For the first time, the maximum educator expense deduction rises to $300 in 2022; limit $250 for those filing 2021 tax returns
WASHINGTON – The Internal Revenue Service today reminded teachers and other educators planning ahead for 2022 that they’ll be able to deduct up to $300 of out-of-pocket classroom expenses when they file their federal income tax return next year.
This is the first time the annual limit has increased since the special educator expense deduction was enacted in 2002. For tax-years 2002 through 2021, the limit was $250 per year. This means for people currently filing their 2021 tax returns due in April, the deduction is limited to $250. The limit will rise in $50 increments in future years based on inflation adjustments.
For 2022, an eligible educator can deduct up to $300 of qualifying expenses. If they are married and file a joint return with another eligible educator, the limit rises to $600. But in this situation, not more than $300 for each spouse.
Educators can claim this deduction, even if they take the standard deduction. Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal or aide in a school for at least 900 hours during the school year. Both public- and private-school educators qualify.
Educators can deduct the unreimbursed cost of:
- Books, supplies and other materials used in the classroom.
- Equipment, including computer equipment, software and services.
- COVID-19 protective items to stop the spread of the disease in the classroom. This includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers and other items recommended by the Centers for Disease Control and Prevention (CDC).
- Professional development courses related to the curriculum they teach or the students they teach. For these expenses, it may be more beneficial to claim another educational tax benefit, especially the lifetime learning credit. For details, see Publication 970, Tax Benefits for Education, particularly Chapter 3.
Qualified expenses don’t include expenses for home schooling or for nonathletic supplies for courses in health or physical education. As with all deductions and credits, the IRS reminds educators to keep good records, including receipts, cancelled checks and other documentation.
Reminder for 2021 tax returns being filed now: Deduction limit is $250
With the tax deadline just around the corner, the IRS reminds any educator still working on their 2021 return that they can claim any qualifying expenses on Schedule 1, Line 11. For 2021, the deduction limit is $250. If they are married and file a joint return with another eligible educator, the limit rises to $500. But in this situation, not more than $250 for each spouse.
Jeffrey Schweitzer Of Northeast Financial Strategies, Inc. Honored As Wrentham’s 2022 Local Business Person Of The Year
BOSTON, MA: February 16, 2022 — The largest online referral network for small businesses, Alignable.com is announcing the results of its national search for leaders who’ve gone above and beyond guiding peers and supporting entire communities as they strive to recover.
Today, Alignable’s network has chosen Jeffrey Schweitzer of Northeast Financial Strategies, Inc. as Wrentham’s 2022 Business Person Of The Year for the second year in a row!
The 2022 contest is the most popular competition Alignable has ever hosted, marking a 64% increase in participation over last year. In all, 2,400+ small business owners were elected by their peers to be their Local Business People Of The Year across the U.S. and Canada.
During the contest, which ran from Jan. 10 to Feb. 11, 2022, 160,000+ votes and 32,000+ testimonials were posted praising thousands of local leaders for helping their peers and communities through a turbulent year with many challenges: skyrocketing inflation, labor shortages, supply chain problems, and COVID variants.
Because of these issues, 70% of small businesses have yet to recover and recovery rates have declined 13% since December, according to Alignable’s latest poll of 6,305 small business owners. This recovery reversal highlights how important it is for the contest winners to continue their work helping even more businesses bounce back from pandemic-era hurdles.
Giving Is The Glue Holding Us Together
“In our tight-knit community, you almost always get back what you give,” said Schweitzer. “And the challenges we’ve all encountered have compelled many of us to offer counsel and other support to peers struggling to keep their businesses afloat. While I’m thrilled to receive this award, it’s really a testament to our entire community. And it reinforces my resolve to push toward a full recovery for everyone here in Wrentham by the end of 2022, if not earlier.”
Schweitzer received a special badge on his Alignable profile, recognizing this big win. In past years, the awareness generated through similar contests has spurred expanded connections, as well as new business for many winners. Schweitzer received the same award for the 2020-2021 contest.
