Tax Updates December 17

National Tax Security Awareness Week

The IRS and Security Summit partners spent a week sharing information with taxpayers and tax professionals about security risks and how to minimize them. 

  • Day 1: Tax scams and identity theft – identifying phishing and tax scams, protecting devices with security software and protecting your sensitive information.
  • Day 2: Fake charity scams – verifying a charity before you give, and tips on keeping your financial and personal information safe.
  • Day 3: Identity Protection PINs – participating in the IP PIN program helps individual taxpayers protect against identity theft. The IP PIN tool is scheduled to launch January 10, 2022.
  • Day 4: Tax Pros – pandemic circumstances have added to the security risks from cybercriminals. Using the “Security Six” measures helps protect client data.
  • Day 5: Businesses – cyberattacks and theft of customer and business information remain serious problems. Follow the Federal Trade Commission’s best practices to maintain cybersecurity.

New in 2022

The IRS is encouraging taxpayers to ready themselves for filing their 2021 federal tax return. Key changes affect millions of taxpayers, and special steps regarding Economic Impact Payments (EIPs) and advance Child Tax Credit payments must be taken. For instance, those who received less than the Child Tax Credit amount for which they were eligible may claim the remainder on their return, while those who received more will have to repay the excess payment when they file. Letters regarding these amounts, as well as EIP amounts paid, will begin arriving in January. There is also a charitable deduction which may be claimed by taxpayers who take the standard deduction.

Required Minimum Distributions for Retirees

The IRS reminds retirement plan participants and individual retirement account owners that required minimum distributions (RMDs) must usually be taken by December 31. These are generally minimum amounts that must be withdrawn annually, depending on age or date of retirement. Owners of traditional IRAs, traditional SEP IRAs, SIMPLE IRAs, and workplace retirement plans are subject to RMDs. Roth IRAs do not require distributions while the original owner is still alive.