Tax LEtter & updates

Dear Clients, Family, and Friends:
 
2021 proved as complicated as 2020 was! We would like to express our sincerest apologies to those of you that had to wait longer than you should have for your tax returns. With all the tax law changes, staffing issues, COVID complications, etc.; there were many delays. We really appreciate your patience. Now that 2021 is ending, it’s time to start thinking about getting your taxes prepared so we can put this year behind us.
 
Our Staff:
 
Didi remains at the front desk as your point of contact. You can reach her at 218.464.1510 or at didi@serenityduluth.com. She will answer your general questions and help get you into our schedule. (More explanation to come)

Deni, Dani, and DJ are all here to assist you in preparing your returns and Sheri is here to keep the office running smoothly, (if that’s possible).

Barb and Kai have joined the team this year, and will be helping with payroll, bookkeeping, and processing tax returns.

Visit our Facebook page and Website (www.serenityduluth.com) for updates on all things Serenity.
 
With Covid and its variants, we will be keeping the office closed to the public this year. We are revamping how things will be handled. Please read the following carefully:
 
Our Tax Season hours begin Monday, January 31, 2022
Monday – Thursday   8:30 a.m. to 8:00 p.m.
Friday - Saturday   8:30 a.m. to 5:00 p.m.
 
While there will NOT be any in-person appointments for this Tax Season; we will still be able to help you complete your taxes.  It is disappointing that we will not be able to have our face-to-face interactions again this year, however, our priority is the health and safety of our employees and clients. We appreciate your understanding.

Our office is “OPEN” during the hours listed above; our interior door will be locked. The drop bin will still be in the entry area.

 
The procedure will be a little different than last year because it wasn’t as successful as we would have liked.  Please note the following:
 

1. Bring us your tax documents. You can drop off, email, fax, or mail in your information. Didi will confirm that we have received it.
   1. Please make sure that we have all your current contact information - including phone number, email address, and current mailing address, and preferred method of contact. We will also need an updated copy of your driver’s license, including your spouse’s. (If you are a new client, we will need a copy of social security cards for every person listed on the return)
   2. If you have an IP-Pin, from the IRS, we MUST have a copy of the letter you received. This is a six-digit number that prevents someone else from filing a tax return using your Social Security number or Individual Taxpayer Identification Number. The IP PIN is known only to you and the IRS. It helps us verify your identity when you file your electronic or paper tax return.
   3. If you chose to email your information to us, please send to  didi@serenityduluth.com.

 
* Returns will be handled in the order that they are received. Your preparer will work on your return with the information provided. If additional information is needed, we will contact you by your preferred method of contact. 

* When your return is complete, either your preparer or a tax assistant will contact you to schedule a time to go over the results with you. 

* There are a couple of options for you to sign your return, preferably electronically with Secure File Pro. Your preparer will discuss the best option for you. 

*Once your signature and payment have been received, your return will then enter our “checking process”. You will be notified if anything changes with your return. 

1. Your return will be e-filed per IRS guidelines after the above has been completed. WE CANNOT EFILE A RETURN WITHOUT YOU PROVIDING YOUR DRIVERS LICENSE OR STATE ID.

 
 
Some notable facts for the 2021 Tax Season:

Standard deduction
                                                                        2021                2022 (preliminary)
                                               Single              $12,550           $12,950
                                               MFJ/QW         $25,100           $25,900
                                                HOH               $18,880           $19,400
Mileage rates
 
                                                                        2021                2022
                                                Business          .56                   .585
                                                 Charity            .14                   .14
                                                 Medical           .16                   .18

 
 
Dependent credits have changed for 2021
Child Tax Credit - $3,600 for dependents 5 and under
                         $3,000 for dependents age 6-17
Other Dependent Credit              $500
 
We will need to know the amount that you received for the Advance Child Tax Credit Payments in 2021.  This amount reduces the credit on your tax return to a minimum of $2000. You can view this information by setting up an account on the IRS website. Access your account or set up a new one at https://www.irs.gov/credits-deductions/child-tax-credit-update-portal. You may also receive a letter from the IRS with the amount that you received, please keep this with your tax documents.
 
