Tax Time is Nearly Here, Have You Filed Yet?

Keniesha Ingram, owner and operator of First Line Tax Pros. 

 

With more than 10 years of tax experience Keniesha Ingram, owner and operator of First Line Tax Pros, is helping Detroiters prepare for tax season. As the IRS advises filers to get their taxes done early, Ingram believes the emphasis should be on filing correctly. With new rules and additional federal funds tax season is heating up.  

 

The federal government provided billions of dollars in aid during the pandemic. One such assistance, the Paycheck Protection Program, issued more than $24 billion in Michigan for small business owners in 2021. While this does not have to be claimed on this year’s taxes, the IRS wants to know what the funds were used for. Though the funds did not have to be spent in one calendar year, tax preparers are encouraging an accurate account of expenditures.  

 

“The PPP, that is not taxable. You don’t have to claim the income on your taxes, but you do have to claim the expenses. If you spent it on whatever you spent it on for your business, that should be reflected on your taxes,” said Ingram. “Even if you didn’t spend all of it, whatever you spent during the time should be on your tax return versus just not reporting at all.” 

 

Entrepreneurship has ramped up in recent years. The pandemic provided a necessary push for those looking to pursue their dreams. The Paycheck Protection Program was in play to give vital assistance to struggling businesses. As a result, more entrepreneurs are filing business as well as personal tax returns. 

 

“If you have a business, make sure you’re keeping your records intact. If you did take out the PPP loan, keep up with the records of what you spent the money on because the IRS sees all. Whatever you think they don’t see, they see it. If you think you’re trying to undermine them or underhand them, they see you and they know,” said Ingram.  

 

The Child Tax Credit was granted to parents as a way to provide much-needed family assistance during the pandemic. Under President Biden’s American Rescue Plan of 2021, families were given an allowance of $3,000 per child under the age of 18 and $3,600 for children younger than six. These funds must be claimed during the tax filing. Parents of children born later in 2021 will be able to recoup the amount for their tax credit.  

 

“The IRS is sending everyone a form; it’s called Form 6419 and it has the exact amount that the IRS gave you during that time and the exact dependent the claim is for,” said Ingram. “If a parent had a child in June of last year, that child would not have gotten included in that account for the child tax credit.” 

 

Economically, the pandemic caused financial hardships for families and individuals across the country. Those who lost their jobs were in financial limbo and unemployment benefits dished out a record amount of financial assistance due to job loss and severe reduction of hours. Funds received via the unemployment insurance must be filed or you risk penalties including delays on returns.  

 

“Unemployment. A lot of people think that because last year the IRS was forgiving $10,000 of unemployment that you don’t have to report it. But that’s still taxable income. If you discard that or try to leave it out, they’re still going to try to count that towards you,” said Ingram.  

 

Those hoping to beat the rush are encouraged to have all documents needed and process their taxes online. Delays in the mailing system could potentially prevent tax returns from reaching the IRS in a timely fashion.  

 

“E-filing is way quicker because it’s instantly sent to the IRS. When you file by mail, it can take up to 10 weeks. Just imagine, it’s going into a mailroom, they have to open it, they have to process it, so it takes a longer time than e-filing,” said Ingram.  

 

The deadline to file taxes this year is April 18.  

 

 

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