Monday, May 17, 2021

e-News for Small Business Issue 2021-07

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e-News for Small Business May 17, 2021

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Issue Number: 2021-07

Inside This Issue

  1. A Closer Look: IRS thanks taxpayers for filing and paying taxes, urges those who don't normally file not to miss possible refunds
  2. American Rescue Plan: Tax benefits for 2020 and beyond
  3. Information for gig economy workers and for unemployment benefits recipients
  4. Ninth batch of EIP brings total payments to nearly 165 million
  5. Dyed diesel fuel penalty relief due to disruptions of the fuel supply chain
  6. Automatic extensions to file available to some this filing season
  7. Other news for businesses
  8. New IRS app predicts when government contracts will be signed

1.  A Closer Look: IRS thanks taxpayers for filing and paying taxes, urges those who don't normally file not to miss possible refunds


The two latest executive columns in "A Closer Look" feature important filing season information for taxpayers.

IRS thanks taxpayers for performing their civic duty each year

The latest column features Chuck Rettig, IRS Commissioner, thanking everyone who filed and paid their taxes and highlighting the vital role taxpayers play in the nation's tax system simply by filing their tax return.

Filing a 2020 tax return, even for those who don't have to, could put money in their pocket

This recent column features David Alito, Deputy Commissioner, Wage and Investment Division, urging people to file a 2020 tax return, even if they don't have to. If people qualify for certain tax credits or already paid some federal income tax, the IRS might owe them a refund that they can only get by filing a return.

A Closer Look covers a variety of timely issues of interest to taxpayers, small businesses and the tax community.

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2.  American Rescue Plan: Tax benefits for 2020 and beyond


The IRS provided an overview of some of the key tax provisions in the American Rescue Plan Act.

Retroactive changes for 2020 include limits on taxability of unemployment compensation and suspension of repayment of excess Advance Premium Tax Credit. Last week the IRS began issuing refunds to eligible taxpayers who paid taxes on 2020 unemployment compensation that was excluded from income in the American Rescue Plan Act.

Additionally, advance Child Tax Credit payments will be issued from July through December 2021, up to half the credit will be advanced to eligible families. The advance payments will be estimated from their 2020 return, or if not available, their 2019 return. For that reason, the IRS urges families to file their 2020 return as soon as possible.

Looking ahead to the 2021 tax season there are many benefits, including those related to people with children and expansions to the Earned Income Tax Credit for people claiming it with or without children.

The IRS urges community groups, non-profits, associations, education groups and anyone else with connections to people with children to share critical information in the overview about the advance Child Tax Credit as well as other important benefits.

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3.  Information for gig economy workers and for unemployment benefits recipients


The IRS reminds workers in the gig economy and those who claimed unemployment compensation in 2020 of their options and where to find information on meeting their tax obligations.

The news release covers information for gig economy workers, including resources for withholding, estimated tax requirements and recordkeeping. It also provides information for those who received unemployment benefits, including the amount of unemployment benefits excluded from income under the American Rescue Plan Act.

The IRS will automatically calculate and send any refunds due to changes in the taxability of unemployment compensation. Taxpayers shouldn't file an amended return, unless the changes qualify the taxpayer for a credit that wasn't claimed at all.

If a taxpayer didn't report income from gig work or unemployment compensation, they can file an amended return. There are options for those who owe but can't pay in full.

The IRS Tax Tip, Tips for taxpayers who work in the gig economy, has more useful information.

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4.  Ninth batch of EIP brings total payments to nearly 165 million


The IRS, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing nearly 1 million payments in the ninth batch of Economic Impact Payments from the American Rescue Plan.

The announcement brings the total disbursed so far to nearly 165 million payments, with a total value of approximately $388 billion, since these payments began rolling out.

The announcement also contains a special reminder of action to take for people who don't normally file a return.

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5.  Dyed diesel fuel penalty relief due to disruptions of the fuel supply chain


The IRS, in response to disruptions of the fuel supply chain, will not impose a penalty when dyed diesel fuel is sold for use or used on the highway in the states of Alabama, Delaware, Georgia, Florida, Louisiana, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and the District of Columbia.

This relief is retroactive to May 7, 2021, and will remain in effect through May 21, 2021. The IRS is closely monitoring the situation and will provide additional relief as needed.

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6.  Automatic extensions to file available to some this filing season


Anyone can request an automatic tax-filing extension, but some people get extra time without asking.

The IRS estimates that more than 16 million taxpayers will get an automatic extension this filing season, either by filing a form or making an electronic tax payment. But some taxpayers, including disaster victims, those serving in a combat zone, and Americans living abroad automatically get more time, even if they don't ask for it.

Taxpayers who don't qualify for any of these three special situations can still get more time to file by submitting a request for an automatic extension until October 15, 2021. This is an extension of time to file, not to pay taxes.

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7.  Other news for businesses


Two IRS news releases offer information on the following:

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8.  New IRS app predicts when government contracts will be signed


The IRS's Office of the Chief Procurement Officer announced the successful development of their web app, Projected Contract Award Date. The interactive forecast dashboard statistically predicts when contracts will be signed.

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