Hi!
There is an important deadline approaching & it has to do with prior year refunds.
Main points:
- The IRS has a 3-year statute of limitations on tax refunds, which normally would expire as of last month
- However, due to covid response, the IRS delayed the 2020 deadline to May 17th
- This gives us a few more weeks this year to obtain a refund for 2020 – after this date, the statute of limitations is over & the IRS keeps the refund
- There are $1 billion dollars of such refunds that the IRS is holding & set to become theirs to keep on the May 17th date
Action items: 🎬
Review your 2020 returns now to determine if you are eligible for a refund. Some common omissions or mistakes to look out for:
- Deductions that were not taken, such as childcare, crypto losses, work-from-home deductions related to any contract/1099 income, the list is endless
- Double paying on RSU/ESPP/NSO equity (we see this on a regular basis)
- Double paying state taxes for years of a move or years where you worked/lived between states
- Filing a return with a high net income to qualify for a loan but then realizing that you could have saved on tax
- Filing a business or freelance return in a rush without an optimized strategy or learning what deductions you qualify for in the first place
- Many, many other situations
Timing:
- Please do this now – do not wait until this deadline. We are contacted each year on the week of the statute of limitations deadline by a panicked taxpayer that needs this, and at that point, there is often no time to react
- Most accounting firms at this point in the season are busy with extensions and will be on a well-deserved vacation soon, so this week is the time to reserve an appointment to review your return
- If you already know you need an amendment, let us know this week, as well
- If you have any questions about this or want to get in touch, just hit “reply” to this email and send me a message
I hope this was helpful news! We spend all week thinking of the most valuable update that can help you optimize your tax profile, so if you have any specific questions or other topics to discuss, just reply to this email & we will help.
–
George Dimov CPA
www.dimovtax.com
(833) 829-1120 toll free
