IT has come to my attention that several qualified taxpayers – by either lapse of memory or for some unexplainable reasons – don’t realize that they already received their Economic Impact Payment or the Recovery Rebate Credit otherwise known as stimulus refund amounting to $1,400 under the American Rescue Plan Act (ARP) of the Biden Administration in 2021
This refund either came in the form of IRS check, debit card or was directly deposited to taxpayer’s bank account. Even after interviewing them, they insisted that they never received this amount. Thereafter, they complained that after a couple of months, their refunds have not yet been received. After a thorough searching on their bank statement, only then did they realize that they actually received it. Of course, the delay of their refund is inevitable. The Internal Revenue Service had to adjust their refunds minus the $1,400 for single filers or $2,800 for married filing jointly. I advise them to check their bank deposits for proofs or accuracy.
* Unknown to many, if you bought an electric or plug-in car in 2021, car buyers of this model can get a credit rebate of $7,500. This is so-called Alternative Motor Vehicle Credit (Tax Code 8910). Just inform your tax preparer so it can be inputted under Credit Menu. Just provide the year, make and model of the vehicle. This is a large sum of money. It is an incentive coming on the heels of rising gas not only this year but in previous years.
* It is interesting to note that more often than not, our Social Security pension benefit is not taxable. However, if married filing jointly have high income and high tax rate, a portion of this benefit is taxable.
* If you are providing care to a handicapped child or an elderly parent and received the Form W-2 under that person as an employer and you as an employee, this income is non-taxable.
* I advise my clients to monitor and keep their receipts or records of deductible items especially if they are in high income bracket but filing on an itemized deductions like out of pocket or co-pay doctor’s visits, prescription medications, church tithings, charitable donations, car registration renewals. Everything counts nowadays. Don’t rely on your memory.
* Those with high medical expenses can deduct only certain expenses that exceed 7.5% of their Adjusted Gross Income (AGI).
* When you install a solar panel on your roof to save on electricity, it is tax deductible. Make sure that the credit rebate that you received doesn’t go to sellers of this energy solar panels. There are unscrupulous salesmen out there who take advantage of gullible buyers.
* There are times that financial institutions don’t specify all the details on statement sent to shareholders. I advise taxpayers to provide complete information like the date they acquired their shares of stocks, the original cost, and the date and price they sold them. This will determine the capital gains which are taxable. Otherwise, you’ll pay more taxes on your capital gains.
And don’t forget. If you have gambling winnings, better report them. Casinos provide the IRS your information.
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The opinions, beliefs and viewpoints expressed by the author do not necessarily reflect the opinions, beliefs and viewpoints of the Asian Journal, its management, editorial board and staff.
Should you have some questions, please don’t hesitate to write or call me at 562-508-8099 or email me at [email protected].
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The author wear several hats. He was a retired tax collector with a government revenue agency, a lifelong journalist, community leader, tax practitioner (income, sales tax and non-profit organizations), business consultant and motivational speaker based in Cerritos, California.
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