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Tax World & Student Loans

What Is New In The Tax World? 

One of the bills that Biden signed says that the tax penalties will be forgiven for 2019 and 2020 for late filing. If you have already filed your return, you don’t need to do anything. If you have been notified of a fine that you have not paid, the penalty will be erased. Those who have already payed the penalty will receive a refund or a credit. Most of the refunds will be delivered by the end of September according to the IRS. The tax payers who have yet to file returns for 2019 and 2020, they need to get them in by September 30th or else they will still have the pay the penalty. 

Did Biden Also Sign Off On The Student Forgiveness? 

President Biden announced a three part plan to help middle class federal student loan borrowers transition back to the regular payments as the pandemic related support expires. This means this plan includes a loan forgiveness for up to $20,000. The first part of the aid will extend the pause for payments for a final time through December 31st, 2022. Your payments of your student loans will resume in January, 2023. The second phase will provide up to $20,000 in debt cancellation to the Pell Grant recipients with loans held by the department of education and up to $10,000 of debt cancellation for non Pell Grant recipients. So borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households. To get that, if the US department of education doesn’t already have your income data, they will launch a simple application by early October. If you would like to be notified when this application is open you can go online to the Department of Education Subscription page and they will notify you when that is open. Once the borrower completes the application, they can expect relief within 4-6 weeks. They encourage everyone who is eligible to file the application by November 15th. There are 8 million people that they already have the data for and the relief will automatically be given to them. The third part is a rule to create an income driven retainer plan that will reduce future monthly payments for lower and middle income borrowers. 

What Forms Should People Be Expecting For 2022? 

The most common are the W-2, 1099, 1099-R, 1099-DIV, 1099-INT, SSA-1099, a 1098. 

Anything else to touch on? 

Just wanted to touch base with the possible marijuana businesses that are coming in. I just wanted to remind everyone that marijuana is still an illegal income due to it still being federally illegal. If you are deciding if you want to start a marijuana business and think you will have all this money it is still a possibility but you’re not able to use any of the deductions for expenses because it is still illegal. You get your income and you take the cost of the goods were and then the rest will be taxed. If that is you, make sure you are holding back money for taxes. 

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