News & Updates

Getting Ready for Tax Season: Cost of Living Adjustment for 2021

Did you know that Social Safety and Supplemental Insurance (SSI) income benefits will increase for 70 million Americans in 2021? This adjustment ensures that benefits provided reflect cost-of-living increases as measured by the United States Department of Labor’s Customer Price Index (CPI-W). Tax season

Which rises as inflation rises. This change means that the prices of goods and services such as food and medical costs are slightly higher on normal than they were last year. Consequently, the cost-of-living adjustment (COLA) helps to balance these costs.

What is the novel Social Security Tax Limit?

The income limit for employees under full retirement age (see full retirement age table) will be raised to $18,960. The IRS deducts $1 from benefits for every $2 earned over $18,960.

The income limit for people who reach full retirement age in 2021 will be raised to $50,520. The IRS deducts $1 from benefits for every $3 earned above $50,520 in the month the worker reaches full retirement age.

Will I be notified about COLA?

The Social Security Administration sends notices to recipients of retirement, survivors, disability, SSI, and representative payees. You can also get your Social Security COLA securely online through the message centre in your Social Security account.

Suppose you prefer to access your COLA notification online rather than receive a report in the mail. In that case, you can log in and update your account settings to opt-out of receiving messages by email.

You can also select to receive an SMS or email notification of each new message, so you are always up-to-date with the latest information about the benefits.

When will COLA come into force?

  • COLA will begin paying benefits to more than 64 million Social Security recipients in January 2021. More than eight million SSI recipients will be increased by December 31, 2020.
  • The US Treasury Department offers more than 20 different programs to help eligible citizens pay their taxes. Some of these agendas include:
  • The American Opportunity Tax Credit (AOTC) proposals a tax credit to help cover your education costs for the first four years after high school.
  • This filing season, the Internal Revenue Service (IRS) encourages all taxpayers to verify their Earned Income Tax Credit (EITC) eligibility using EITC’s Assistant. This is refundable federal tax praise for low- and middle-income workers and families. Once taxpayers find out if they are eligible for the EITC, they must file a statement and apply for the credit.
  • Another program is Volunteer Income Tax Assistance (VITA). Which aims to provide tax assistance to people who typically earn $54,000 or less, live with a disability. Are elderly, or are affluent taxpayers—limite English language.

Like the other US Treasury Department tax assistance programs, you can find these programs on your agency’s page on Benefits.gov.

Where else can I look for tax help?

To learn more about the tax assistance available, read our article, Leverage IRS Resources to Prepare for Tax Season. The IRS can also help you find free tax prep and find certified IRS volunteers who can help you prepare your tax returns.

Take the pressure out of this tax season by starting as soon as possible. Complete the Benefits Finder questionnaire to learn more about benefits programs you may be eligible for.

For more tax-related programs, including information on various tax credits and taxpayer assistance programs, visit the Financial Assistance category.

Also Read:- all you need to know about the ts e challan

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