Dear Clients, Family and Friends:
Wow, what a year 2020 has been! We would like to take a moment to express our sincerest apologies to those of you that had to wait longer than you should have for your tax returns in the 2020 tax season. This year threw things at us that we never expected: COVID-19 complications, employment issues, the inability to contact any State or Federal agency - - the list goes on. Now that 2020 is ending, it’s time to start thinking about getting your taxes taken care of.
Didi is our newest Serenity team member, and she is here to be your point of contact. If you would like to set up a prescheduled appointment, Didi is your gal! You can reach her at 218.464.1510 or at email@example.com.
Of course, Deni, Dani, and DJ are all here to assist you in all things tax, while Sheri is here to keep the office running smoothly and keep us all in line (this is a BIG job).
Visit our Facebook page and Website (www.serenityduluth.com) for updates on all things tax, bookkeeping, and payroll. You can also contact us with questions or to request information in both places.
We are going to be doing things a little differently this year,
please read the following carefully!
Our Tax Season hours begin January 25, 2021
Monday – Thursday 8:30 a.m. to 8:00 p.m.
Friday - Saturday 8:30 a.m. to 5:00 p.m.
While we are “OPEN” during these hours, our interior office door will be locked. The drop bin that was implemented will still be in the entry area.
We will NOT be taking any in-person appointments this year, but we will still be able to help you complete your taxes. We are all disappointed that we will not be able to have our face-to-face interactions this year, however, our priority is the health and safety of our employees and clients. We appreciate your understanding.
There will be a learning curve in all of this, and we ask for your patience as we all figure it out together. While the way we take tax appointments has to change this year, the process of completing your return has not changed.
Here is a step-by-step list of what we will be doing:
Please note – if you make an appointment and do not have your information here at least 3 days prior, your appointment will be rescheduled once we receive your documents. The new appointment could be affected by availability of your preparer. In a normal year we schedule appointments close together, this year we will be allowing more time between appointments to allow for (possible) completion of returns.
If you normally drop off your information without an appointment, please feel free to do the same this year. These returns are processed in the order they have been received.
Some notable facts for the 2020 Tax Season:
Business .575 .56
Charity .14 .14
Medical .17 .16
Dependent credits are the same as last year:
Child Tax Credit $2,000
Other Dependent Credit $500
The Child Tax Credit is for your child ages 16 and under. The Other Dependent Credit is for your child who is 17 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)
Unemployment benefits ARE taxable income, including the extra Federal $600 per week if you received it. This could result in a tax due if you did not have enough withholding. When MN first started distributing the extra $600, they were not able to take withholding from it, even if you had it set up to have withholding from your regular unemployment. We are unsure if this was corrected for the new unemployment extension.
401(k) contribution limits: $19,500 (+ an additional $6,000 catchup for over 50)
IRA Contributions: $6,000/person (+ an additional $1,000 catchup for over 50)
Distributions that are COVID-19 related:
The 10% early distribution penalty will not apply for 2020
You may also opt to pay the general income tax because of your corona virus-related distribution over the next 3 years, or you can pay it in 2020. (Basically, if you had a distribution of $9000, you may choose to have $3000 reported as income in 2020, 2021, and 2022)
If you have other questions regarding your retirement plans, we recommend speaking with your financial advisor.
If you have a dependent that is a student, that also files a tax return, make sure they mark their return that they CAN be claimed as a dependent on another’s return. If they don’t, you will not be able to claim the student, or the credits that go along with them.
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
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.
You will receive a form – Notice 1444 from the IRS stating what you received for stimulus payments in 2020. If you did not get the amount you should have gotten, either too little or too much; this will be adjusted on your 2020 tax return, depending on IRS instructions still being drafted.
Minnesota and Wisconsin
There are no significant changes to the MN or WI returns for 2020.
Due to the extra items involved with the 2020 taxes, we will be increasing our base price by $5 per filing location, so Federal and one State will now start at $150.
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 $75 per hour in addition to the cost of the tax return.
Tax Planning for 2021, and beyond, will also be billed out at $75/hour.
If we need to make a call to the IRS on your behalf, this could also result in a $75/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.
Start of IRS e-file acceptance: Late January 2021
Federal/State 2020 filing deadline - Businesses: Monday March 15, 2021
Federal/State 2020 filing deadline - 1040: Thursday, April 15, 2021
Non-Profits (990): Friday May 17, 2021
Quarter 1 (Jan, Feb, Mar) April 15, 2021
Quarter 2 (Apr, May) June 15, 2021
Quarter 3 (Jun, Jul, Aug) September 15, 2021
Quarter 4 (Sept, Oct, Nov, Dec) January 15, 2022
**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**
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 $15 as a thank you.
Because of the disruption that COVID-19 caused during the last tax season, referral letters did not get mailed out like they normally would. Rest assured; these discounts will be honored. We do have notes in everyone’s file but if you do not receive the letter we normally send out, and did refer someone for their 2019 tax return, please let your preparer know so that we can apply the discount for you.
Sincerely, Deni Sheri Dani DJ DiDi
Beginning January 1, 2020, Minnesota will have an increase in the minimum wage.
* Large employers (gross revenues of $500K and more) must pay at least $10/hour
* Small employers (gross revenues less than $500K) must pay at least $8.15/hour
* The training wage, $8.15/hour, may be paid to employees younger than 20 years of age for the first 90 consecutive days of employment.
* The youth wage rate, $8.15/hour, may be paid to employees younger than 18 years of age.
As of October 1, 2019, Duluth will have an increase in the City percentage of the sales tax rate. It will be increased from 1% to 1.5%.
Regular sales tax will increase from 8.375% to 8.875%
Restaurant (food) rate will increase from 10.625% to 11.125%
Restaurant (alcohol) rate will increase from 13.125% to 13.625%
If you use Square or any other mobile app that includes sales tax, remember to make adjustments to the settings.
Here is a reminder from MN Dept of Revenue regarding scam calls.
Protect yourself from tax scamsMinnesota Department of Revenue sent this bulletin at 12/10/2018 01:32 PM CST
As the income tax filing season approaches, the Minnesota Department of Revenue warns you to beware of scams attempting to steal your personal information.
What do I need to know?
Individuals or organizations may falsely represent themselves as being from the department. Use caution and never provide personal information unless you are sure the situation is legitimate.
When we contact you by phone, mail, or email, we will never:
What if I receive a suspicious phone call or letter?
If you are concerned about a possibly fraudulent contact from someone claiming to be from the department, call us at 651-296-3781 or 1-800-652-9094 (toll-free). We can determine if the contact you received was legitimate.
What if I receive a suspicious email?
We will never ask you to provide, update, or verify personal information if you did not previously email us. Do not respond to such emails, and contact us with questions or concerns.
Phishing (as in “fishing for information” and “hooking” victims) is a scam involving emails sent to trick you into revealing personal and financial information. When you send scammers this information, they can use it to steal your identity.
Our professionals are here to serve you and offer advise on your tax and small business financial needs.