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Archive for April, 2020

A Tax Season Unlike Any Other…

Posted by taxguru on April 23, 2020

WeirdTaxSeason2020 

TrumpStimulusCheck

CuomoTaxingVirus 

people-jokes-stimulus-check

Posted in comix, TaxSeason | Comments Off on A Tax Season Unlike Any Other…

Receiving Stimulus Payments

Posted by taxguru on April 17, 2020

From a Client:

Kerry,

Hello. We were wondering about the stimulus payment so we checked it and they have nothing filed on us that they can determine our eligibility for a payment.

Is there something they don’t have because we usually don’t have any returns direct deposited, just mailed to us. But we get our SS checks direct deposited.

Thank You for information

 

My Reply:

As you may know, this stimulus payment program is so new that the details are constantly evolving. I did take a webinar on Wednesday that discussed the details as they currently stand.

There are actually a couple of issues at play with your situation.

1. Eligibility For Stimulus Payment
Only people with an expected 2020 income below a certain threshold ($99,000 per person or $198,000 per couple) are supposed to receive these special IRS payments. To guesstimate the 2020 income, IRS is using the income that was reported on the latest filed tax return, which for most people would be their 2018 or 2019.

While most people have fairly consistent incomes year to year, that wasn’t the case for you between 2018 and 2019. If you did, as we discussed, hold off mailing in your 2019 returns until closer to the July 15 due date, IRS will use what was reported on your 2018 1040 and will send you a check for the full $2,400.

If, however, you did send in the 2019 return and IRS was able to process it before it shut down all of its activities, the large capital gain that is on that return will make your total income well above the eligibility limit.

If IRS does have your 2019 income in their computer, even though you won’t be receiving a stimulus check now, you will receive it when you file your 2020 tax return and show them that your actual income for this year is under the limit. While the actual mechanics of this process are in the design stage, most tax pros are predicting that it will be handled in a similar manner to the $300 per person rebate checks sent out in 2008, where any over or under-payment was fixed with the filing of the actual 2008 1040.

2. Payment Logistics
IRS has already started direct depositing stimulus payments into some accounts where it has the bank info from what was reported on 1040s. While SSA does direct deposit their payments into recipients’ bank accounts, that system is separate and is not shared with IRS. Since we didn’t set you up for direct deposit of refunds with IRS, they will be sending you a check, most likely in the next few weeks.

You are in the exact same scenario as Sherry and I are. We have our SSA benefits deposited directly into our bank, only because they don’t give us any other option. With IRS, we don’t use their direct deposit option because there is always a possibility that those bank details could be used, intentionally or accidentally, to take money out of our account. It’s a rare occurrence, but it does happen often enough to make me wary of revealing too much personal info to IRS.

I hope I have explained the situation clearly. If anything does change in regard to the stimulus payments that would affect you, I will let you know.

Kerry

Posted in IRS | Comments Off on Receiving Stimulus Payments

IRS Broadens Application of July 15 Filing Date

Posted by taxguru on April 9, 2020

IRS has just published a press release moving more deadlines to July 15 than just the ones covered in their earlier pronouncements. 

IRS extends more tax deadlines to cover individuals, trusts, estates corporations and others

Of key interest to me:

The due date for the second installment of 2020 estimated taxes for individuals has been moved from June 15 to July 15.  No surprise there; except what took them so long to fix that screw-up?

Other tax returns and payments that would normally be due in between April 1, 2020 and July 14, 2020 now have until July 15.  This applies to some fiscal year C-corps, such as those with a tax year ending 1/31/20 (normally due 5/15/20) and those with a tax year ending 2/29/20 (normally due 6/15/20).

Posted in TaxDay | Comments Off on IRS Broadens Application of July 15 Filing Date

Making the Best of House Arrest

Posted by taxguru on April 9, 2020

Even though 2019 tax returns aren’t due in until July 15, it’s not a bad idea to use this time to get them done as soon as you can.  Of course, my usual advice still applies.  Don’t rush tax returns in until you have all of the information.  Amended returns do receive more IRS scrutiny than do original ones; so it is safest to be completely confident in the completeness and accuracy of your returns before sending them in.

TaxesDoneEarly

Posted in TaxDay | Comments Off on Making the Best of House Arrest