Refunds for Unemployment Exclusion & IRA Contribution Due Date

Refunds for Unemployment Exclusion & IRA Contribution Due Date

IRS Refunds for Unemployment Exclusion


On March 31, 2021, the IRS announced that it will begin sending refunds to taxpayers who received unemployment benefits and are eligible for the exclusion on up to $10,200 of benefits but who filed their tax return before the recent changes made by the American Rescue Plan.

They indicated that these refunds will occur in the spring and summer, starting in May 2021. 

They explained that for taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax.  Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.

The IRS also indicated that it will first process refunds for taxpayers who are eligible for the up to $10,200 exclusion.  It will then process refunds for married couples who each received unemployment compensation where the couple can exclude up to a combined $20,400 (but not more than $10,200 for each spouse).



IRA Contribution Due Date


The IRS announced that the due date to contribute to an IRA for the 2020 tax year is May 17, 2021, matching the filing due date. 

The later due date also applies for contributions for health savings accounts.

The due date for making first quarter estimated taxes for the 2021 tax year remains April 15, 2021.


Source: M + O = CPE

Using A Portal For Document Exchange

Using A Portal For Document Exchange

Throughout the year, and especially at this time of year, tax preparers are exchanging documents with clients on a daily basis which is why it is vital to keep such document exchanges secure.  Most of these documents include very sensitive information, making it imperative that as their accountants, we do the due diligence necessary to secure their information.

Text messages or an email attachment that is not encrypted with a password is extremely vulnerable to interception by identity thieves.  Since many of our clients do not think about the need for such encryption or may not have the capability to create such encryption, it is vital for us to offer a secure and simple method for our clients to send sensitive items, such as driver license images and other documents that contain Social Security numbers and similar information.

It’s important that we provide a secure portal to allow clients to upload and send scans or pictures of sensitive tax information and documents because the secure portal uses encryption to protect files that are uploaded to and downloaded from it.

If you already have tax software, a secure portal might already be available or part of the purchase of the annual tax software.  For example, Intuit offers a secure portal as part of the purchase of the ProSeries and Lacerte packages.

If you do not have a secure portal available as part of the purchase of tax software, there are stand-alone secure portal providers, such as CCH Axcess Portal, Secure File Pro and Citrix ShareFile.

You and your clients deserve the peace of mind that comes with using a secure portal for document exchange.


Source: M + O = CPE

The Alchemy of Stress

The Alchemy of Stress

As accountants and moms, we are all under a good deal of stress these days.

Whether it’s due to work deadlines, health concerns, children’s schedules or a host of many other reasons, stress seems to be a daily companion for a lot of us.

Right now, it feels like there’s not much that we can do, about a lot of things.

As moms, that lack of a sense of control can be so overwhelming that it often seems that we are like pots of bubbling stress, about to boil over.

But what if, instead of judging ourselves for the amount of stress we are experiencing or trying to remove our stress, we use it, instead of it using us?

What if we chose to use the energy of stress, instead of being at the mercy of it?

Just like a pot of boiling water on the stove can scald you and hurt you, or it can make pasta and feed you, stress can be used for good as well.

As the term alchemy often refers to the process of turning base metals into gold, we also can turn stress into productivity.

Instead of adding self-judgement on top of our stress, or trying to escape with food, alcohol or Netflix, it might be time to use the energy of stress to take some action.

Instead of curling up into a ball on the couch, maybe it’s time to dust off that bike and burn off that stress energy.

If you’re anything like me, there’s probably quite a few kitchen cabinets and drawers whose contents could be cut in half.

Maybe you’ve also got a large bag of paper in your home office just waiting to be shredded.

I’ve got two dogs that would love to help me burn off some stress with some long walks.

The best part is that the “gold” after you’ve processed stress, will pay dividends in the form of cardio exercise, less clutter, and a better sense of control over what’s controllable.


Now it’s your turn – what could you do this week to use stress, instead of it using you?  What actions could you take that will pay dividends in the weeks to come?

If you just can’t decrease your stress right now, then the next best thing is to put it to good use.

One of the Best Time Saving Strategies

One of the Best Time Saving Strategies

Doesn’t it seem like time is flying by when you look at your children and how fast they’re growing?

But then it seems like time is slowly dragging when you’re working and you just want to get everything done.

