Archives for July 2021

As digitization continues to be more common than ever, IRS launched a new feature for the IRS Online Account to improve and facilitate better services for taxpayers.

How the IRS Processed Power Of Attorney Forms In The Past

Until recently taxpayers could not connect online with their tax professional for approving the power of attorney or tax information authorization. The taxpayers and the tax professionals had to physically sign Form 2848 – Power of attorney and/or Form 8821 – Tax information authorization. Then the tax professionals had to submit the form(s) to the IRS either through their e-Services account or fax it to the IRS to get the requested information.

We Can Now Submit The IRS Power Of Attorney Form Online

This new IRS feature reduces the time in which your tax professional can get access to the requested information from weeks to a couple of days.

You, the individual taxpayer will now be able to connect with your tax professional by opening an online account on the IRS website. You can click here to access the IRS website and start creating your IRS Online Account. Your identity as a taxpayer will be verified during the login process and would then enable you to see in your online account the authorizations requested by your tax professional. You can verify and approve these authorization requests by simply checking a box as your signature for approval.

This IRS online account would not only let you access your tax records, but you will also be able to make a payment, check the status of your economic stimulus payments and see key information from your recent tax return.

There Are Instances When You Cannot Submit Online the IRS Power Of Attorney Form

Unfortunately, for those of you who cannot validate their identities for opening an online account, you will not be able to take advantage of this newly introduced feature.

The same applies for businesses or other entities. This online process is only available for individual taxpayers.

If you need help with your taxes, give us a call or schedule an appointment.

This material is for informational purposes only. It does not constitute tax, legal or accounting advice.

Child Tax Credit Changes

We all are still seeing the looming effects of Covid19 pandemic on our economy. Some help is on the way through the avenue of the advance child tax credit payments authorized by the American Rescue Plan Act. The Act made some important changes to the child tax credit:

• it increased the maximum credit allowed from $2000 to $3,600 for children ages 5 and under at the end of 2021 and $3,000 for children ages 6 through 17 at the end of 2021.

• the credit will now be fully refundable, which means, you can get the amount of credit as a refund even if you do not owe any income taxes.

Child Tax Credit Advance Payments Starting July 15th

One other change that came about is that now you don’t have to wait until 2021 tax filing to claim some of the child tax credit available to you. Half of it is now available in form of advance monthly payments. The IRS will start making these payments on July 15^th 2021.

But there are some requirements to qualify for these advances. To see if you are eligible, please click here.

Unenrollment

You do not have to do anything to enroll in this monthly payment, however if do not wish to receive the advance child tax credit payments, you need to opt out. Some of the reasons for wanting to opt out of the advance child tax credit payments, can be:

• you expect to owe taxes on your 2021 tax return,
• you want to save the credit amount for some considerable expenses you foresee for next year,
• maybe due to a divorce, you expect to have a lower number of dependents.

The unenrolling is a one time action. You do not have to unenroll for each month, neither can you reenroll back to receive the advance payments. It is an individual action, hence you and your spouse, if filing jointly, both have an independent right to decide and enroll or unenroll individually. If your spouse unenrolls and you do not, you will get half of the joint payment you were supposed to receive with your spouse.

You can find more information about the advance child tax credit payments on the IRS website.

If you need help with your taxes, give us a call or schedule an appointment.

This material is for informational purposes only. It does not constitute tax, legal or accounting advice.