Tax Updates End of March

Protect Personal Information

The IRS is urging people to stay vigilant in securing their online devices against online scams. Taxpayers and tax professionals can help protect against identity theft and other fraud by safeguarding personal data, keeping personal information private, using strong passwords and secured wireless networks, recognizing phishing emails, and using security software. It is also important to educate household members who may not be aware of the risks, such as children and other less-experienced online users. As a reminder, the IRS will not contact taxpayers by email, text message, or social media platforms.

Reportable Virtual Currency Transactions

The IRS reminds taxpayers to check the box on the top of Form 1040 (or Form 1040-SR or Form 1040-NR) about virtual currency. It asks, “At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?” All filers must check either “yes” or “no.” Taxpayers may check “no” if they purchased (with real currency) virtual currency or held it in their own wallet or account. They must check “yes” if they received or exchanged virtual currency for property, goods and services, as a result of hard fork, as a result of mining and staking activities, in trade for other virtual currency, or any disposal of a financial interest in virtual currency. Any capital gain or loss must be reported on Schedule D (Form 1040), and virtual currency income must be reported as they would report any other income.

Retirees: April 1 Deadline for RMDs

The IRS reminds retirees who turned 72 during the last half of 2021 that Friday, April 1, 2022 is the last day to begin receiving payments from Individual Retirement Arrangements (IRAs), 401(k)s, and other workplace retirement plans.  The required minimum distributions (RMDs) are normally made by the end of the year, but those who reached age 72 after June 30, 2021 are covered by a special rule allowing this later RMD date. As this RMD counts for 2021, an additional RMD is required by December 31, 2022. Both RMDs are taxable in 2022 and must be reported on the 2022 tax return.

Delayed Refund? Some Are Taking Longer

Though the IRS issues most refunds within 21 days for tax filers who file electronically and choose direct deposit, some are taking longer. Some factors that can affect the timing of a refund are errors, identity theft, or fraud. If a return requires a correction to the Child Tax Credit or Recovery Rebate Credit amount, includes the Earned Income Tax Credit or Additional Child Tax Credit, the refund may take additional time. The Where’s My Refund tool can help filers to know when to expect their refund or if there is a problem.