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TAX SEASON 2021 - INCOME TAX PREPARATION

Your 2021 individual income tax returns are due Monday, April 18, 2022. We can promise to have your returns completed and back to you in time for filing, only if your organizer and tax information are in our office by Tuesday, March 1, 2022.  Please plan to return your signed E-file authorization forms to us no later than Monday, April 11, 2022.   

Organizers - Please complete this data organizer as thoroughly as possible. The better organized you are, the faster your income tax returns can be completed which, in turn, will reduce the preparation time and costs. Please let us know if you would like your original tax data returned to you. We are planning to use CCH ProSystems to process your 2021 income tax returns. We have used CCH ProSystems services for over thirty-five years, and we have been very pleased with their confidential and professional processing of returns.

Completing an Organizer - Please review your organizer carefully. Cross out any items that are pre-printed, but no longer apply to you (children filing their own returns, bank accounts, etc.). If you receive W-2's, 1099's, brokerage statements, K-1's, clip them to the appropriate pages in the organizer. There is no need to rewrite this information. The organizer is a guide for you to gather the paperwork we will need to prepare the return.  Please keep your organizer until it is complete.  If you always have a late K-1 however, send everything else and note what you are waiting for.  If you upload your data, please request a link from our office.  The Portal is no longer available.

Appointments Due to ongoing Covid-19 concerns, there will be no in office appointments until further notice.  Zoom or phone appointments are available for planning or tax questions.  You may drop off your data outside of our office suite in the box provided.  This may change as Covid changes.

SafeSend – Beginning this year we will be delivering all tax returns electronically, via SafeSend.  SafeSend is a safe delivery method that protects your data and allows you to review your returns, electronically sign e-File forms, pay tax due payments and estimates.  We have been training on the software and have found it very easy to use.  It does not require you to remember a password and is very user-friendly.  We will be available for questions during this change so please, give it a try and call if you have problems.  For the few clients who want paper copies of their returns, we will accommodate this.  Client Experience Tutorial

IRS sending January information on Advanced CTC and EIPs

The IRS has announced that it will be issuing the following two separate information letters to taxpayers in January 2022:

  • Letter 6419, containing the amount of Advanced Child Tax Credit payments received by the taxpayer for 2021 and the number of qualifying children used to calculate the advanced payments; and
  • Letter 6475, containing the amount of Economic Impact Payments received by the taxpayer for 2021, including initial payments and any “plus-up” payments received.

“Plus-up” payments were additional payments the IRS sent to taxpayers who received a third Economic Impact Payment based on a 2019 tax return or information received from the Social Security Administration, Railroad Retirement Board, or Department of Veterans Affairs.  Plus-up payments were also made to taxpayers who may have been eligible for a larger payment based on their 2020 tax return.  The Advanced Child Tax Credit payments and the third round of Economic Impact Payments as appliacble must be reconciled on you 2021 personal income tax returns.  The first two rounds of Economic Impact Payments were reconciled on the 2020 tax returns.

 

Mandatory Health Insurance (Individual Coverage Responsibility)

Prior to 2019 the IRS was handling the enforcement of mandatory health insurance coverage for individuals as previously enacted by the "Obamacare Act".  The penalty for failure to maintain a minimum health insurance coverage was administered via the federal tax return.  Starting in 2019 the IRS is no longer enforcing a required mandatory coverage.  However please be aware that California and some other states have their own mandatory health insurance coverage provisions.  Furthermore, please note that if you availed yourself of Advance Premium Credits for your health insurance and the amount of such credit taken is higher than the allowed based on your Modified Adjusted Gross Income you will still be required to repay the excess credit so taken on your 2020 federal tax return.  Therefore, it is imperative to submit with your tax data to us any Form 1095-A, 1095-B or 1095-C you will receive from your health insurance provider so that we can correctly prepare the applicable form on your federal tax to reconcile the Advance Premium Credits.  Failure to do so will result in delays of your tax return processing by the taxing authority and generally the IRS will issue a notice requiring you to submit the credit reconciliation form before your filed federal tax return can be processed.  Similarly, it is important to provide to us the California equivalent tax forms supplied by your health insurance provider which are separate from the federal forms and are essential to apply the mandatory minimum health coverage reconciliation on your 2021 California tax return.

 

 

Business Meal Expenses

Generally, the business deduction allowable for food or beverage expenses is limited to 50 percent of the amount spent. However, Consolidated Appropriations Act 2021 enacted a more lenient rule for expenses relating to food and beverages purchased from restaurants in 2021 and 2022. Under that rule, a 100 percent deduction is allowed, providing the expense is properly documented which has always been a requirement. As part of that documentation, the business purpose of the meal must be provided. The term "restaurant" in this case means a business that prepares and sells food or beverages to retail customers for immediate consumption, regardless of whether the food or beverages are consumed on the business's premises. It does not include a business that primarily sells pre-packaged food or beverages not for immediate consumption, such as a grocery store; specialty food store; beer, wine, or liquor store; drug store; convenience store; newsstand; or a vending machine or kiosk.

Required Minimum Distributions (IRA and Retirement Accounts) - Reinstated for 2021 and Subsequent Years

Required Minimum Distributions (RMD's) for 2020 were suspended pursuant to the CARES Act.  However, RMD's were required for 2021 and later years.  Consequently, if you were previously taking RMD's (prior to 2020) you will receive all of the requisite Form 1099-R from the respective custodians of IRA and retirement plan accounts as you were required to take your 2021 RMD from the applicable accounts.  Please make sure to provide all of the applicable Form 1099-R you receive to us for the preparation of your 2021 tax returns.  Furthermore, please note that if you were previously not required to start RMD's the post 2019 rules changed the age for the initial RMD to when the owner of the IRA or retirement account turns 72 years old (changed from 70.5 in 2019 by the SECURE Act).

We are looking forward to working with you again this year.

                                                                                   

                                              

Jorstad Inc. Staff Contact Information & Billing Rates

 

Phone 415-459-6622

Fax 415-459-6104

 

 

Timothy Jorstad

$ 550

tim@jorstad.com

Ext 111

 

Rado Simeonov

$ 375

rado@jorstad.com

Ext 120

 

John Kirk

$ 350

john@jorstad.com

Ext 119

 

Michael Stites

$ 350

mike@jorstad.com

Ext 114

 

Ratna Kennedy

$ 250

ratna@jorstad.com

Ext 121

 

Elizabeth Sykes

$ 235

liz@jorstad.com

Ext 122

 

Kirstie Feist

$ 200

kirstie@jorstad.com

Ext 118

 

 

 

Deisi Gomez

$ 150

deisi@jorstad.com

Ext 110

 

Deb Jorstad

$ 200

deb@jorstad.com

Ext 117

 

 

 

These are standard billing rates, higher rates may apply to special projects

 

 




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