Timely Tips for Income Tax Season

Timely Tips for Income Tax Season

Friday, February 12, 2021 opens the 2021 income tax filing season. Getting your income tax information together will help you file a complete, correct, and timely income tax return.

Things to know:

  • 2020 return is filed in 2021
  • As of now, April 15, 2021 is still the filing deadline
    • File on time or file for an extension to avoid paying a penalty for failing to file on time.
    • If you are owed a refund, you have up to 3 years to file and receive the money.

Coronavirus and Taxes

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) authorized the IRS to issue Economic Impact Payments (EIPs)

  • EIP1: $1,200 to most U.S. citizens and residents and up to $2,400 for married couples who file a joint return plus $500 per qualifying child.
  • EIP2: $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child.
  • Generally, if you have an adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above these amounts, the payment amount is reduced.

On the 2020 Form 1040 (individual income tax return), taxpayers are asked about these monies. Did you get them and how much? Be aware that these funds were disbursed in different ways: paper check, direct deposit, and debit cards. Many people also received a notice 1444 A or B explaining these monies; many did not. It is important to familiarize yourself about the Economic Impact Payments (EIPs) and know the exact amount you received. (If you didn’t receive the funds, ask yourself these questions: Have you filed an individual income tax return in previous years? Have you moved/changed bank accounts since filing last?)

Remember, putting incorrect information on the tax return might mean a lengthy delay or alter the size of refunds/payments!

Know, too, that after October 15, 2020, the only way to claim your EIP will be to file a federal income tax return. If you did not file a 2019 tax return in 2020, you may instead be able to claim a recovery rebate credit when you file your 2020 federal income tax return in 2021.

People can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only, on IRS.gov or calling the IRS hotline @ 800-919-9835.

IRS: 2021 Filing Season Begins February 12

IRS: 2021 Filing Season Begins February 12

Taxes, without a doubt, conjure up emotions from elation to dread! Do you owe? Are you getting a refund? Are you uncertain?

 

This is a significant statement because income tax returns cannot be filed electronically or by mail until the IRS has opened the season.

Please, do not be influenced to apply for a tax refund loan, typically known as a RAL (refund anticipation loan), if you are not in a crisis for the money. An RAL is a loan based on the anticipated amount of your federal income tax refund. Many tax filing services will offer you a RAL if… you file with their service. Your loan amount will be the value of your anticipated refund minus fees and/or interest charges.

Know, too, that your loan will go directly to the lender once the IRS processes your income tax return.

Be VERY careful with refund anticipation loans. An obvious positive attribute of the loan is you get money quickly – before the season even opens. Another, once the lender receives your refund, the loan is paid. But, what happens if your tax refund is smaller than the anticipated income tax return? You now will have an outstanding loan that will need to be paid back.

The Earned Income Tax Credit (EIC or EITC) is a refundable tax credit for low- and moderate-income workers. For 2020, the earned income tax credit ranges from $538 to $6,660. The amount depends on income and number of children; people without kids can qualify, too.

If you qualify for the EITC, you need to know, by law, the IRS cannot issue refunds for people claiming the EITC or the Additional Child Tax Credit (ACTC) before mid-February. The IRS cannot release these refunds before February 15, but the IRS is saying to expect your refund by the first week of March. Note, too, the law requires the IRS to hold the entire refund − even the portion not associated with the EITC or ACTC. This law change, which took effect in 2017, helps ensure that taxpayers receive the refund they are due by giving the IRS more time to detect and prevent fraud. 

Now, while waiting for the tax filing season to open, is a great time to get income tax documents together. Once the filing season opens, being organized and prepared will help facilitate a seamless transition to filing your income tax return. The IRS recommends that taxpayers file their returns electronically to reduce errors and receive refunds more quickly.

Filing an average income tax form is also easy. There are many FREE income tax filing sites.

Income $72,000 and below: Contact your local UF/IFAS Extension office and they can help you by:

  • Finding FREE federal tax filing on an IRS partner site
  • Finding guided preparation – simply answer questions
  • Providing a link to a FREE Facilitated Self-Assisted (FSA) service with electronic forms you fill out and file yourself

Income above $72,000: Contact your local UF/IFAS Extension office and they can help you by:

  • Providing a link to a FREE Facilitated Self-Assisted (FSA) service with electronic forms you fill out and file yourself
  • Helping you learn how to prepare papers for meeting with a tax professional
  • Providing you with basic tax preparation information

Be careful in your decision making when it comes to filing income taxes. Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a timely refund. It is amazing to know the IRS issues more than 9 out of 10 refunds in less than 21 days.

Source: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free#what

 

Be Aware of Spending Temptations and Triggers

Be Aware of Spending Temptations and Triggers

 

Fall is in the air! In addition to the crisp, cool weather comes the season of two of the top consumer spending events: Halloween and the winter holidays.

black and white receipts

Receipts add up quickly
Photo Source: Heidi Copeland

In 2019, according to the National Retail Federation’s annual survey, U.S. consumers spent $2.6 billion on Halloween candy alone, about $25 per person. This does not even take into consideration all the other bits and pieces that can go into more elaborate Halloween celebrations: decorations, entertainment and activities, costumes (for kids, adults, and animals), cosmetics, food and drink, and even stationery such as cards and party invitations. Overall, Halloween retail spending was estimated at $8.8 billion in 2019.

