

We appreciate that it can be frustrating if you just have a quick question you need answered, but we ‘ll be much better equipped to address your specific question after we have reviewed all of your information for this year. For now, avoiding any in-person contact between clients and staff is the best way we can provide you with the service you deserve by keeping everyone safe so we can stay open. 

Continuing IRS Delays: What to Expect this Tax Season

As recently as January 13th, 2021, IRS updated the  IRS Operations During COVID-19 page  with details about ongoing service delays.
Specifically, the page opens with:

“We’re open and processing mail, tax returns, payments, refunds and correspondence. However, COVID-19 continues to cause delays in some of our services. Our service delays include:

• Live phone support
• Processing tax returns filed on paper
• Answering mail from taxpayers
• Reviewing tax returns, even for returns filed electronically”

In other words, pretty much everything is delayed, and trying to get answers will continue to be difficult for the foreseeable future, particularly as processing this year’s returns gets underway. 

With many IRS employees continuing to work remotely, the mountains of paper mail delivered to their regular locations have continued to pile up. the few employees allowed in those buildings are doing their best to address as much of the backlog as they can, but it’s slow going without the manpower on site. as It’s kind of like the sports stadiums we are seeing designed to hold tens f thousands of people, with only a few hundred in the stands.

There are other helpful resources available through the IRS website, however, including a page dedicated to stimulus payments, and, when the time comes, the “Where’s my refund?” link.

We’ll be keeping up to date with IRS communications as they are released and sharing relevant information we find for you this tax season.

Reminder: Check Your Withholding!

With the fallout from COVID-19 affecting every taxpayer this year—whether it’s a change in employment status or pay fluctuations amid the pandemic—we wanted to take a minute to once again stress the importance of checking your pay stubs on a regular basis to ensure that your withholding is as you want it to be.

Many of our clients experienced sticker shock when the Tax cuts & Jobs Act of 2017 skewed the tax tables, and their withholding elections left them unexpectedly owing money.

We know that most people receive their payroll check through direct deposit, and paystubs are usually issued by e-mail these days. As a result, most pay stubs go unchecked, and unfortunately by the time the withholding deficit is discovered it’s already the following year—and too late to do anything about it.

To avoid this, we recommend making a habit of checking your pay stubs every month to verify the withholdings are per your instructions—even if you are not not paid via direct deposit.

And if you need to make adjustments, you can contact your HR benefits people to fill out a new w-4.

See our earlier post about the withholding here.