The Child Tax Credit is for your child ages 17 and under. The Other Dependent Credit is for your child who is 18 or older, and other dependents that are not your child (ask your preparer for more information on determining if someone qualifies as an Other Dependent)
Child Care Credit has also been impacted by the American Rescue Plan Act and could be beneficial if you have children in daycare. Your preparer will discuss this in more detail if it applies to you.

Unemployment Benefits
Unemployment benefits ARE taxable income, there is NO subtraction for 2021. This could result in additional tax due if you did not have enough withholding.

IRA/401K Information
401(k) contribution limits:      2021 - $19,500 (+ an additional $6,500 catchup for over 50)
                                                2022 - $20,500 (+ and additional catch up of $6,500 over 50)
IRA Contributions:     $6,000/person (+ an additional $1,000 catch up for those over 50)  

Married, but thinking about filing separately?
There are disadvantages.
The following is a list of credits/benefits that you do not get if you file separately

• Earned Income Credit
• Credit for Age or Disability
• Child and Dependent Care Credit
• Adoption Credit
• Education Credits
• Student Loan Interest Deduction
• Savings Bond Interest Exclusion

There are other things that can be affected if you file separately. If you’re thinking about doing this, discuss your situation with your preparer.

 
 
Premium Tax Credit (health insurance):
There is still no penalty for not having insurance.
If you get a reduced insurance premium through your state (Affordable Health Care) You still need to claim it on your tax return.  Be sure to bring in your 1095-A, not having it can delay refunds or cause you to pay in.

Stimulus (EIP) Payments
You will receive a form – Notice 1444 from the IRS stating what you received for stimulus payments in 2021. The third and only stimulus payment for 2021 was $1,400 per person. You WILL NEED to report how much you received on your tax return. If you do not have your Notice 1444, you can log into your account with the IRS and obtain the payment information. (See Advance Child Tax Credit information above for website if needed)

Minnesota and Wisconsin
We will be keeping track of any changes that MN and WI make and share that information with you as we receive it. Watch our Facebook page and website for updates.
 
Pricing
 
Because of the increasing complexity and ever-changing tax laws our base price will be increasing this year to $150 for Federal and $50 for each state.

If your return involves any bookkeeping, including QuickBooks, spreadsheets, or going through receipts/bank statements before the tax return can be completed, this preparation will be billed at $90 per hour in addition to the cost of the tax return.

Tax Planning for 2022, and beyond, will also be billed out at $90/hour.
If we need to make a call to the IRS on your behalf, this could also result in a $90/hour charge, depending on the circumstances of the call.

For those clients that have dependents (children) on their tax return and want Serenity to complete their returns (if applicable), the price will stay at 50% of what the tax return would be priced at if it were not a dependent return. (Minimum of $100)

Amendments made necessary by change in the tax law, will be billed at normal rates.
  
Important dates:
 
Start of IRS e-file acceptance:                                                By Feb 15, 2022
Federal/State 2021 filing deadline - Businesses:                    Tuesday, March 15, 2022
Federal/State 2021 filing deadline – 1040 and C-Corps:       Monday April 18, 2022
Non-Profits     (990):                                                               Monday May 16, 2022
 
                                                             Estimated payments:
  Quarter 1 (Jan, Feb, Mar)                                           April 18, 2022
Quarter 2 (Apr, May)                                                   June 15, 2022
Quarter 3 (Jun, Jul, Aug)                                             September 15, 2022
Quarter 4 (Sept, Oct, Nov, Dec)                                 January 16, 2023
 
Extensions:
**Filing for an extension does NOT extend your payment deadline, so if you need to file an extension, please talk to your preparer about submitting a payment so that you do not incur penalties** 
 
Also, new this year, if you wish to have us file an extension for you, please let us know by April 5, 2022, or sooner, if we don’t hear from you, no extension will be filed.
                                                                       
We are still offering our Referral Discount!
 
Your loyalty, support, and friendship to the Serenity family is why we are here.  We appreciate the opportunity to serve all your tax preparation needs. Your faith in us, through your personal recommendation to others, is humbling.  As usual, for your personal recommendations to new tax clients, we discount your next year’s tax preparation by $25 as a thank you. 
 
The discount for Active Military and Front-Line Essential Workers will be $50. Speak with your preparer to discuss details.
 
 
 
Sincerely,              Deni          Sheri            Dani             DJ             DiDi             Barb             Kai