April 2, 2021

April Newsletter

Here are your Articles for April 2, 2021.
More Economic Impact Payments set for disbursement in coming days; taxpayers should watch mail for paper checks, debit cards
The Internal Revenue Service announced today that the next batch of Economic Impact Payments will be issued to taxpayers this week, with many of these coming by paper check or prepaid debit card.

For taxpayers receiving direct deposit, this batch of payments began processing on Friday and will have an official pay date of Wednesday, March 24, with some people seeing these in their accounts earlier, potentially as provisional or pending deposits. A large number of this latest batch of payments will also be mailed, so taxpayers who do not receive a direct deposit by March 24 should watch the mail carefully in the coming weeks for a paper check or a prepaid debit card, known as an Economic Impact Payment Card, or EIP Card.

No action is needed by most people to obtain this round of Economic Impact Payments (EIPs). People can check the Get My Payment tool on IRS.gov on to see if the their payment has been scheduled.


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Tax Time Guide: IRS reminds taxpayers of recent changes to retirement plans
The Internal Revenue Service today reminded taxpayers about the rules for required minimum distributions (RMDs) from retirement accounts.

A retirement plan account owner must normally begin taking an RMD annually starting the year he or she reaches 70 ½ or 72, depending on their birthdate and maybe the year they retire. Retirement plans requiring RMDs include traditional, Simplified Employee Pension Plan (SEP) and Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement Accounts; 401(k), 403(b), 457(b), profit sharing and other defined contribution plans.


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IRS begins delivering third round of Economic Impact Payments to Americans
The Internal Revenue Service announced today that the third round of Economic Impact Payments will begin reaching Americans over the next week.

Following approval of the American Rescue Plan Act, the first batch of payments will be sent by direct deposit, which some recipients will start receiving as early as this weekend, and with more receiving this coming week.

Additional batches of payments will be sent in the coming weeks by direct deposit and through the mail as a check or debit card. The vast majority of these payments will be by direct deposit.

No action is needed by most taxpayers; the payments will be automatic and, in many cases, similar to how people received the first and second round of Economic Impact Payments in 2020. People can check the  Get My Payment tool on IRS.gov on Monday to see the payment status of the third stimulus payment.


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Tax Time Guide: Get credit for IRA contributions made by April 15 on 2020 tax returns
The Internal Revenue Service notes that taxpayers of all ages may be able to claim a deduction on their 2020 tax return for contributions to their Individual Retirement Arrangement (IRA) made through April 15, 2021. There is no longer a maximum age for making IRA contributions.

An IRA is designed to enable employees and the self-employed to save for retirement. Most taxpayers who work are eligible to start a traditional or Roth IRA or add money to an existing account.

Contributions to a traditional IRA are usually tax deductible, and distributions are generally taxable. There is still time to make contributions that count for a 2020 tax return, if they are made by April 15, 2021. Taxpayers can file their return claiming a traditional IRA contribution before the contribution is actually made. The contribution must then be made by the April due date of the return. While contributions to a Roth IRA are not tax deductible, qualified distributions are tax-free. In addition, low- and moderate-income taxpayers making these contributions may also qualify for the Saver’s Credit.


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EIC: New Law Makes Major Changes
The American Rescue Plan Act liberalizes the rules for claiming the earned income credit (EIC). Some of the changes are for 2021 only, but others are permanent, further complicating the eligibility requirements for this tax break. Here are the details to help you determine whether you or a loved one can benefit from the EIC and, if so, how much your 2021 credit will be under the new law.


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Help a Friend Maneuver Out of Debt
Credit card debts can pile up quickly for many reasons including illness, job loss and overspending. If you know someone who seems overwhelmed by financial problems, here’s a guide that can help the individual come up with solutions that don’t involve selling assets or declaring bankruptcy.


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Is it Okay to Borrow from Your 401(k)?
People seem to be relying less on credit these days, but the cost of carrying a balance is still high. Some people question whether it would be more cost effective to borrow from their 401(k) accounts to pay off high cost debt. Anyone considering that option should carefully weigh the advantages and disadvantages of a 401(k) loan before taking action.


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Squeeze More Out of a Company SEP
SEP retirement plans are easy to set up and maintain, so they may be the perfect choice for a small company. Here is a quick rundown of the advantages and disadvantages of simplified employee pension plans.


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