Driving Recognition Is Key
“This has been a fun and rewarding contest to watch unfold,” said Alignable’s President & Co-Founder Venkat Krishnamurthy. “Local business owners are the heart and soul of their communities and they ought to get way more recognition for all they do. Friendly competition aside, this contest generated some incredible peer testimonials (to the tune of 32,000+), showing exactly why small business owners are stronger together.”
To arrange interviews with Jeffrey Schweitzer and/or an Alignable representative, please contact Chuck Casto at firstname.lastname@example.org. He also can offer JPEGs and other visuals, as well as local winner testimonials.
About Northeast Financial Strategies, Inc.
Northeast Financial Strategies Inc. is a financial services organization with highly trained professionals working together to provide products and services to individuals & business owners. The firm is dedicated to problem solving which is reflected in their diversified portfolio of resources. NFS offers Financial & Estate Planning, Investments, Insurance, Accounting, Payroll, Income Tax Preparation, & Notary Public Services for Individuals & Small Businesses.
Since opening their office in Wrentham in the Fall of 2010, Northeast Financial Strategies has consistently been voted by readers #1 in the Wicked Local Awards in the categories of Accountant, Financial Planner and Insurance Agency. NFS have also brought home Regional Favorite Awards in the Accountant & Financial Planner categories consistently since 2016. Jeffrey Schweitzer was also awarded the 2020-2021 Local Business Person of the Year Award by Alignable and identified as a Top 31 Insurance Agency in the Providence area by Expertise.com.
Alignable.com is the largest online referral network for small businesses in the U.S. and Canada. With 7 million+ members across 35,000+ local communities, Alignable is the network where small business owners drive leads and prospects, generate referrals, land new business, build trusted relationships, and share great advice.
WASHINGTON − The Internal Revenue Service announced that the nation’s tax season will start on Monday, Jan. 24, 2022, when the tax agency will begin accepting and processing 2021 tax year returns.
The January 24 start date for individual tax return filers allows the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly. Updated programming helps ensure that eligible people can claim the proper amount of the Child Tax Credit after comparing their 2021 advance credits and claim any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax return.
“Planning for the nation’s filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare,” said IRS Commissioner Chuck Rettig. “The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don’t face processing delays. Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year. And we urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year. People should make sure they report the correct amount on their tax return to avoid delays.”
The IRS encourages everyone to have all the information they need in hand to make sure they file a complete and accurate return. Having an accurate tax return can avoid processing delays, refund delays and later IRS notices. This is especially important for people who received advance Child Tax Credit payments or Economic Impact Payments (American Rescue Plan stimulus payments) in 2021; they will need the amounts of these payments when preparing their tax return. The IRS is mailing special letters to recipients, and they can also check amounts received on IRS.gov.
Like last year, there will be individuals filing tax returns who, even though they are not required to file, need to file a 2021 return to claim a Recovery Rebate Credit to receive the tax credit from the 2021 stimulus payments or reconcile advance payments of the Child Tax Credit. People who don’t normally file also could receive other credits.
April 18 tax filing deadline for most
The filing deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, 2022, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way federal holidays do. The due date is April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia for everyone except taxpayers who live in Maine or Massachusetts. Taxpayers in Maine or Massachusetts have until April 19, 2022, to file their returns due to the Patriots’ Day holiday in those states. Taxpayers requesting an extension will have until Monday, Oct. 17, 2022, to file.
Awaiting processing of previous tax returns? People can still file 2021 returns
Rettig noted that IRS employees continue to work hard on critical areas affected by the pandemic, including processing of tax returns from last year and record levels of phone calls coming in.
“In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me,” Rettig said. “IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us. And we will continue to look for ways to improve. We want to deliver as much as possible while also protecting the health and safety of our employees and taxpayers. Additional resources are essential to helping our employees do more in 2022 – and beyond.”
