Raina's Elektra
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Managing Your Books and Freeing Your Mind
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New things taxpayers should consider as they get ready to file taxes in 2021
| Posted on 17 December, 2020 at 10:05 |
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New things taxpayers should consider as they get ready to file taxes in 2021
When people get ready to file their federal tax return there are new things to consider when it comes to which credits to claim and what deductions to take. These things can affect the size of any refund the taxpayer may receive.
Here are some new key things people should consider when filing their 2020 tax return.
Recovery rebate credit
Taxpayers may be able to claim the recovery rebate credit if they met the eligibility requirements in 2020 and one of the following applies to them:
• They didn't receive an Economic Impact Payment in 2020.
• They are single and their payment was less than $1,200.
• They are married, filed jointly for 2018 or 2019 and their payment was less than $2,400.
• They didn't receive $500 for each qualifying child.
Refund interest payment
People who received a federal tax refund in 2020 may have been paid interest. The IRS sent interest payments to individual taxpayers who timely filed their 2019 federal income tax returns and received refunds. Most interest payments were received separately from tax refunds. Interest payments are taxable and must be reported on 2020 federal income tax returns. In January 2021, the IRS will send a Form 1099-INT, Interest Income, to anyone who received interest of at least $10.
New charitable deduction allowance
New this year, taxpayers who don't itemize deductions can take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For more information, people should review Publication 526, Charitable Contributions.
Other refund-related reminders
• Taxpayers shouldn’t rely on receiving a refund by a certain date, especially when making major purchases or paying bills. Some tax returns may require additional review and processing may take longer.
• Refunds for taxpayers claiming the earned income tax credit or additional child tax credit can’t be issued before mid-February. This applies to the entire refund, not just the portion associated with this credit.
• The fastest and most secure way to receive a refund is to combine direct deposit with electronic filing, including the IRS Free File program. Taxpayers can track the status of their refund using the Where’s My Refund? tool.
More information:
Publication 5348, Get Ready to File
Publication 5349, Year-Round Tax Planning is for Everyone
Economic Impact Payment FAQs updated on IRS.gov
| Posted on 27 May, 2020 at 10:13 |
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Issue Number: COVID Tax Tip 2020-62
Economic Impact Payment FAQs updated on IRS.gov Many people have already received their Economic Impact Payment, and many more will be getting them soon. Whether it’s already there or on the way, the payment brings questions from many people. Anyone who has questions can visit IRS.gov for updated FAQs about the Economic Impact Payment. Here are a few of the questions the IRS continues to hear. What about a child's parents who are not married to each other, but both got the $500 for the same child? Will one of them have to pay that back? The law doesn’t require repayment of an Economic Impact Payment in these situations. Each parent should review Notice 1444, Your Economic Impact Payment. The IRS will mail this notice to their last known addresses within 15 days after the payment is made. The parents should keep the notice for their 2020 tax records. If someone who owed tax scheduled a payment from their bank account, will the IRS send the payment to the account used? No, the IRS will not send an Economic Impact Payment to an account used to make a payment to the IRS. If the agency doesn’t have direct deposit bank information for someone, their payment will be mailed to the address the IRS has on file. If someone requested a direct deposit of the payment, why is the IRS mailing it? There are several reasons why someone’s payment may have been sent by mail. These include: • The payment was already in process before the bank information was entered. • The IRS does not have the correct bank account information • The bank rejects the direct deposit The IRS will mail the payment to the address they have on file for the taxpayer. Typically, it will take up to 14 days to receive the payment. Share this tip on social media -- #IRSTaxTip: Economic Impact Payment FAQs updated on IRS.gov. https://go.usa.gov/xv32V |
Millions of people will get their Economic Impact Payment by prepaid debit card
| Posted on 26 May, 2020 at 12:33 |
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Millions of people will get their Economic Impact Payment by prepaid debit card Nearly four million people are being sent their Economic Impact Payment by prepaid debit card, instead of paper check. The determination of which taxpayers receive a debit card was made by the Bureau of the Fiscal Service, another part of the Treasury Department that works with the IRS to handle distribution of the payments. These Economic Impact Payment Cards arrive in a plain envelope from Money Network Cardholder Services. The Visa name will appear on the front of the card; the back of the card has the name of the issuing bank, MetaBank®, N.A. Information included with the card will explain that the card is an Economic Impact Payment Card. Those who receive Economic Impact Payment by prepaid debit card can do the following without any fees: • Make purchases online and at any retail location where Visa is accepted • Get cash from in-network ATMs • Transfer funds to their personal bank account • Check their card balance online, by mobile app, or by phone This free, prepaid card also provides consumer protections available to traditional bank account owners, including protection against fraud, loss, and other errors. The card will come with instructions on how to activate and use it. Learn more at www.eipcard.com. More information: Economic Impact Payments by Prepaid Debit Card Economic Impact Payment Card Economic Impact Payment Information Center Share this tip on social media -- #IRSTaxTip: Taxpayers should be aware of Coronavirus-related scams. https://go.usa.gov/xw325 |
