Update as of 3/16/2021
- The American Rescue Plan, enacted March 11, 2021 excludes up to $10,200 of unemployment compensation from taxpayers with less than $150,000 of income reported for 2020.
- If we are currently preparing your return, we will exclude this amount of unemployment compensation on your tax return.
- If your return has been filed prior to March 16, an Amended Tax Return is necessary to take advantage of this benefit. Amended returns are currently taking 3 to 18 months for the IRS process. We will be contacting our clients who may benefit from amendment following April 15 to advise if the savings justifies the cost of the return.
IRS Information & IRS Processing Delays
Internal Revenue Service operations continue at reduced capacity due to the COVID-19 pandemic. Return processing has slowed, checks for taxes owed are awaiting processing, and refunds are slow to be issued.
Interest earned on pending refunds
Many individual taxpayers whose 2019 tax returns show refunds will receive interest from the IRS by direct deposit (if refund was to be direct deposited to the Taxpayer account). Everyone else will receive a paper check. A notation on the check (INT Amount) will identify it as an interest payment on a tax refund.
Payment Due and Late Payment Notices
Automatic notices of tax due and penalties have been issued for 2019 tax returns where your payments have not yet been processed. We’re recommending patience as the IRS resolves this – calling or contacting the IRS will be futile. If you paid your tax when we filed your return you will most likely not owe a penalty. We expect the IRS to correct these notices as they work through the backlog of tax payments.
Feel free to call us. If you receive an IRS Notice for any other issue, please upload a copy of the notice to us as soon as possible so that we can assist you in investigating the notice.
Davies Tax Advisors
At Davies Tax Advisors we offer comprehensive advisory services for businesses, individuals, trusts and estates. We focus primarily in the areas of tax, business consulting, accounting and personal financial planning. We differentiate ourselves in the industry by providing individualized, practical advice to insure that our clients realize the best possible outcomes. Our high client retention rate is the result of our mission to be THE trusted advisor for each and every client.