The IRS continues to reduce the inventory of prior-year individual tax returns that have not been fully processed. As of Dec. 3, 2021, the IRS has processed nearly 169 million tax returns. All paper and electronic individual 2020 refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review.
Taxpayers generally will not need to wait for their 2020 return to be fully processed to file their 2021 tax returns and can file when they are ready.
Key information to help taxpayers
The IRS encourages people to use online resources before calling. Last filing season, as a result of COVID-era tax changes and broader pandemic challenges, the IRS phone systems received more than 145 million calls from January 1 – May 17, more than four times more calls than in an average year. In addition to IRS.gov, the IRS has a variety of other free options available to help taxpayers, ranging from free assistance at Volunteer Income Tax Assistance and Tax Counseling for the Elderly locations across the country to the availability of the IRS Free File program.
“Our phone volumes continue to remain at record-setting levels,” Rettig said. “We urge people to check IRS.gov and establish an online account to help them access information more quickly. We have invested in developing new online capacities to make this a quick and easy way for taxpayers to get the information they need.”
Last year’s average tax refund was more than $2,800. More than 160 million individual tax returns for the 2021 tax year are expected to be filed, with the vast majority of those coming before the traditional April tax deadline.
Overall, the IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically if they choose direct deposit and there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible.
By law, the IRS cannot issue a refund involving the Earned Income Tax Credit or Additional Child Tax Credit before mid-February, though eligible people may file their returns beginning on January 24. The law provides this additional time to help the IRS stop fraudulent refunds from being issued.
Some returns, filed electronically or on paper, may need manual review, which delays the processing, if our systems detect a possible error or missing information, or there is suspected identity theft or fraud. Some of these situations require us to correspond with taxpayers, but some do not. This work does require special handling by an IRS employee so, in these instances, it may take the IRS more than the normal 21 days to issue any related refund. In those cases where IRS is able to correct the return without corresponding, the IRS will send an explanation to the taxpayer.
File electronically and choose direct deposit
To speed refunds, the IRS urges taxpayers to file electronically with direct deposit information as soon as they have everything they need to file an accurate return. If the return includes errors or is incomplete, it may require further review that may slow the tax refund. Having all information available when preparing the 2021 tax return can reduce errors and avoid delays in processing.
Most individual taxpayers file IRS Form 1040 or Form 1040-SR once they receive Forms W-2 and other earnings information from their employers, issuers like state agencies and payers. The IRS has incorporated recent changes to the tax laws into the forms and instructions and shared the updates with its partners who develop the software used by individuals and tax professionals to prepare and file their returns. Forms 1040 and 1040-SR and the associated instructions are available now on IRS.gov. For the latest IRS forms and instructions, visit the IRS website at IRS.gov/forms.
Watch for IRS letters about advance Child Tax Credit payments and third Economic Impact Payments
The IRS started sending Letter 6419, 2021 advance Child Tax Credit, in late December 2021 and continues to do so into January. The letter contains important information that can help ensure the return is accurate. People who received the advance CTC payments can also check the amount of the payments they received by using the CTC Update Portal available on IRS.gov.
Eligible taxpayers who received advanced Child Tax Credit payments should file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive advanced Child Tax Credit payments can claim the full credit by filing a tax return.
The IRS will begin issuing Letter 6475, Your Third Economic Impact Payment, to individuals who received a third payment in 2021 in late January. While most eligible people already received their stimulus payments, this letter will help individuals determine if they are eligible to claim the Recovery Rebate Credit for missing stimulus payments. If so, they must file a 2021 tax return to claim their remaining stimulus amount. People can also use IRS online account to view their Economic Impact Payment amounts.
Both letters include important information that can help people file an accurate 2021 tax return. If the return includes errors or is incomplete, it may require further review while the IRS corrects the error, which may slow the tax refund. Using this information when preparing a tax return electronically can reduce errors and avoid delays in processing.