Next in line are the winter holidays. These include Thanksgiving, Black Friday, Small Business Saturday, Cyber Monday, Super Saturday, and Christmas. Even with the Covid-19 quarantine, consumers are on track to start the 2020 seasonal spending spike. For many, Covid-19 has provided a state of anxiety, isolation and uncertainty. The upcoming seasonal events can be a big boost in providing a bit of nostalgia, normalcy and fun.

It is important, however, to heed the words of The Cat in the Hat: It’s fun to have fun, but you have to know how!

The truth is the US economy thrives on consumer spending! But, be honest, does derailing your budget for stuff you might have to pay for later really make you feel better? Seasonal spending is the type of spending that can lead families into the New Year with stress and anxiety. Be aware of spending temptations and triggers.

Wikipedia defines temptation as a desire to engage in short-term urges for enjoyment. Anything that promises pleasure can be tempting. Triggers are a stimulus that alerts your brain and body to an old, known experience, which makes it more likely that we will engage and buy something.

For example, a trigger could be a smell. You might think, “I smell cinnamon. Cinnamon reminds me of fall at grandma’s. Her house always smelled like cinnamon.” The temptation would then be: “Cinnamon brooms are at the check-out cashier. I think I will buy one.”

Recognize what sets you up – smells, prices, product placement, etc. There is a method behind the madness of marketing, all of which is geared to attract a consumer to make a purchase. This year especially, anything that offers nostalgia, normalcy, or fun will be a hot commodity.

Knowing your values and goals, and creating a plan for spending (budget), will help you organize your spending. Know, too, it is reasonable to spend money on fun stuff this season of spending.  But also remember: happiness is a sense of well-being, joy, or contentment. It is very hard to buy that!

Pantry Pests

Pantry Pests

Ugh!

Have you ever taken something out of your pantry or cupboard to find the item teeming with pests? I have and it is NOT a good feeling! Recently, I attempted to use raw almonds I had stored in a sealed plastic bag only to discover worms! Yes, worms! Then, upon careful inspection, a few moths! Not only did it ruin my meal plan, it ruined my appetite for almonds!

On the bright side, it forced me to clean out my pantry. I emptied the shelves. I took EVERYTHING out and inspected both the shelving and the food packages/containers. I removed the shelves, vacuumed all the cracks and crevices, washed everything down and used a fan to ensure dry, future pest-free storage. I was lucky; my infestation was limited to a bag of raw almonds purchased a few weeks prior.

Inspect all pantry items before putting them away to eliminate pests. Photo source: Heidi Copeland

However, I learned that almonds could be the harbinger of a moth. And, as you probably know, moths do not actually start out as a moth but as an egg. In nature, the moth lays an egg and the egg hatches to a larva (caterpillar). Upon maturation, the larva forms its pupa (cocoon) and from the pupa emerges the adult moth, only to start the whole cycle over again! Mating and egg laying begin almost immediately after adults emerge from the pupa.

Raw almonds have NOT been heat treated, thus it is pretty common for the product to contain perhaps an element of surprise. (Note: Eating this product with the worm intact hurts nothing other than our psyche!) Although I am certain my moth was an almond moth, the Indianmeal moth has an attraction for the same pheromone (scent). Thus, after buying food, it is extremely important that ALL pantry goods be examined carefully to eliminate the next generation of adults that can fly and contribute to an infestation. EDIS publication EENY-026 Indianmeal Moth is a great publication with pictures of common hiding places. Moths in particular can be found among tree nuts, grains, cereals, spices, herbs, pasta, starches, flour, and even pet foods.

However, pantry pests are not limited to moths. EDIS publication ENY-213 Pantry and Stored Food Pests has pictures and information of the many species of stored food pests found at various times in food pantries. In fact, there is hardly a food item in the kitchen or food pantry that can escape being infested by some pest if it remains unused and exposed in some dark corner or drawer long enough.

To kill insects in infested foods, place food in an oven at 130 degrees F for 30 minutes or in the freezer at 0 degrees F for four days. If freezing, place the food item in a tightly sealed plastic bag to limit condensation on the product, which can lead to mold growth. Defrost the item in the plastic bag and use the product as soon as possible.

During Covid-19, and now hurricane season, consumers have been encouraged to have food on hand for weeks at a time. Now is a good time to take stock of the pantry and learn how to use the FIFO – first in, first out – system of product rotation. FIFO simply encourages prioritization and the use of stored items, so the oldest products are used first.

The presence of stored food pests is not an indication of uncleanliness, since an insect may be brought home in purchased food or on purchased food packages. However, it is important when purchasing any food product, to inspect your purchase to ensure you do not bring home an insect. Even one insect left alone long enough can cause an infestation.

