Tag Archives: 2021 tax season

Here’s what taxpayers need to know about reporting tip income on their tax return

Generally, income received from any source, including tips, is taxable. Here’s some information to help taxpayers report tip income.

All tips that taxpayers receive are income and subject to federal income tax. Taxpayers must include all tips they receive in their gross income. This includes:

  • Tips directly from customers.
  • Tips added using credit cards.
  • Tips from a tip-splitting arrangement with other employees.
Continue reading

Filing season reminder: Military members and their families may qualify for special tax benefits

With the filing deadline around the corner, the IRS reminders members of the military that they may qualify for special tax benefits. For example, they don’t have to pay taxes on some types of income. Special rules may lower the tax they owe or allow them more time to file and pay their federal taxes.

Continue reading

Taxpayers should beware of ghost preparers

As people begin to file their 2020 tax returns, taxpayers are reminded to avoid unethical ghost tax return preparers.

A ghost preparer is someone who doesn’t sign tax returns they prepare. Unscrupulous ghost preparers often print the return and have the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost will prepare but refuse to digitally sign as the paid preparer.

Continue reading

IRS pushes start of 2021 tax season as online filing opens to Feb 12

The Internal Revenue Service announced that the nation’s tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

Because of the pandemic and stimulus payments, the Internal Revenue Service will not start accepting federal tax returns until February 12, 2021.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.

Continue reading