The fastest way for eligible individuals to get their 2021 tax refund that will include their allowable Child Tax Credit and Recovery Rebate Credit is by filing electronically and choosing direct deposit.
Tips to make filing easier
To avoid processing delays and speed refunds, the IRS urges people to follow these steps:
- Organize and gather 2021 tax records including Social Security numbers, Individual Taxpayer Identification Numbers, Adoption Taxpayer Identification Numbers, and this year’s Identity Protection Personal Identification Numbers valid for calendar year 2022.
- Check IRS.gov for the latest tax information, including the latest on reconciling advance payments of the Child Tax Credit or claiming a Recovery Rebate Credit for missing stimulus payments. There is no need to call.
- Set up or log in securely at IRS.gov/account to access personal tax account information including balance, payments, and tax records including adjusted gross income.
- Make final estimated tax payments for 2021 by Tuesday, Jan.18, 2022, to help avoid a tax-time bill and possible penalties.
- Individuals can use a bank account, prepaid debit card or mobile app to use direct deposit and will need to provide routing and account numbers. Learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool.
- File a complete and accurate return electronically when ready and choose direct deposit for the quickest refund.
Key filing season dates
There are several important dates taxpayers should keep in mind for this year’s filing season:
January 18: Due date for tax year 2021 fourth quarter estimated tax payment.
January 24: IRS begins 2022 tax season. Individual 2021 tax returns begin being accepted and processing begins
January 28: Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
April 18: Due date to file 2021 tax return or request extension and pay tax owed due to Emancipation Day holiday in Washington, D.C., even for those who live outside the area.
April 19: Due date to file 2021 tax return or request extension and pay tax owed for those who live in MA or ME due to Patriots’ Day holiday
October 17: Due date to file for those requesting an extension on their 2021 tax returns
It’s never too early to get ready for the tax-filing season ahead. For help with getting your taxes completed, please do not hesitate to reach out to our office or book an appointment right online here.
The IRS announced today that it will issue information letters to Advance Child Tax Credit recipients starting in December and to recipients of the third round of the Economic Impact Payments at the end of January. Using this information when preparing a tax return can reduce errors and delays in processing.
The IRS urged people receiving these letters to make sure they hold onto them to assist them in preparing their 2021 federal tax returns in 2022.
Watch for advance Child Tax Credit letter
To help taxpayers reconcile and receive all of the Child Tax Credits to which they are entitled, the IRS will send Letter 6419, 2021 advance CTC, starting late December, 2021 and continuing into January. The letter will include the total amount of advance Child Tax Credit payments taxpayers received in 2021 and the number of qualifying children used to calculate the advance payments. People should keep this and any other IRS letters about advance Child Tax Credit payments with their tax records.
Families who received advance payments will need to file a 2021 tax return and compare the advance Child Tax Credit payments they received in 2021 with the amount of the Child Tax Credit they can properly claim on their 2021 tax return.
The letter contains important information that can make preparing their tax returns easier. People who received the advance CTC payments can also check the amount of their payments by using the CTC Update Portal available on IRS.gov.
Eligible families who did not receive any advance Child Tax Credit payments can claim the full amount of the Child Tax Credit on their 2021 federal tax return, filed in 2022. This includes families who don’t normally need to file a tax return.
Economic Impact Payment letter can help with the Recovery Rebate Credit
The IRS will begin issuing Letter 6475, Your Third Economic Impact Payment, to EIP recipients in late January. This letter will help Economic Impact Payment recipients determine if they are entitled to and should claim the Recovery Rebate Credit on their tax year 2021 tax returns that they file in 2022.
Letter 6475 only applies to the third round of Economic Impact Payments that was issued starting in March 2021 and continued through December 2021. The third round of Economic Impact Payments, including the “plus-up” payments, were advance payments of the 2021 Recovery Rebate Credit that would be claimed on a 2021 tax return. Plus-up payments were additional payments the IRS sent to people who received a third Economic Impact Payment based on a 2019 tax return or information received from SSA, RRB or VA; or to people who may be eligible for a larger amount based on their 2020 tax return.