 

Know How to be Safe, Not Sorry Regarding Household Food Safety

Know How to be Safe, Not Sorry Regarding Household Food Safety

Deep regret and guilt are feelings I experience every time I throw something  away in my pantry or refrigerator that I have not quite exhausted. What stays? What goes? Does an expiration date really tell you the WHOLE story?

According to the United States Department of Agriculture (USDA), under the jurisdiction of the Food Safety and Inspection Service (FSIS), manufacturers put dates on food products to let retail stores and consumers know how long their products are expected to be their best quality. Except for infant formula, product dating is not required by Federal regulations.

“Best By” date refers to product quality, not safety. Photo source: UF/IFAS NW District

BEST apparently has many interpretations. Food items only need to be labeled in a manner that is truthful and not misleading and in compliance with FSIS regulations.

Many factors determine these quality dates. Additionally, manufacturers and retailers follow strict procedures in the manufacturing, distribution, and storage of food products. However, there is no strict rule to dictate what BEST practices need to be followed once the food leaves the distribution chain and enters, most specifically, our homes. Because of this, food product dating errs on the side of caution.

It has been suggested that date labeling on food products results in consumer confusion and can result in the extraordinary amount of waste at both the retail and consumer level (>30%). Thus, it is important that consumers understand the dates applied to food are for quality, not for safety. The USDA even recognizes that food products are safe to consume past the date on the label, and, regardless of the date, consumers should evaluate the quality of the food product prior to its consumption.

However, it is up to the consumer to understand the significance of product dates and handle food products appropriately.

  • “Best if Used By/Before” date indicates when a product will be of best flavor or quality. It is not a purchase or safety date.
  • A“Sell-By” date tells the store how long to display the product for sale for inventory management. It is not a safety date. 
  • “Use-By” date is the last date recommended for the use of the product while at peak quality (it is not a safety date except when used on infant formula).
  • “Freeze-By”date indicates when a product should be frozen to maintain peak quality. It is not a purchase or safety date.
  • Can codes are a type of closed dating which enables the tracking of product in interstate commerce. These codes also enable manufacturers to rotate their stock and locate their products in the event of a recall. Can codes appear as a series of letters and/or numbers and refer to the date the product was canned. The codes are not meant for the consumer to interpret as a “Best if Used By” date.

Canned goods must exhibit a code or the date of canning. Cans may also display “open” or calendar dates. Usually these are “Best if Used By” dates for peak quality. Discard cans that are dented, rusted, or swollen. High-acid canned foods (e.g. tomatoes and fruits) will keep their best quality for 12 to 18 months; low-acid canned foods (e.g. meats and vegetables) will keep for two to five years.

Additional information on food canning and the handling of canned foods may be found at Shelf-Stable Food Safety.

  • Bar Codes on Food Packages are commonly referred to as Universal Product Codes (UPC) and are a type of code that appears on packages as black lines of varying widths above a series of numbers. The UPC is not required by regulation, but manufacturers print them on most product labels because scanners at supermarkets can “read” them quickly to record the price at checkout.

UPCs are also used by stores and manufacturers for inventory purposes and marketing information. When read by a computer, a UPC can reveal such specific information as the manufacturer’s name, product name, size of product, and price. The numbers are not used to identify recalled products.

  • Dates on Egg Cartons can indicate either a “Sell-By” or “Expiration” (EXP) date. It is not a federal regulation, but may be required, as defined by the egg laws in the state where the eggs are marketed. Some state egg laws do not allow the use of a “sell-by” date.

Many eggs reach stores only a few days after the hen lays them. Egg cartons with the USDA grade shield on them must display the “pack date” (the day that the eggs were washed, graded, and placed in the carton). This number is a three-digit code that represents the consecutive day of the year starting with January 1 as 001 and ending with December 31 as 365. When a “sell-by” date appears on a carton bearing the USDA grade shield, the code date may not exceed 30 days from the date of pack.

In the United States, after purchasing eggs, it is recommended to refrigerate them in their original carton and place them in the coldest part of the refrigerator, not in the door due to loss of coolness from repeated opening of the door.

The restaurant industry standard, first-in, first-out (FIFO), is also a quick and easy way for the consumer to keep track of their food freshness. FIFO simply means to use food in order of freshness dates.  Following the FIFO principle ensures foods with the shortest shelf-life get used first (a permanent marker can help, too).

Throwing something away takes little effort. However, knowing what to keep takes more than a discriminating eye and a keen sense of smell. The Kitchen Companion is a great downloadable resource and reference guide for consumers who are attempting to reduce their own kitchen waste without regret and guilt.

Learn how to be safe, not sorry, without the regret of being wasteful with food products in your home.

Sources:
https://www.fsis.usda.gov/wps/portal/fsis/topics/food-safety-education/get-answers/food-safety-fact-sheets

https://www.fsis.usda.gov/wps/wcm/connect/6c55c954-20a8-46fd-b617-ecffb4449062/Kitchen_Companion_Single.pdf?MOD=AJPERES