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February 11, 2022

Tax return due dates:

  • Individuals must file returns by April 18, 2022, for the 2021 tax year;
  • Partnerships must file returns by the 15th day of the third month following the close of the taxable year (March 15 for calendar-year taxpayers);
  • C corporation returns are generally due by the 15th day of the fourth month following the close of the taxable year (April 15 for calendar-year taxpayers);
  • S corporation returns will remain due by the 15th day of the third month of the taxable year (March 15 for calendar-year taxpayers); and

To our clients and future clients-

We expect a challenging 2022 tax season, filing 2021 Year tax returns by the first due date.  A myriad of factors contributing to our outlook is the dynamic factors of 2021 income tax legislation, newly introduced 2021 tax forms, the relevant government agency’s delayed approval of said tax forms, the timeliness of the tax software to integrate approved legislation, tax forms and instructions, tax analysis and interpretation.  

The above delays our tax software provider to apply revisions to tax forms and analysis within their tax framework and to the related newly introduced tax form(s). For example,  some  2021 tax forms are not yet approved for release by the relevant government agency at this time of this posting.

We expect the review of 2021 tax returns will be more time intensive due to these challenges.  

We appreciate your patience, sincerely,

 

Tong & Fong CPAs

 

January 10, 2022

 Information to provide by our 2021 Individual Tax Return clients: 

  1. IRS Notice 1444-C and information regarding the amount of the third stimulus check.
  2. IRS Letter 6419 and information regarding the amount of Advanced Child Tax Credit payments received.
  3. 1099-Ks for merchant charges. Reconcile amounts on 1099s to amounts reported by the client for Schedules C or E (or business entity return).
  4. 1099-Bs for sales of stock or securities. Reconcile amounts on 1099s to amounts shown on client reports, if any.
  5. Property tax statements: Look at property tax bills and estimate of value of real property in California to verify that the county has properly computed tax based on reduced property values.
  6. Property tax statements: Look for items that are not deductible as property taxes, such as HERO or PACE payments.
  7. Review government documents (W-2s, 1099s) for federal/California differences. Also be sure to review government documents for accurate taxpayer identification numbers.
  8. Paycheck stubs to review withholding and to provide to the FTB if withholding amount is reduced.
  9. Statements and instructions from mutual fund companies breaking down U.S. government and state tax-exempt income information.
  10. All tax information broken out separately for both members of a registered domestic partnership. 11. Notices, bills, etc., from the IRS or California.
  11. New clients should bring the past two years’ returns. May request prior years at our discretion
  12. For the Child and Dependent Care Expenses Credit: • Nontaxable funds received, including child support and public assistance; • Percentage of time the qualifying dependent lives in the California home of the taxpayer; • Address, telephone number, and Social Security number or Employer Identification Number of the care providers; • Expenses paid to California providers; and • Nonresident military spouse’s military income.
  13. California K-1 and accompanying correspondence (check for California differences and possible state tax paid by S corporation, partnership, trust, or LLC).
  14. Withholding paid through escrow on sales of property reported on FTB Form 593-B and closing statements. Keep a copy of the escrow closing statement and Form 593-B.
  15. Withholding for residents and nonresidents reported on FTB Form 592-B.
  16. Invoices from purchases made over the Internet, by mail, or by phone order where no California sales or use tax was paid (or, if the use tax table amount is used, only individual purchases of more than $1,000.
  17. Any activity pertaining to a Health Savings Account, including contributions to, earnings or losses from, distributions from, and rollovers to that account.
  18. Rollover or distribution amounts from Medical Savings Accounts, FSAs, HRAs, and Roth IRA conversions.
  19. Did the taxpayer form a business entity this year, does the taxpayer own an inactive business, or does he or she plan to terminate a business this year?
  20. Change of ownership of business entity.
  21. Title change information for property that changed hands due to gift or death of an owner. 2021/2022
  22. For employers with no more than 25 full-time equivalent employees, review for possible federal Health Insurance Credit. If credit is taken, there will be a federal/California difference in the expense amount for employee health insurance.
  23. For Schedule C and other business returns, alert the taxpayer of the requirement for a city business license.
  24. Identity Protection PIN (IP PIN): If you received a CP101A Notice from the IRS in January, your IP PIN is located in the left column. Please provide a copy of this letter.
  25. For all documents, please provide a scan, photocopy, or fax. Do not send photos taken with a cell phone.
  26. Foreign bank accounts and investments,  - provide highest balance valued in US dollarrs during year in foreign bank account(s).  Foreign Investments - provide highest value during year.  Your information share will determine if it is relevant to request for more information.
  27. Crypto and Virtual Currency is considered property for federal tax purposes.  More on tax recognition and treatment of Crypto currency transactions found here:    https://www.irs.gov/newsroom/virtual-currency-irs-issues-additional-guidance-on-tax-treatment-and-reminds-taxpayers-of-reporting-obligations.

Our office is open but due to covid, we are not accepting face to face meetings at this time.   

Encourage communication to our office via phone, email, fax, and written correspondence.

Our office is receiving mail, 3rd party delivery services, and clients may drop off packages at our socially distanced table within our reception area.

We do expect masks to be worn by all visitors to our office.

Good health to all


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