Help yourself (and us!) make tax preparation easier by using these handy Checklists to pull together your tax materials for 2021. With another year of tax law changes and new programs, these Checklists will ensure you’ve got everything you need to file.
Venmo, PayPal and Cash App to Begin Reporting Payments of $600+
If you rely on payment apps like Venmo, PayPal and Cash App for your business, you should be aware of a new tax law that took effect this year. Third-party payment processors will now report your business transactions to the IRS if they exceed $600 for the year — and send you a Form 1099-K with this information. (Previously they were required to send you Form 1099-K if your gross income exceeded $20,000 or you had 200 separate transactions within a calendar year.)
The new rule applies to payments for goods and services transactions — NOT for personal payments to your roommate for rent, for example, or to a friend when splitting dinner costs.
Note that you should already be reporting income over $600 to the IRS on your 1040, whether or not you receive a Form 1099-K. This new rule just means the IRS will be able to cross-reference the amounts beginning with your 2022 tax return.
Use ID.me for Easy IRS Access
The IRS is now using ID.me to help ensure the privacy and confidentiality of your information when using IRS tools, including:
- Child Tax Credit Update Portal,
- Online Account,
- Get Transcript Online,
- Get an Identity Protection PIN,
- Online Payment Agreement,
- And other tools to be announced.
If you already have an IRS user name, you may continue to use your existing credentials to sign-in — but you will be prompted to create an ID.me account for future access. To verify your identity with ID.me, you’ll need to provide a photo of an identity document, such as your driver’s license, state ID or passport. You’ll also need to take a selfie with a smartphone or a computer webcam. Once your identity is verified, you can securely and easily access IRS online services.
Tax Filing Begins Jan. 24
The IRS will begin accepting and processing 2021 tax year returns beginning next Monday, January 24. The IRS urges you to file electronically to speed processing and refunds — most people receive their refund within 21 days when they use direct deposit.
Note that the tax filing deadline will be April 18 — for both federal and Georgia income taxes. The due date is April 18 instead of April 15 because of the Emancipation Day holiday in the District of Columbia. If you request an extension, you will have until Monday, October 17, 2022, to file.
Money Brief: Report Virtual Currency Transactions
If you received, sold, exchanged or otherwise disposed of any financial interest in virtual currency — like Bitcoin — you’ll need to provide us with that information so it can be included on your Form 1040.
Money Brief: UGA Business Webinars
UGA’s Small Business Development Center offers a wide variety of online training programs to help new business owners, such as “Writing a Business Plan,” “QuickBooks” and “Hiring to Win.” Register today to learn more about operating your small business.