Most eligible people already received the payments. However, people who are missing stimulus payments should review the information to determine their eligibility and whether they need to claim a Recovery Rebate Credit for tax year 2020 or 2021.
Like the advance CTC letter, the Economic Impact Payment letters include important information that can help people quickly and accurately file their tax return.
More information about the Advance Child Tax Credit, Economic Impact Payments and other COVID-19-related tax relief may be found at IRS.gov.
As the 2022 tax filing season approaches, the IRS urges people to make sure an accurate tax return and use electronic filing with direct deposit to avoid delays.
The Internal Revenue Service says it’s on track to dig out of the pandemic-related backlog of tax year 2020 returns by year end 2021—just in time for the 2022 tax filing season.
Millions of taxpayers are still waiting for refunds and/or struggling to understand IRS notices saying their refund amounts have been adjusted. And the IRS expects to receive another 4 million returns for tax year 2020 by the October 15th tax filing extension deadline.
The National Taxpayer Advocate, Erin Collins, puts it bluntly: “Taxpayers need greater transparency regarding return processing” in her September blog series, Bumps in the Road Sequel. One of her suggestions is to provide a “dashboard” on the IRS website with real time numbers showing the progress on processing returns.
Here are the latest filing season statistics, and where you can go for help:
- As of October 2, the IRS had 6.8 million unprocessed individual 2020 tax year returns, down from 7.6 million the week before. The IRS has reduced the number of returns requiring special handling from an historical high of 9.8 million on May 1, 2021, to the current level of 224,000 individual returns. In some cases, these can take 90 to 120 days to process. To check the status, see Where’s My Refund?
- It’s not just 1040 tax returns in the pipeline. As of October 2, the IRS had 2.8 million unprocessed amended individual tax returns, Form 1040-X. The current processing time frame for these is 20 weeks, up from the usual 16 weeks. To check the status, see Where’s My Amended Return?.
- The Where’s My Refund tool is great if it shows that your refund was approved or sent. The problem is if your return is still in processing. If you are one of the millions of taxpayers whose return processing has been delayed, the tool just tells you that the return was received by the IRS and nothing more. If you try calling the IRS, the phone assistors typically do not have access to any more information then you can get online. The delay could be caused by a myriad list of reasons. Discrepancy in the amount of the Economic Income Payment is one of the primary causes of the delay.
- Another option to check on the status of your return is to set up an IRS online account, but only 40% of taxpayers trying to do so (as of August) were successful because of the multiple steps and security measures in place. If you do not succeed in setting up an online account, you can request an IRS transcript that should be mailed to you within 10 calendar days. Search “Refund Issued” to see what payments have been made to you.
By the time the American Rescue Plan was signed into law in March, nearly half of all 2020 individual tax returns had been filed. That law suspended the requirement to repay excess APTC health insurance credits and created a partial exclusion for up to $10,200 in unemployment benefits. All those taxpayers who had filed and paid taxes were suddenly due refunds. As of September 3, the IRS had processed a total of about 13 million taxpayer accounts to reflect the unemployment income exclusion and about 1 million accounts where the excess APTC was reported. As of mid-September, there were still about 436,000 individual returns awaiting processing in the error resolution system, the National Taxpayer Advocate reported, and those could need adjustments.
The latest confusion is surrounding letters sent to 6.5 million taxpayers, telling them a notice of a 60-day-appeal period was missing from letters they got earlier about their recovery rebate credit calculations on their 2020 tax returns not matching IRS records. “Although these and other notices are often confusing, it is critical — if you receive a letter from the IRS about your 2020 return, do not delay in your response, as that will only further postpone any potential refunds and may lead to more problems down the road,” the Taxpayer Advocate says.
Last week the IRS announced a new online information portal for taxpayers who have refunds of over $2 million that are also being held for special approval.