Taxpayers who use a tax professional should mention the UI adjustment to their practitioner during next year’s filing season. Again, patience is recommended, but an amended return could be indicated. Depending on the couple’s effective tax rate, the savings could be from a little over $1,000 to a few thousand dollars! Again, the IRS is automatically adjusting returns but it is prudent if you filed a joint return in a community property state and received over $10,200 in UI to review your direct deposits and ensure that you got the benefit of the maximum exclusion amount available to you (up to $20,400). That means if one spouse on a joint return received $25,000 in UI and the other spouse received less than the exclusion amount (or nothing) each taxpayer was allowed to exclude a full $10,200. UI is considered community income in community property states. This was due to late guidance that created another automatic adjustment. Taxpayers who received UI and who live in community property states also may be seeing “magic money” from the IRS appearing in their bank accounts. If not, they should continue to be patient while their return is undergoing manual review.Įxtra Refunds for Taxpayers In Community Property States If they did, the return is likely to be released in the last wave of automatic adjustments. Taxpayers who filed their returns and included the exclusion but who have not received their refunds should verify that they included the description. Consequently, many such returns are in a pile somewhere awaiting their turn for manual review. The IRS requires manual review of any tax return with a negative amount on Line 8 and nothing in the description field. Taxpayers who self-prepared their returns, however, may have forgotten to include the description. To claim the exclusion taxpayers entered a negative amount on Line 8 with “unemployment compensation exclusion” or “UCE” entered in the description field. UI is entered on Line 7 of Form 1040, Schedule 1. Taxpayers who filed returns after the ARP became law were allowed to exclude up $10,200 in unemployment insurance per taxpayer and many did.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |