In the summer, the Treasury Department and the IRS finalized Schedules K-2 and K-3 for Forms 1065, 1120-S, and 8865 for tax year 2021. The schedules are designed to provide greater clarity for partners and shareholders on how to compute their U.S. income tax liability with respect to items of international tax relevance, including claiming deductions and credits. The Treasury Department and the IRS also finalized instructions associated with the Schedules K-2 and K-3. However, the tax year 2021 Forms, to which Schedules K-2 and K-3 must be attached, have not yet been finalized. Questions have arisen whether the Schedules K-2 and K-3 must be attached to tax year 2020 Forms for partnerships or S corporations with 2021 short tax years; or, in the case of Form 8865, filers of Form 8865 with 2021 short tax years. New FAQs address questions concerning Schedules K-2 and K-3 with respect to 2021 short tax years for pass-through entities and filers of Form 8865.

IRS Office of National Public Liaison

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WASHINGTON — The Internal Revenue Service is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC).

The ETAAC is an organized public forum for discussion of issues in electronic tax administration, such as prevention of identity theft and refund fraud. The committee supports the overriding goal that paperless filing should be the preferred and most convenient method of filing tax and information returns. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and private-sector tax partners to fight electronic fraud.

The IRS is looking for up to 10 qualified individuals who will serve three-year terms beginning in September 2022. Applicants should have experience in such areas as state tax administration, cybersecurity and information security, tax software development, tax preparation, payroll and tax financial product processing, systems management and improvement, and implementation of customer service initiatives. The IRS also strongly encourages applications from people representing the viewpoints of average taxpayers, including consumer advocates and others with an interest in tax issues.

Applications will be accepted through Jan. 31, 2022.

Nominations of qualified individuals may be made by letter and received from organizations or the individuals themselves. Applicants should complete the ETAAC application and include a short statement of interest and a resume. Applicants should describe and document their qualifications, past and current affiliations, and dealings with cybersecurity and electronic tax administration.

Applicants must complete and submit a tax check waiver form and undergo an IRS practitioner background check and an FBI background check. Information on the tax check waiver and FBI background check will be provided upon receipt of application. More information can be found at: Apply for Membership on the Electronic Tax Administration Advisory Committee (ETAAC) | Internal Revenue Service (irs.gov).

ETAAC is a Federal Advisory Committee established by the Internal Revenue Service Restructuring and Reform Act of 1998.
 
Questions about the ETAAC and the application process can be e-mailed to publicliaison@irs.gov.

WASHINGTON – The Internal Revenue Service today encouraged taxpayers to take important actions this month to help them file their federal tax returns in 2022, including special steps related to Economic Impact Payments and advance Child Tax Credit payments.

This is the second in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A special page, updated and available on IRS.gov, outlines steps taxpayers can take now to make tax filing easier in 2022.

Here are some key items for taxpayers to consider before they file next year.

Check on advance Child Tax Credit payments
Families who received advance payments will need to compare the advance Child Tax Credit payments that they received in 2021 with the amount of the Child Tax Credit that they can properly claim on their 2021 tax return.

Taxpayers who received less than the amount for which they're eligible will claim a credit for the remaining amount of Child Tax Credit on their 2021 tax return. Taxpayers who received more than the amount for which they're eligible may need to repay some or all of the excess payment when they file.

In January 2022, the IRS will send Letter 6419 with the total amount of advance Child Tax Credit payments taxpayers received in 2021. People should keep this and any other IRS letters about advance Child Tax Credit payments with their tax records. 

See Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return for more information.

Eligible families who did not get monthly advance payments in 2021 can still get a lump-sum payment by claiming the Child Tax Credit when they file a 2021 federal income tax return next year. This includes families who don’t normally need to file a return.

Economic Impact Payments and claiming the Recovery Rebate Credit
Individuals who didn't qualify for the third Economic Impact Payment or did not receive the full amount may be eligible for the Recovery Rebate Credit based on their 2021 tax information. They’ll need to file a 2021 tax return, even if they don't usually file, to claim the credit.

Individuals will also need the amount of their third Economic Impact Payment and any Plus-Up Payments received to calculate their correct 2021 Recovery Rebate Credit amount when they file their tax return. Ensuring they use the correct payment amounts will help them avoid a processing delay that may slow their refund.

In early 2022, the IRS will send Letter 6475 that contains the total amount of the third Economic Impact Payment and any Plus-Up Payments received. People should keep this and any other IRS letters about their stimulus payments with other tax records. Individuals can also log in to their IRS.gov Online Account to securely access their Economic Impact Payment amounts.

See IRS.gov/rrc for more information.

Charitable deduction changes
Taxpayers who don't itemize deductions may qualify to take a charitable deduction of up to $600 for married taxpayers filing joint returns and up to $300 for all other filers for cash contributions made in 2021 to qualifying organizations. For more information, read Publication 526, Charitable Contributions.

Get banked to get ready to direct deposit
Direct deposit gives taxpayers access to their refund faster than a paper check. Those without a bank account can learn how to open an account at an FDIC-insured bank or through the National Credit Union Locator Tool. Veterans should see the Veterans Benefits Banking Program for access to financial services at participating banks.

Links to online tools, publications and other helpful resources are available at IRS.gov/getready.

Notice 2021-65 provides guidance regarding the retroactive termination of the employee retention credit in the fourth calendar quarter of 2021 for employers who are not recovery startup businesses. The notice provides guidance regarding how the rules apply to recovery startup businesses during the fourth quarter of 2021. The notice also provides guidance to employers who received an advance payment or reduced deposits in anticipation of claiming the employee retention credit, but who are ineligible to claim the credit due to the change in law, on how they pay the advance and timely make required deposits, as well as whether they are eligible for relief from penalties. 

Notice 2021-65 will be in IRB:  2021-51, dated December 20, 2021.

WASHINGTON – The Internal Revenue Service today issued guidance for employers regarding the retroactive termination of the Employee Retention Credit. The Infrastructure Investment and Jobs Act, which was enacted on Nov. 15, 2021, amended the law so that the Employee Retention Credit  applies only to wages paid before October 1, 2021, unless the employer is a recovery startup business. 

Notice 2021-65 applies to employers that paid wages after September 30, 2021, and received an advance payment of the Employee Retention Credit for those wages or reduced employment tax deposits in anticipation of the credit for the fourth quarter of 2021, but are now ineligible for the credit due to the change in the law. The notice also provides guidance regarding how the rules apply to recovery startup businesses during the fourth quarter of 2021. 

Employers who Received Advance Payments

Generally, employers that are not recovery startup businesses and received advance payments for fourth quarter wages of 2021 will avoid failure to pay penalties if they repay those amounts by the due date of their applicable employment tax returns. 

Employers who Reduced Employment Tax Deposits
Employers that reduced deposits on or before Dec. 20, 2021, for wages paid during the fourth calendar quarter of 2021 in anticipation of the Employee Retention Credit and that are not recovery startup businesses will not be subject to a failure to deposit penalty with respect to the retained deposits if—

1. The employer reduced deposits in anticipation of the Employee Retention Credit, consistent with the rules in Notice 2021-24,
2. The employer deposits the amounts initially retained in anticipation of the Employee Retention Credit on or before the relevant due date for wages paid on December 31, 2021 (regardless of whether the employer actually pays wages on that date). Deposit due dates will vary based on the deposit schedule of the employer, and
3. The employer reports the tax liability resulting from the termination of the employer’s Employee Retention Credit on the applicable employment tax return or schedule that includes the period from October 1, 2021, through December 31, 2021. Employers should refer to the instructions to the applicable employment tax return or schedule for additional information on how to report the tax liability.

Due to the termination of the Employee Retention Credit for wages paid in the fourth quarter of 2021 for employers that are not recovery startup businesses, failure to deposit penalties are not waived for these employers if they reduce deposits after Dec. 20, 2021.

If an employer does not qualify for relief under this Notice, it may reply to a notice about a penalty with an explanation and the IRS will consider reasonable cause relief. 

More information for businesses seeking coronavirus-related tax relief can be found at IRS.gov.

WASHINGTON – The Internal Revenue Service, state tax agencies and the nation’s tax industry urged businesses to be alert to cyberattacks aimed at gaining access to business data and customer information and be aware of steps to help them on tax-related issues related to identity theft.

The partners, operating cooperatively as the Security Summit to fight identity theft, marked the final day of National Tax Security Awareness Week with a warning to businesses to use the strongest measures possible to protect their data and systems. 

“Businesses, just like individuals and tax pros, need to stay alert,” said IRS Commissioner Chuck Rettig. “Thieves may steal enough information to file a business tax return or use other scams that involve the company or its employees.” 

More than 70% of cyberattacks are aimed at businesses with 100 or fewer employees. Con artists can target credit card or payment information, the business identity information or employee identity information.

Businesses are encouraged to follow best practices from the Federal Trade Commission including:

More information is available at FTC’s Cybersecurity for Small Businesses.

Businesses should especially be alert to any COVID-19 or tax-related phishing email scams that attempt to trick employees into opening embedded links or attachments. IRS related scams may be sent to phishing@irs.gov.

Starting late last year, the IRS began masking sensitive information from business tax transcripts, the summary of corporate tax returns, to help prevent thieves from obtaining identifiable information that would allow them to file fake business tax returns.

Only financial entries are fully visible. All other information has varying masking rules. For example, only the first four letters of each first and last name – of individuals and businesses – will display. Only the last four digits of the Employer Identification Number will be visible.

The IRS also has the Form 14039-B, Business Identity Theft Affidavit (.pdf), that will allow companies to proactively report possible identity theft to the IRS when, for example, an e-filed tax return is rejected.

Businesses should file the Form 14039-B if it receives a:

This form will enable the IRS to respond to the business much faster than in the past and work to resolve issues created by a fraudulent tax return. Businesses should not use the form if they experience a data breach but see no tax-related impact. For more information, see Identity Theft Central’s Business section.

Although various tax scams can come and go, all employers should remain alert to Form W-2 theft schemes. In the most common version, a thief poses as a high-ranking company executive who emails payroll employees and asks for a list of employees and their W-2s. Businesses often don’t know they’ve been scammed until an employee reports a fraudulent tax return has been filed.

There is a special reporting procedure for employers who experience the W-2 scam. It also may be found at Identity Theft Central’s Business section.

Finally, Security Summit partners urge businesses to keep their EIN application information current. Changes of address or responsible party may be reported using Form 8822-B. Reminder: Changes in the responsible party must be reported to the IRS within 60 days. Current information can help the IRS find a point of contact to resolve identity theft and other issues.

The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the final installment in a week-long series of tips to raise awareness about identity theft.

See IRS.gov/securitysummit for more details. Also, check out the most recent A Closer Look column on National Tax Security Awareness Week here.

WASHINGTON – The Internal Revenue Service, state tax agencies and the tax industry marked the fourth day of National Tax Security Awareness Week with a reminder to tax professionals and taxpayers that they can use digital signatures on a variety of common IRS forms and access a secure online platform to view and make changes to their account.

The partners, working together as the Security Summit, today added to the 6th annual National Tax Security Awareness Week, a week-long effort to heighten awareness about identity theft and data security measures among taxpayers, businesses and tax professionals.

To help reduce burden for the tax community, the IRS allows taxpayers to use electronic or digital signatures on certain paper forms they cannot file electronically. The IRS is balancing the e-signature option with critical security and protection needed against identity theft and fraud.

“The pandemic and the need for increased telework has created opportunities for sophisticated cybercriminals to scam people,” said IRS Commissioner Chuck Rettig. “As an agency, we’ve been working to strengthen our defenses, and working to help taxpayers. These efforts include accepting digital signatures and improving our online platforms to give people protected access to their tax information.”

Types of acceptable electronic signatures
The IRS will accept a wide range of electronic signatures. An electronic signature is a way to get approval on electronic documents. It can be in many forms and created by many technologies. Acceptable electronic signature methods include:

The IRS doesn't specify what technology a taxpayer must use to capture an electronic signature. The IRS will accept images of signatures (scanned or photographed) including common file types supported by Microsoft 365 such as .tiff, .jpg, .jpeg, .pdf, Microsoft Office suite or Zip.

The IRS allows taxpayers and representatives to use electronic or digital signatures on certain paper forms which they cannot file using IRS e-file. The forms are available at IRS.gov and through tax professional's software products.

Online accounts and added features
A new feature, added this year, gives taxpayers digital control over who can represent them or view their tax records; a groundbreaking step in the agency's expansion of electronic options for taxpayers and tax professionals.

The new feature, one of many recent enhancements to the Online Account for individuals, will allow individual taxpayers to authorize their tax practitioner to represent them before the IRS with a Power of Attorney (POA) and to view their tax accounts with a Tax Information Authorization (TIA).

Tax professionals may go to the new Tax Pro Account on IRS.gov to digitally initiate POAs and TIAs. These digital authorization requests are simpler versions of Forms 2848 and 8821.

Once completed and submitted by the tax professional, the authorization requests will appear in the taxpayers' Online Account for their review, approval or rejection, and electronic signature. Because the taxpayers' identities are already verified at the time of login, they simply check a box as their signature and submit the authorization request to the IRS.

A key benefit is the completed digital authorization, if accurate, will go directly to the Centralized Authorization File (CAF) database and will not require manual processing. Most requests will be immediately recorded and appear on the list of approved authorizations in the taxpayer's Online Account and the tax professional's Tax Pro Account. Some authorizations may take up to 48 hours. Tax professionals may then go to e-Services Transcript Delivery Service to see the taxpayer's records.

This new digital authorization option will be a much faster process. It will allow the IRS to reduce its current CAF inventory and to focus on authorization requests received through fax, mail or the Submit Forms 2848 and 8821 Online – all of which require IRS personnel to handle.

To connect with their tax professionals, taxpayers either sign in to their Online Account using their IRS username or ID.me account. The IRS unveiled an improved identity verification and sign-in process using ID.me that enables more people to securely access and use IRS online tools and applications. This new process also applies to Tax Pro Account.

The Security Summit partners remind all tax professionals to review their security measures. IRS Publication 4557, Safeguarding Taxpayer Data (.pdf), provides tax pros with a starting point for basic steps to protect clients.

In addition to the required information security plan, tax pros should also consider an emergency response plan should they experience a breach and data theft. This time-saving step should include contact information for the IRS Stakeholder Liaisons, who are the first point of contact for data theft reporting to the IRS and to the states.

IRS Publication 5293, Data Security Resource Guide for Tax Professionals (.pdf), provides a compilation of data theft information available on IRS.gov, including the reporting processes.

The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is part of a week-long series of tips to raise awareness about identity theft.

See IRS.gov/securitysummit for more details. Also, check out the most recent A Closer Look column on National Tax Security Awareness Week here.

WASHINGTON – The Internal Revenue Service, state tax agencies and the nation’s tax industry today warned tax professionals that they face additional security risks from cybercriminals seeking to use the pandemic and phishing scams to steal sensitive client information.

The partners, working together as the Security Summit, urged tax pros to remain focused on security issues and ensure they follow important steps to safeguard their information, including using multi-factor authentication and using a Virtual Private Network to guard against data loss. And Summit partners continued to remind tax pros, both large and small, that they are required to have a security plan in place.

This is part of the National Tax Security Awareness Week. Now in its sixth year, the initiative aims to heighten awareness about identity theft and data security measures among taxpayers, businesses, and tax professionals. This effort is particularly important right now as the 2022 tax filing season approaches, and identity thieves continue trying to steal sensitive data to file fraudulent tax returns.

“We continue to see scams and security risks during this period targeting tax professionals and the sensitive information they hold,” said IRS Commissioner Chuck Rettig. “Identity thieves continue to evolve with the times and use the pandemic and other tricks to take advantage of tax pros and gain access to their data. We continue to urge tax preparers to remain aware of this changing threat. Taking important security steps can help avoid a security breach that can be devastating to them and their clients.”

As the IRS and Security Summit partners took important steps to strengthen defenses against cybercriminals, identity thieves increasingly turned to tax professionals, targeting their offices and systems. Data thefts from tax professionals can provide valuable information to thieves trying to file fraudulent tax returns.

The Summit partners remind tax professionals to review their security measures. IRS Publication 4557, Safeguarding Taxpayer Data (.pdf), provides tax professionals with a starting point for basic steps to protect clients.

The Security Summit also created the “Taxes-Security-Together” Checklist to help tax professionals identify the basic steps they should take. As more tax preparers work from home or remote locations because of COVID-19, these measures are even more critical for securing tax data.

Basic protections - the ‘Security Six’ measures
These easy steps can make a big difference, both for tax pros and taxpayers:

Use multi-factor authentication to protect tax accounts
In 2021, all online tax preparation products for tax professionals included an option for using multi-factor authentication. The Security Summit urges all tax professionals to use this option as the 2022 filing season approaches.

Practitioners can download to their mobile phones readily available authentication apps offered through Google Play or the Apple Store. These apps will generate a security code. Codes also may be sent to preparer's email or text, but the IRS notes those are not as secure as the authentication apps. Search for "Authentication apps" in a search engine to learn more.

Use virtual private networks to protect remote sites
A VPN provides a secure, encrypted tunnel to transmit data between a remote user via the Internet and the company network. As teleworking or working from home continues during COVID-19, VPNs are critical to protecting and securing internet connections.

Failing to use VPNs can add risks to remote takeovers by cyberthieves, giving criminals access to the tax professional's entire office network simply by accessing an employee's remote internet.

Tax professionals should seek out cybersecurity experts whenever possible. Practitioners can also search for "Best VPNs" to find a legitimate vendor, or major technology sites often provide lists of top services. Remember, never click on a "pop-up" ad that’s marketing a security product. Those generally are scams.

Avoid phishing scams, including attempts to gain EFINs
Phishing emails generally have an urgent message, such as “your account password expired.” They direct users to an official-looking link or attachment. But the link may take users to a fake site made to appear like a trusted source, where it requests a username and password. Or, the attachment may contain malware, which secretly downloads software that tracks keystrokes and allows thieves to eventually steal all the tax pro's passwords.

Remember, scam emails can target tax pros by seeking EFIN information. One scam example says it’s from “IRS Tax E-Filing” and carries the subject line “Verifying your EFIN before e-filing.”

The IRS warns tax pros not to take any of the steps outlined in these types of email, especially responding to the email. The body of the bogus email states:

In order to help protect both you and your clients from unauthorized/fraudulent activities, the IRS requires that you verify all authorized e-file originators prior to transmitting returns through our system. That means we need your EFIN (e-file identification number) verification and Driver's license before you e-file.

Please have a current PDF copy or image of your EFIN acceptance letter (5880C Letter dated within the last 12 months) or a copy of your IRS EFIN Application Summary, found at your e-Services account at IRS.gov, and Front and Back of Driver's License emailed in order to complete the verification process. Email: (fake email address)

If your EFIN is not verified by our system, your ability to e-file will be disabled until you provide documentation showing your credentials are in good standing to e-file with the IRS.

© 2021 EFILE. All rights reserved. Trademarks
2800 E. Commerce Center Place, Tucson, AZ 85706

Tax professionals who received the scam should save the email as a file and then send it as an attachment to phishing@irs.gov. They also should notify the Treasury Inspector General for Tax Administration at www.TIGTA.gov to report the IRS impersonation scam. Both TIGTA and the IRS Criminal Investigation division are aware of the scam.

Like all phishing email scams, it attempts to bait the receiver to take action (opening a link or attachment) with a consequence for failing to do so (disabling the account). The links or attachment may be set up to steal information or to download malware onto the tax professional’s computer.

In this case, the tax preparers are being asked to email documents that would disclose their identities and EFINs to the thieves. The thieves can use this information to file fraudulent returns by impersonating the tax professional.

Tax professionals also should be aware of other common phishing scams that seek EFINs, Preparer Tax Identification Numbers (PTINs) or e-Services usernames and passwords.

Some thieves also pose as potential clients, an especially effective scam currently because there are so many remote transactions during the pandemic. The thief may interact repeatedly with a tax professional and then send an email with an attachment that claims to include their tax information.

The attachment may contain malware that allows the thief to track keystrokes and eventually steal all passwords or take over control of the computer systems.

Some phishing scams are ransomware schemes in which the thief gains control of the tax professionals’ computer systems and holds the data hostage until a ransom is paid. The Federal Bureau of Investigation (FBI) has warned against paying a ransom because thieves often leave the data encrypted.

The need for a security plan and data theft plan
The IRS and Security Summit partners remind tax professionals that federal law requires them to have a written information security plan. In addition to the required information security plan, tax pros also should consider an emergency response plan should they experience a breach and data theft. This time-saving step should include contact information for the IRS Stakeholder Liaisons, who are the first point of contact for data theft reporting to the IRS and to the states.

IRS Publication 5293, Data Security Resource Guide for Tax Professionals (.pdf), provides a compilation of data theft information available on IRS.gov, including the reporting processes.

The IRS, state tax agencies, the private sector tax industry - including tax professionals - work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the fourth in a week-long series of tips to raise awareness about identity theft.

See IRS.gov/securitysummit for more details. Also, check out the most recent A Closer Look column on National Tax Security Awareness Week here.

Revenue Ruling 2021-20 provides guidance regarding whether the 4 percent applicable percentage (4 percent floor) under § 42(b)(3) of the Internal Revenue Code applies to the low-income buildings described in the revenue ruling.  This revenue ruling holds that a draw-down bond that is issued prior to 2021 (with draws occurring in a subsequent year), a de minimis § 42(h)(4)(A) obligation issued after December 31, 2020, or a de minimis allocation of low-income housing credit dollar amount occurring after December 31, 2020, do not cause a building to be subject to the minimum 4 percent floor under § 42(b)(3).

Revenue Procedure 21-43 provides safe harbors for when an obligation described in § 42(h)(4)(A) of the Internal Revenue Code or an allocation of a low-income housing credit dollar amount is more than de minimis for purposes of the associated revenue ruling providing guidance on whether the 4 percent applicable percentage under § 42(b)(3) applies to certain low-income buildings.

Revenue Ruling 2021-20 & Revenue Procedure 21-43 will in in IRB 2021-51, date 12/27/2021.

There are steps people, including those who received stimulus payments or advance child tax credit payments, can take now to make sure their tax filing experience goes smoothly in 2022. They can start by visiting the Get Ready page on IRS.gov. Here are some other things they should do to prepare to file their tax return.

Gather and organize tax records
Organized tax records make preparing a complete and accurate tax return easier. They help avoid errors that lead to processing delays that slow refunds. Having all needed documents on hand before taxpayers prepare their return helps them file it completely and accurately. This includes:

• Forms W-2 from employers
• Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan
• Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy
• Form 1099-INT for interest received
• Other income documents and records of virtual currency transactions

Taxpayers should also gather any documents from these types of earnings. People should keep copies of tax returns and all supporting documents for at least three years.

Income documents can help taxpayers determine if they're eligible for deductions or credits. People who need to reconcile their advance payments of the child tax credit and premium tax credit will need their related 2021 information. Those who did not receive their full third Economic Impact Payments will need their third payment amounts to figure and claim the 2021 recovery rebate credit.

Taxpayers should also keep end of year documents including:

• Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments
• Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit
• Form 1095-A, Health Insurance Marketplace Statement, to reconcile advance premium tax credits for Marketplace coverage

Confirm mailing and email addresses and report name changes
To make sure forms make it to the them on time, taxpayers should confirm now that each employer, bank and other payer has their current mailing address or email address. People can report address changes by completing Form 8822, Change of Address and sending it to the IRS. Taxpayers should also notify the postal service to forward their mail by going online at USPS.com or their local post office. They should also notify the Social Security Administration of a legal name change.

View account information online
Individuals who have not set up an Online Account yet should do so soon. People who have already set up an Online Account should make sure they can still log in successfully. Taxpayers can use Online Account to securely access the latest available information about their federal tax account.

Review proper tax withholding and make adjustments if needed
Taxpayers may want to consider adjusting their withholding if they owed taxes or received a large refund in 2021. Changing withholding can help avoid a tax bill or let individuals keep more money each payday. Life changes – getting married or divorced, welcoming a child or taking on a second job – may also be reasons to change withholding. Taxpayers might think about completing a new Form W-4, Employee's Withholding Certificate, each year and when personal or financial situations change.

People also need to consider estimated tax payments. Individuals who receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income should make quarterly estimated tax payments. The last payment for 2021 is due on Jan. 18, 2022.

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