COVID-19 paid leave tax credits for small and midsize businesses
| Posted on 12 May, 2020 at 11:45 |
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Issue Number: COVID Tax Tip 2020-53
COVID-19 paid leave tax credits for small and midsize businesses Small and midsize employers can claim two new refundable payroll tax credits. The paid sick leave credit and the paid family leave credit are designed to immediately and fully reimburse eligible employers for the cost of providing COVID-19 related leave to their employees. Here are some key things to know about these credits. Coverage • Employers receive 100% reimbursement for required paid leave. • Health insurance costs are also included in the credit. • Employers do not owe their share of social security tax on the paid leave and get a credit for their share of Medicare tax on the paid leave. • Self-employed individuals receive an equivalent credit. Fast funds • Reimbursement will be quick and easy. • The credit provides a dollar-for-dollar tax offset against the employer’s payroll taxes • The IRS will send any refunds owed as quickly as possible. To take immediate advantage of the paid leave credits, businesses should use funds they would otherwise pay to the IRS in payroll taxes. If those amounts are not enough to cover the cost of paid leave, employers can request an expedited advance from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. Share this tip on social media -- #IRSTaxTip: COVID-19 paid leave tax credits for small and midsize businesses. https://go.usa.gov/xvGyC |
What people really want to know about Economic Impact Payments
| Posted on 12 May, 2020 at 11:35 |
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Issue Number: COVID Tax Tip 2020-55
What people really want to know about Economic Impact Payments IRS.gov has answers to many questions people may have about their Economic Impact Payment. Here are answers to some of the top questions people are asking about these payments. Is this payment considered taxable income? No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer’s refund or increase the amount they owe when they file their 2020 tax return next year. A payment also will not affect income for purposes of determining eligibility for federal government assistance or benefit programs. Can people who receive a Form SSA-1099 or RRB-1099 use Get My Payment to check their payment status? Yes, they will be able to use Get My Payment to check the status of their payment after verifying their identity by answering the required security questions. If someone’s bank account information has changed since they filed their last tax return, can they update it using Get My Payment? To help protect against potential fraud, the tool also does not allow people to change direct deposit bank account information already on file with the IRS. If the IRS issues a direct deposit based on the account information that the taxpayer provided on their tax return and the bank information is now invalid or the account has been closed, the bank will reject the deposit. The agency will then mail payment as soon as possible to the address they have on file. Get My Payment will be updated to reflect the date a payment will be mailed. It will take up to 14 days to receive the payment, standard mailing time. Where can people get more information? Taxpayers who are required to file a tax return, can go to IRS Free File to file electronically. If they aren’t required to file, they should go to the Non-Filers: Enter Payment Info Here tool and submit their information to receive an Economic Impact Payment. For the complete lists of FAQs, visit the Economic Impact Payment and the Get My Payment tool pages on IRS.gov. The IRS updates these FAQs regularly. The IRS encourages people to share this information with family and friends. Share this tip on social media -- #IRSTaxTip: What people really want to know about Economic Impact Payments. https://go.usa.gov/xvst9 |
SSI and VA recipients with a child who don’t file taxes should visit IRS.gov now
| Posted on 1 May, 2020 at 11:28 |
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SSI and VA recipients with a child who don’t file taxes should visit IRS.gov now SSI and VA recipients who have children and weren’t required file a tax return in 2018 or 2019 should visit the Non-Filers: Enter Payment Info Here tool on IRS.gov by May 5. This will help ensure they receive their full Economic Impact Payment as soon as possible. This tool is available in English and Spanish. $1,200 automatic payments have started for those receiving Social Security retirement, survivor or disability benefits (SSDI) and Railroad Retirement benefits. Payments for Supplemental Security Income (SSI) and VA Compensation and Pension (C&P) beneficiaries who didn’t file a tax return in the last two years will start soon. In order to add the $500 per eligible child to these payments, the IRS needs the dependent information before the payments are issued. Otherwise, their payment will be $1,200 and, by law, the additional $500 per eligible child amount will be paid in association with a return filing for tax year 2020. This group should receive their Economic Impact Payment by direct deposit, Direct Express debit card or by paper check, just as they would normally receive their benefits. More information related to veterans and their beneficiaries who receive Compensation and Pension (C&P) benefit payments is available at VA.gov. Social Security Administration and Railroad Retirees People who receive Social Security retirement, survivors or disability insurance benefits (SSDI) and Railroad Retirement benefits (RRB) should begin getting their Economic Impact Payments this week. This includes those who don’t normally file a tax return. Beneficiaries who don’t normally file a tax return and have a child but didn’t register on the Non-Filer tool by April 22 will still receive their $1,200 Economic Impact Payment automatically beginning the first week of May. However, since the deadline has passed, by law, the additional $500 per eligible child will be paid after they file a tax return for 2020. Direct Express account holders can use the Non-Filers tool, but they can’t receive theirs or their child’s Economic Impact Payment in their Direct Express account. They only select a bank account for direct deposit or leave bank information blank to receive a check by mail. Share this tip on social media -- #IRSTaxTip: SSI and VA recipients with a child who don’t file taxes should visit IRS.gov now. https://go.usa.gov/xvVQW |
Tools to help people get their Economic Impact Payment
| Posted on 30 April, 2020 at 9:57 |
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Tools to help people get their Economic Impact Payment The IRS has two tools to help millions of taxpayers with their Economic Impact Payment. The payments are $1,200 per eligible person and up to $500 for each qualifying child. The first tool, Non-filers: Enter Payment Info Here is available – in English and Spanish - for certain taxpayers who don’t normally need to file a return. This free tool allows them to enter basic information so the IRS can issue their payment. The second tool, Get My Payment, allows people to check the status of their payment and provide bank account information if a payment has not been scheduled for delivery. Who needs to use Non-filers: Enter Payment Info Here?
Should these groups use the Non-filers: Enter Payment Info Here tool?
How to use Non-filers: Enter Payment Info Here. The process is simple, and it only takes a few minutes to complete and submit the request for their Economic Impact Payment. First, taxpayers should visit IRS.gov and go to Non-filers: Enter Payment Info Here. Then provide basic information. The IRS will use this information to confirm the taxpayer’s eligibility, calculate, and send them a payment. No tax will be owed on Economic Income Payments. It will not reduce a taxpayer’s refund or increase the amount owed when on the 2020 tax return filed next year. It will not affect income for purposes of determining eligibility for federal government assistance or benefit programs. Share this tip on social media -- #IRSTaxTip: Tools to help people get their Economic Impact Payment. https://go.usa.gov/xvEwC |
Common errors to avoid when filing for advance payment of employer credits
| Posted on 29 April, 2020 at 10:02 |
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Common errors to avoid when filing for advance payment of employer credits Employers who are filing Form 7200, Advance Payment of Employer Credits Due to COVID-19 should read the instructions carefully and take their time when completing this form to avoid mistakes. Using a reputable tax preparer – including certified public accountants, enrolled agents or other knowledgeable tax professionals – can also help avoid errors. Mistakes can result in a processing delay, which means it may take longer to get the advanced payment. Here are some common errors to avoid when filling out Form 7200:
Share this tip on social media -- #IRSTaxTip: Common errors to avoid when filing for advance payment of employer credits. https://go.usa.gov/xvEwa |
Taxpayers with a filing requirement must file a tax return to get an Economic Impact Payment
| Posted on 23 April, 2020 at 9:58 |
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Issue Number: COVID Tax Tip 2020-45
Taxpayers with a filing requirement must file a tax return to get an Economic Impact Payment While most eligible taxpayers don’t need to take any action to receive an Economic Impact Payment, some people will. This includes those who are required to file and haven’t filed a tax return for either 2018 or 2019. Here are some facts for eligible taxpayers who need to – and haven’t - filed a tax return for 2018 or 2019.
Questions? The IRS is regularly updating the Economic Impact Payment and the Get My Payment tool frequently asked questions pages on IRS.gov as more information becomes available. Taxpayers concerned about visiting a tax professional or community organization for help with their taxes should remember the payments will be available throughout the rest of 2020. The IRS encourages taxpayers to share this information with family and friends. Some people who normally don't file a tax return may not realize they're eligible for an Economic Impact Payment. Share this tip on social media -- #IRSTaxTip: Taxpayers with a filing requirement must file a tax return to get an Economic Impact Payment. https://go.usa.gov/xvNe9 |