Dear Clients…

As the year winds down, the tax reporting forms begin to arrive and we want to remind you which ones we need you to accumulate and send to us with your tax information. First, there are a couple of new forms this year that most people will see, and which we need you to provide to us:

__ IRS Notice 1444-C for the 2021 stimulus check; and
__ IRS Letter 6419 for those folks that received the advance child credit.

Speaking of the advanced child credit, if you received it in advance, please understand that your refund this year may be greatly reduced!

We still need the annual information forms that are sent to you for tax purposes. As a reminder, here is a simple checklist:

__ W-2 for wages __ W-2G for gambling __ 1099-Int for interest
__ 1099-DIV for dividends __ 1099-B Brokerage __ SSA-1099 Social Security
__ 1099-NEC for income __ 1099-Misc for income __1099-K for income
__ 1099-R for retirement __ 1099-G for refunds & unemployment
__ 1099-Int for mortgages __ 1098-T for tuition __ 1099-SA for HSA’s
__ K-1 forms from investments in S corporations or partnerships
__ Form 5498 for IRA values __ IRA and Roth IRA contributions for 2021

__ Child care costs, and the name, address, amount, and ID # of the recipient
__ Charitable donations-total amounts and recipients
__ Property tax paid on your home, property, or cars
__ Estimated tax payments and dates
__ Any letters you received from the IRS or state tax authorities
__ Our engagement letter

If you have a small business or rental property we can provide you with a separate checklist for those activities if needed.

Again, IRS scrutiny of foreign accounts means that you need to be absolutely clear about any non-US accounts or income so that we report it correctly.

If you have bought and/or sold a home in 2021 we need the closing statements on both purchases and sales.

Finally, in some tentative year-end planning, we are reasonably certain that Federal income tax rates will increase in 2022, so tax deductions will be more valuable next year vs. this year, and if you have any control over year-end bonuses it would be wise to call us and see if they would be better to receive them before the end of 2021 or wait until 2022.

Every year we are reminded how much we value your business, and we want to once again say thank you. Please call us with any questions.

Your Accountants

Achieving a Better Life Experience Accounts: A financial solution for people with disabilities

Achieving a Better Life Experience (ABLE) accounts are tax-advantaged savings accounts for people who have disabilities and their family members. These accounts are useful to assist people with disabilities pay qualified disability-related expenses without affecting their eligibility for government assistance programs. Distributions are tax-free if used for qualified disability expenses.

The annual contribution limit is $15,000 in 2021. Certain employed ABLE accounts may make additional contributions up to either the designated beneficiary’s compensation for that tax year or the poverty line for a household of one person. The poverty line for 2021 is $12,880 in the continental US, $16,090 in Alaska, and $14,820 in Hawaii.

Some designated beneficiaries may be eligible to claim the saver’s credit for a percentage of their contributions. The beneficiary can claim said credit on Form 8880 (linked at the bottom). The saver’s credit is non-refundable and available to individuals who meet the following requirements: at least 18 years of age, not a dependent or a full-time student, and can meet the income requirements.

Families may rollover funds from a 529 plan to another family member’s ABLE account. Although, the ABLE account must be for the same beneficiary as the 529 account or for a member of the same family as the account holder. Rollovers from a section 529 plan count toward the annual contribution limit.

States can offer ABLE accounts to help people who become disabled before the age of 26 or their families pay for disability-related expenses. Some expenses may include transportation, housing, and/or education. These contributions are not deductible for federal tax purposes. Distributions, including earnings, are tax-free to the beneficiary if they are used to pay for qualified disability expenses.

Form 8880:–dft.pdf
Distributions From ABLE Accounts and ABLE Account Contribution Information form instructions: