Five Star Tax & Business Solutions

The whirlwind of tax changes just keeps going. Now if you have children 17 or under there is a new, higher child tax credit in place for 2021. Here is what you need to know: Age matters. The old credit was for children under the age of 17. The new credit goes through age 17 and includes an increased credit for children under the age of 6. The new credit amount. The child tax credit goes from $2,000 per qualifying child up to $3,000 per child. The amount increases to $3,600 pe...r child if your child is under the age of six. Fully refundable. You will get the child tax credit even if you do not owe tax. The old rules required $2,500 in minimum earnings and only up to $1,400 of the credit was refundable. Phaseouts just got a lot more complicated. As with the past child tax credit, you can only receive the credit if your income is below a threshold amount. The $200,000 threshold for unmarried taxpayers and $400,000 threshold for married taxpayers is still in place for the first $2,000 of the 2021 credit. To get the entire $3,000 or $3,600 credit in 2021, your adjusted gross income must be under $75,000 for single taxpayers, $112,500 for head of household taxpayers, and $150,000 for married taxpayers. New periodic payments. The new child tax credit also allows you to receive monthly payments for 50 percent of the credit from July 2021 through December 2021. There will be a new IRS website to opt out of receiving monthly payments if you prefer to receive your entire child tax credit when you file your 2021 tax return in 2022. Unless noted, the other requirements to receive the child tax credit stay in place. So you must still pass rules for the relationship test and support tests to qualify. As always, should you have questions please feel free to contact us.

Despite the individual tax filing due date being delayed until May 17, 2021, there is no delay in paying first quarter estimated tax payments for the 2021 tax year. So it is time to review your tax situation for the 2021 tax year and make an estimated quarterly tax payment using Form 1040-ES. First quarter due date: Thursday, April 15, 2021 You are required to withhold or prepay throughout the 2021 tax year at least 90 percent of your 2021 total tax bill, or 100 percent of yo...ur 2020 federal tax bill.* A quick look at your 2020 tax return and a projection of your 2021 tax obligation can help determine if a quarterly payment might be necessary in addition to what is being withheld from any paychecks. Here are some things to consider: Underpayment penalty. If you do not have proper tax withholdings throughout the year, you could be subject to an underpayment penalty. A quick payment at the end of the year may not be enough to avoid the underpayment penalty. W-2 withholdings have special treatment. A W-2 withholding payment can be made at any time during the year and be treated as if it was made throughout the year. If you do not have enough to pay the estimated quarterly payment now, you may be able to adjust your W-2 wage withholdings to make up the difference. Self-employed. In addition to paying income taxes, self-employed workers must also account for paying Social Security and Medicare taxes. Creating and funding a savings account for this purpose can help avoid the cash flow hit each quarter to pay your estimated taxes. Call 816-444-0004 www.FSTKC.com

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42.6 million Americans have filed for unemployment benefits since the shutdowns started. Right now those out-of-work Americans on state unemployment rolls are receiving an additional $600 per week in unemployment insurance (UI)regardless of their previous incomeon top of their state benefits. Pandemic Emergency Unemployment Compensation (PEUC) The extra $600 per week in UI was included in the March stimulus bill as a financial cushion for those who lost their jobs, with payments going through July 31.

The tax deadline is fastly approaching. We offer virtual services. You can file an extension if you need some additional time. 816-444-0004 of email [email protected]

Small business grant program for Platte Country businesses. For more information about this program contact [email protected] | 816.726.7841

Funding for Clay County Business owners.

The Senate on Tuesday cleared legislation to extend the deadline for businesses to apply for coronavirus aid under the Paycheck Protection Program (PPP), which will expire at the end of Tuesday. Under the bill passed by the Senate by unanimous consent, the deadline for applying for PPP loans - which go to businesses with fewer than 500 employees - would be extended until Aug. 8. There's approximately $130 billion in unspent money under the Paycheck Protection Program, which has prompted a discussion among lawmakers about what to do with the funds.

The Department of the Treasury and the Internal Revenue Service (IRS) have announced that the 2019 tax filing deadline remains July 15, 2020. Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15, 2020, to July 15, 2020. With many states still under travel and work restrictions due to the pandemic, some taxpayers and tax professionals alike were hoping that the date might be extended. However, the tax deadline is July 15, 2020. Contact us at 816-444-0004 or [email protected] for information about virtual streamline tax preparation service.

If you have not applied for the Payroll Protection Program there is still time. The application process stops June 30, 2020. If your bank is not participating and you need to be referred to a banker, email us immediately at [email protected] You are eligible even if you are a sole proprietor and you do not process traditional payroll. If you received the EIDL you can also receive PPP.... Churches are eligible. Non Profits are eligible. Don't be afraid of the PPP. We are here to help you! www.Fstkc.com See more

On June 15, 2020, the Small Business Administration (SBA) reopened the Economic Injury Disaster Loan (EIDL) application process. It is important to know that you can apply for the EIDL even if you have received a PPP loan, so long as the funds are not used for the same purposes. Additionally, please note that EIDL cannot be forgiven. https://covid19relief.sba.gov/#/

There is a backlog of millions of unprocessed tax returns. The IRS has gradually been resuming normal operations in many states including Kentucky, Utah, Texas, California, and Kansas City, as of June 1.

In response to the national health crisis, the IRS postponed the usual April 15 tax filing deadline to July 15. This extension also applies to payment of tax liability on a 2019 return. What’s more, you can still obtain the automatic six-month filing extension by filing a request on Form 4868. This enables you to file your 2019 return as late as October 15. **Note**: This second extension does NOT extend the due date for paying tax beyond July 15.

The IRS is adding 3,500 telephone representatives to answer common questions about the Economic Impact Payments (stimulus payments). For inquiries that can't be satisfied by visiting the website call the following numbers: 1-800-919-9835 1-800-829-1040 #7