WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’?

 

* It’s worse than we were told.  Russ Fox explains “That 6 Million Return Backlog? Oops, We Mad a Math Error: It’s Really 24 Million” at TAXABLE TALK.

He also tells us why calling the IRS is not a good idea.  Even in “normal times” I never call the IRS.  1. I want a written record of all dealings with the Service and 2. I have been lied to by the IRS person to whom I spoke when I called decades ago.

And he has some ideas on what the IRS should do.

BTW – Russ, my hair has been prematurely grey for years.

* Some good news from Kay Bell at DON’T MESS WITH TAXES - “IRS suspends issuance of 14 more taxpayer notices” - 

“After pressure from members of Congress, the National Taxpayer Advocate, and the Tax Professionals United for Taxpayer Relief Coalition, a group of organizations formed the to help make this third Covid-affected tax season a bit smoother, the Internal Revenue Service has decided to suspend sending of most taxpayer notices.”

Kay provides a detailed chart of the suspended notices.

* Michael Cohn tells us the “IRS posts special tax season info page for tax pros and taxpayers” at ACCOUNTING TODAY -

“The Internal Revenue Service has set up a dedicated page on its website to provide the latest information about the current tax season and the agency’s efforts to deal with the backlog of millions of previously filed returns.”

Click here to go to the new page.

* Back to Kay Bell, she reminds us “All unemployment benefits are again fully taxable”.

FYI – several states, erroneously, no longer actually mail out the Form 1099-G that reports unemployment income and withholding – you have to go online to the website of the state unemployment department to get it.  That is the case in New Jersey. 

And in most cases even if you had some federal withholding on unemployment benefits it is usually not enough to cover the actual tax cost.

* Once again Kay makes the trifecta with a reminder – “IRS sending 1099-INTs to taxpayers who got interest added to tax refunds”.

Thankfully the IRS has been paying interest on the late refunds of the past two years - which is, of course, taxable income.  The good thing about IRS interest is that it is substantially higher than what any bank or brokerage pays.

* Here is some good advice from Maryann Vognild, CFP at THE STREET – “Dreading Income Tax Season? Try Income Tax Planning Instead” –

“Do you feel Uncle Sam looming over you, waiting to cause devastating damage as soon as tax season hits? Well, there are ways to plan for taxes that can reduce your overall, lifetime tax burden... and to get Uncle Sam to stop being so frightening.”

I have been saying for decades – you don’t have to wait for Congress to pass a tax cut bill. You can enact your own personal tax cut with careful tax planning.

TTFN