The most valuable asset you have as a working mom is time, but unfortunately so many of us feel like time is just slipping away and that we have no control over it.

That there just isn’t enough time in order to get what we need to get done, to have free time for ourselves, as well as quality time with our families.

If you struggle with time, you’re not alone.

Most accountant moms are struggling with managing their time and finding time to do all the things they have on their ever-growing to-do lists.

In order to make more time, you have to get a handle on one of the biggest time sucks – indecision.

One of the best time saving strategies I know is making swift decisions and honoring those decisions.

We burn up WAY too much of our time in indecision.

If time were physically like 100 dollar bills, indecision would be like carelessly tossing thousands of dollars into the air.

Indecision just wastes so much time and money.

What typically happens is that you put off making a decision and waste time thinking about it, worrying, fretting, going back and forth about it.

Then wind up eventually making the decision in an instant a week or so later.

That’s always an option OR you can make a decision now and not change your mind.

You can save time by making decisions swiftly, honoring them and moving forward. In order to save a lot of time, I suggest you make a decision, take 5 steps forward, make another decision, take 5 steps forward, rinse and repeat.

If you want to save time, don’t second guess yourself; have your own back on your decisions.

Give yourself permission to believe that there is no such thing as a “good” or “bad” decision.

What do you want to do with your time? 

Make a decision and honor that decision no matter what.

That’s how you save time.


Now it’s your turn – what decisions haven’t been made, that are wasting a lot of your time in indecision and worry?  Give yourself by the end of today to make a decision and also decide to honor that decision. 

Now have fun with the extra time you saved.

More Unemployment Updates

More Unemployment Updates

IRS Updates Unemployment Exclusion Threshold


As discussed in our previous blog, the American Rescue Plan, which was enacted on March 11, 2021 provides a retroactive exclusion for unemployment benefits received during 2020 (up to $10,200 per taxpayer). This exclusion is available for taxpayers with adjusted gross income of under $150,000.

In its original guidance, the IRS indicated that, when computing income for the purpose of this threshold, all unemployment benefits received (before applying the exclusion) had to be included.

As of March 23, 2021, the IRS website has revised guidance indicating that the unemployment received by a taxpayer is not included when determining if a taxpayer’s income is under the $150,000 threshold. This change will make the exclusion available to more taxpayers.

Depending on the states you’re filing in, many have been silent about the federal exclusion and its effects on state income tax returns. Preparers should consider waiting to finalize returns for clients who received unemployment compensation to see if the applicable states provide any guidance or comment.


Kiddie Tax and Unemployment Benefits


For younger taxpayers who are subject to the kiddie tax, unemployment benefits in excess of the $10,200 exclusion received by the child are treated as unearned income for the purpose of the kiddie tax, and the kiddie tax applies to such benefits.

The kiddie tax is computed on Form 8615, and it can apply to children under the age of 24 who are full-time students.


Source: M + O = CPE

IRS Guidance On Unemployment Benefits Exclusion

IRS Guidance On Unemployment Benefits Exclusion

As we shared in last week’s blog, the American Rescue Plan, which was enacted on March 11, 2021 provides a retroactive exclusion for unemployment benefits received during 2020 (up to $10,200 per taxpayer).

The exclusion is available for taxpayers with adjusted gross income of under $150,000.  When computing income for the purpose of this threshold, include all unemployment benefits received (before applying the exclusion).

The IRS recently released updated instructions for Form 1040, indicating that the full amount of unemployment benefits will still be reported on the line for unemployment compensation, which is line 7 of Schedule 1 of Form 1040, Additional Income and Adjustments to Income.  The exclusion of unemployment benefits will be separately reported on line 8, for other income, and it will be shown as a negative amount marked with the code “UCE” for unemployment compensation exclusion. 

It will take time before tax software is updated to reflect this change, and it will also take time before we know if states will conform to the federal exclusion.  In the meantime, practitioners should consider putting affected clients on extension. 

The Commissioner of the IRS announced on March 18, 2021 that the IRS is planning to automatically refund overpayments for taxpayers who received unemployment compensation and who filed their 2020 income tax returns before the enactment of the law that provides a retroactive exclusion of up to $10,200 on unemployment compensation for the 2020 tax year.  Under this approach, affected taxpayers will not have to file amended 2020 income tax returns to receive the benefit of this retroactive exclusion

The IRS revision to the 1040 instructions is available at: