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| Issue Number: 2021-01Inside This Issue
1. February 1 deadline: Employers to issue and file wage statements; Businesses to provide Forms 1099-MISC and 1099-NEC to recipients 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. The IRS reminds businesses and other payors that the revised Form 1099-MISC, Miscellaneous Income, and the new Form 1099-NEC, Nonemployee Compensation, must be furnished to most recipients by February 1, 2021. 2. Take advantage of the extended Employee Retention Credit The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll. 3. Employers can withhold, make payments of deferred Social Security taxes from 2020 Read about IRS Notice 2021-11, which addresses how employers who elected to defer certain employees' taxes can withhold and pay the deferred taxes throughout 2021 instead of just the first four months of the year. 4. Eligible Paycheck Protection Program expenses now deductible The Treasury Department and the IRS issued guidance allowing deductions for the payments of eligible expenses when such payments would result (or be expected to result) in the forgiveness of a loan (covered loan) under the Paycheck Protection Program (PPP). 5. IRS issues standard mileage rates for 2021 The IRS issued the 2021 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Read about the details, changes to deductions and the option to use actual costs. 2021 tax filing season begins February 12; IRS outlines steps to speed refunds during pandemic The IRS 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. IRS Free File available; claim Recovery Rebate Credit and other tax credits IRS Free File – online tax preparation products available at no charge – has launched, giving taxpayers an early start to preparing returns and claiming credits like the Earned Income Tax credit and the Recovery Rebate Credit. IRS ready for the upcoming tax season; last-minute changes to tax laws included in IRS forms and instructions The IRS assures taxpayers and tax professionals that updates to key federal tax forms and instructions are complete and will be available when Americans begin filing their tax returns. For more information read the news release about the upcoming tax season and changes to tax law included in IRS forms and instructions. 7. IRS publishes Taxpayer First Act Report to Congress After more than a year of research and feedback, the IRS submitted the Taxpayer First Act Report to Congress to Congress this week and released it to the public. The Taxpayer First Act, signed into law in July 2019, was designed to improve service to taxpayers and tax professionals and to ensure the IRS continues to enforce the tax law in a fair and impartial manner. The report includes recommendations from the tax professional community, and the IRS will continue conversations with key stakeholders and congressional committees to secure funding and begin to work toward implementation of these recommendations over the next several years. The success of the Taxpayer Experience Strategy, Training Strategy and Organizational Redesign will make service improvements possible for taxpayers, tax professionals, small businesses, payroll tax professionals and many others. 8. A Closer Look: IRS efforts to help taxpayers and the nation in 2020; Maximizing the Earned Income Tax Credit; Improving taxpayer interactions with the IRS Read the latest posts from the IRS executive column, "A Closer Look." IRS efforts to help taxpayers and the nation in 2020 This column features IRS Commissioner Chuck Rettig, discussing the IRS Progress Update and how the agency helped taxpayers and the nation during 2020. "COVID-19 presented some of the greatest challenges to our country and the IRS in its history, both in terms of being able to carry out our mission and in protecting the health and safety of taxpayers and our own workforce." Read the full post here in English and here in Spanish. Maximizing the Earned Income Tax Credit This column features Deputy Commissioner for Services and Enforcement Sunita Lough, discussing the Earned Income Tax Credit (EITC) program and how the IRS works to maintain its integrity. Read the full post here in English and here in Spanish. Improving taxpayer interactions with the IRS This column features Jim Clifford, the Taxpayer First Act program director, discussing the steps IRS took to provide information to a diverse country. In serving the community in the language they prefer. Read the full post here in English and here in Spanish. "A Closer Look" covers a variety of timely issues of interest to taxpayers and the tax community. Check for prior posts and new updates and share the two new "A Closer Look" e-Posters (available in English and Spanish).
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