Monday, April 19, 2021


Make a note of the amount of the third stimulus payment you received (the maximum $1,400 per taxpayer and dependent), or if you received no payment, and keep any IRS notice you get that identifies the payment.  Do the same for any subsequent payments that may be enacted.  Give this information to your tax preparer with your 2021 tax “stuff” next year.

These payments are NOT taxable income.  But they will need to be “reconciled” when preparing your 2021 tax return.  If you didn’t get the full amount to which you were entitled you can claim the shortage as a refundable credit on the 2021 return.


Tuesday, April 13, 2021


The filing and paying deadline for the 2020 Form 1040 (and 1040-SR) has been extended to May 17th, but as of this writing the 1st Quarter 2021 federal estimated tax payment is still due April 15th.

But, according to the IRS (see here) -

To the extent an overpayment of the 2020 tax exists as of April 15, 2021 (because payments made on or before April 15, 2021, exceed the 2020 tax liability), and the taxpayer makes a valid election to apply the overpayment to 2021 estimated tax, the overpayment would be applied as of April 15, 2021, whether the 2020 return is filed on April 15, May 17, or October 15, 2021.

So any amount of your overpayment you apply to 2021 estimated tax on your 2020 tax return, regardless of when the return is filed, is treated as having been received by the IRS by April 15, 2021 – assuming that all the tax payments reported on the tax return were made before April 15, 2021. 

So, if you file an extension with a payment of anticipated tax due and when you finally prepare your return you are entitled to a refund this may not apply.  But if all the tax payments reported on your return were made via withholding and/or timely paid estimated taxes you are OK.



Saturday, April 10, 2021


If you received an advance premium tax credit (APTC) in 2020 to help pay for your monthly health insurance premiums for coverage purchased through the Obamacare Health Insurance Marketplace and the advance premium you received is more than you are entitled to based on your actual 2020 household income the IRS now tells us in IR-2021-84

. . . taxpayers with excess APTC for 2020 are not required to file Form 8962, Premium Tax Credit, or report an excess advance Premium Tax Credit repayment on their 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, when they file.”

So not only do you not have to repay the excess credit, but you do not have to file Form 8962 with your 2020 tax return.

Of course, if you are entitled to more of a credit than you got during the year you should file Form 8962 to claim the additional amount. 


Tuesday, March 30, 2021


The IRS has clarified the recent extension of the filing, and paying, deadline from April 15 to May 17.

In “IRS extends additional tax deadlines for individuals to May 17”, which explains IRS Notice 2021-21, we are told -

In extending the deadline to file Form 1040 series returns to May 17, the IRS is automatically postponing to the same date the time for individuals to make 2020 contributions to their individual retirement arrangements (IRAs and Roth IRAs), health savings accounts (HSAs), Archer Medical Savings Accounts (Archer MSAs), and Coverdell education savings accounts (Coverdell ESAs).


Saturday, March 27, 2021


IRS Announcement 2021-7 (1) tells us that the cost of personal protective equipment (PPE) for the primary purpose of preventing the spread of COVID-19 is considered amounts paid for medical care under Internal Revenue Code Sec. 213(d). 

So, the purchase of personal protective equipment such as face-masks, hand sanitizer and sanitizing wipes for COVID-19 protection are deductible as medical expenses on Schedule A.  

And, for NJ residents, because these costs are a deductible expense for Schedule A they are also deductible as a medical expense on the NJ-1040. 


Saturday, March 20, 2021


NJ.COM reports “N.J. extends tax deadline to May 17, matching federal change” –

But there will not be an extension for first quarter 2021 individual estimated tax payments, the statement said. Those will still be due on April 15.”

I have not seen anything on the NJ Division of Taxation webpage yet.

As For New York, according to N-21-1

The Commissioner of the New York State Department of Taxation and Finance has extended the due date for personal income tax returns, and related payments, for the 2020 tax year from April 15, 2021 to May 17, 2021.” 

But, as with the IRS – 

“This relief does not apply to estimated tax payments for the 2021 tax year that are due on April 15, 2021. These payments are still due on April 15, 2021.” 

And from the Pennsylvania Department of Revenue

The Department of Revenue today announced the deadline for taxpayers to file their 2020 Pennsylvania personal income tax returns and make final 2020 income tax payments is extended to May 17, 2021.”

And -  

Those who make estimated income tax payments should continue to do so on the same filing schedule that they would normally follow. This includes taxpayers with estimated tax payments due on April 15, 2021.” 

Not from New Jersey, New York or Pennsylvania.  You should check the website of your state tax agency to see if it has extended the filing and paying deadline.


Friday, March 19, 2021


It appears, according to IRS Commissioner Chuck Rettig, that the IRS will automatically process refunds for taxpayers who have already filed their 2020 income tax returns and claimed the full amount of unemployment benefits received as taxable income.  

As I explained in a previous post (click here) - “The American Rescue Plan . . . exempts from federal taxable income up to $10,200 in unemployment benefits received in 2020 if your “household” modified AGI is less than $150,000.” 
Do not file an amended return at this time,” Rettig told a congressional panel on Thursday. “We believe that we will be able to handle this on our own. We believe that we will be able to automatically issue refunds associated with the $10,200.”
Rettig explained that the IRS would soon officially release details for taxpayers about how to proceed.