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FY 2021 Tax Forms

IRS Forms, Instructions, and Publications


Form 1040

Form W2

Form W4

Form W9


Other Forms and Worksheets

  Farm Worksheet

  Itemized Worksheet

  Rental Worksheet

  Business or Profession Worksheet

  Clergy Worksheet

  I-9 Employment Eligibility Form  

     2021 Tax Updates


CHANGES FOR 2021
 
2021 has been another difficult year for many of us. We again hope this letter finds you all safe and healthy. We all hope for a much improved 2022.
 
Some of the tax changes that were passed in 2020 are no longer in effect for 2021. There are some of the 2020 changes that you do need to be aware of for 2021 as well as some new programs.

The programs and changes that may effect  2021 personal income taxes include, the Third Economic Impact Payments, the Expanded  Advanced Child Tax Credit, some changes for IRAs and retirement plans, the return of the repayment of Advanced Premium Tax Credit, a change in the exclusion of unemployment compensation and an adjustment on the charitable contribution deduction for 2021.

The changes that impact business taxes include, increased section 179 expense limits, and deduction of expenses paid with a PPP loan that was forgiven.

Personal Income Tax Changes

Economic Impact Payments; also know as Stimulus Payments continued in 2021. A third Economic Impact Payment was made beginning in March of 2021. This third payment is the only payment that was for 2021.The payment was generally $1,400 for each individual and an additional $1,400 for qualifying children. Your preparer will need to know the amount of the third Economic Impact Payment, if any, that you received for 2021. The IRS sent Notice 1444-C to anyone that got the Third Economic Impact Payment that listed the amount of the payment.

Child Tax Credit

The Child Tax Credit was expanded for 2021. The credit for 2021 is $3,000 per eligible child or $3,600 for child under age 6. Also 50% of the credit could be paid in advance (monthly). If you received Advanced Child Tax credit you will receive Letter 6419 from the IRS in January of 2022. Your preparer will need that document to correctly calculate your 2021 Child tax Credit.

Retirement Plan and Unemployment Compensation Exclusion Changes

If you took a Corona-Virus related distribution in 2020 and elected to include the distribution in income over 3 years the second installment will be included in 2021 income.

The maximum age limit (72) for making contributions to an IRA was repealed. You still are required to have earned Income to make a IRA contribution.

Required Minimum Distributions  from retirement plans are back for 2021.
The Exclusion from taxable  income for up to $10,000 of unemployment is not available for 2021.

Charitable Contributions; For 2021 you can take a deduction for up to $300 for single and $600 for Married Filing Joint of charitable contributions without itemizing deductions.

BUSINESS INCOME TAXES

Section 179 Changes
The limits for electing to expense depreciable equipment in the year placed in service under Section 179 have been increased for 2021.The maximum amount for 2021 is $1,050,000. The limit is reduced if the total cost of equipment put into service for the year exceeds $2,620,000.

PPP Loan Expenses
The tax treatment of expenses paid with a PPP loan that was  forgiven was clarified in 2020. The law stated that expenses paid with a PPP loan that was forgiven could still be deducted as business expenses. The proceeds of a PPP loan that was  forgiven are not included in gross income. These rules apply to a PPP loan that was forgiven in 2021.

2021 Standard Mileage Rates
The standard Mile rates for 2021 are 56 cents per mile for business use, 16 cents per mile for medical and 14 cents per mile for charitable use.

AFFORDABLE CARE ACT / PREMIUM TAX CREDIT

If you purchased insurance from the marketplace in 2021 you will still receive a Form 1095A. If you received an Advanced Premium Tax Credit that is also on the Form 1095A. That form is required to complete your return. In 2021 if you received a higher amount of Advanced Premium Tax credit than you were eligible for based on your 2021 income than the repayment rules are back in effect.

What to Bring to Bring to Your Tax Appointment
    Federal, state, and local estimated payment vouchers.
    W-2s, 1099s, SSA statement or business records if you are self-employed.
    Social security cards for you, your spouse, and dependents.
    Date of birth for taxpayer, spouse, and all dependents.