Tax Tips from Neotax Service

Treasury Issues Warning Going into Tax Season

Treasury Department officials took the preemptive step on Monday of warning taxpayers that the upcoming tax season, which begins on January 24 and will run through April 18, will be messy and could see delays. Pointing to staffing shortages and paperwork backlogs, officials said taxpayers will likely face frustrations similar to those of last year’s tax season. Potential problem areas include delays in the processing of refunds and returns as well as difficulty in reaching IRS. As of mid-November 2021, the IRS had a backlog of roughly 8.6 million returns left to process. In a separate statement, IRS Commissioner Charles Rettig said IRS is not able to provide the level of service taxpayers deserve and said that more resources for the agency are essential.

Senate Set to Vote on Unemployment Amendment

As President Biden works to secure enough votes for his $1.9 trillion COVID-19 relief package, Democratic leadership has agreed to an amendment by Senate moderates to keep unemployment benefits to their current $300 a week level and to eliminate the first $10,200 of unemployment insurance benefits from taxation for tax year 2020. The vote on the amendment is likely to occur this weekend as Congress rushes to complete the bill.

Unemployment Scam
This season has seen a rise in fraudulent claims of unemployment benefits from unscrupulous scammers. The result is that taxpayers may receive a 1099-G for unemployment benefits from certain states even if the taxpayer never made unemployment claims, or has never been in the state. For more information, read this article:

Identity Thieves Targeting Unemployment Benefits, Warns IRS The nation has been weathering nearly one million weekly initial unemployment claims since the beginning of the pandemic. For many qualifying Americans, unemployment insurance benefits are the only thing preventing food insecurity and homelessness while trying to find a new job. Unfortunately, some....