6 Stimulus Bill And IRS Changes That You Need To Know
The IRS has made several significant changes in the last few days to help individuals and small businesses. Here are six key items you should know and consider using.
We are living in some pretty wild times. Things are moving fast in the business world, health care and government. It would appear that our current strategy of homeschooling and social distancing is going to be around for a while.
Due to the COVID-19 crisis, the IRS has made several significant changes in the last few days to help individuals and small businesses. Here are six key items you should know and consider using.
6 KEY Stimulus Bill and IRS Changes
as of 3/28/20
Fed Income Tax filing deadline is July 15, 2020
The IRS and Treasury department decided to extend the Federal income tax filing deadline for both individuals and businesses normally due on April 15 to July 15. This is an automatic extension, there are no required forms to file. If you cannot meet the July 15th deadline, you will still be able to file an extension, using form 4868 for individuals and 7004 for businesses.
June Quarterly Estimated Payments are STILL due
Note that payments normally due on June 15th for quarterly estimated tax payments have NOT been extended.
If you are due a refund, file it asap.
If you are due a refund from the Fed or state, it is strongly advised to go ahead and file your return. Time value of money suggests the faster you get the money, the more valuable it is. So, get it done if you are set to get a refund. Most tax refunds are still being issued within 21 days.
Individual contributions are extended to July 15, 2020
Individuals are being given an opportunity to make contributions to IRA, Roth IRA, HSA and MSA accounts until July 15th.
Payments are not automatically delayed
If you have already filed your return, owe taxes and have scheduled a payment for April 15, the payment will not be automatically delayed. You must cancel the payment and then reschedule it for July 15.
4 ways to cancel and reschedule your payment
If you scheduled a payment through IRS Direct Pay, you can use your confirmation number from the payment to access the Look Up a Payment feature. You can modify or cancel a scheduled payment until two business days before the payment date. The email notification you received when you scheduled the payment will contain the confirmation number.
If you scheduled a payment through Electronic Federal Tax Payment System (EFTPS), click on Payments from the EFTPS home page, login, then click Cancel a Tax Payment from the left menu and follow the instructions. You must do so at least two business days before the scheduled payment date.
If you scheduled a payment as part of filing your tax return (authorizing an electronic funds withdrawal), you may revoke (cancel) your payment by contacting the U.S. Treasury Financial Agent at 888-353-4537. You must call to make a payment cancellation request no later than 11:59 p.m. ET two business days prior to the scheduled payment date.
If you scheduled a payment by credit card or debit card, contact the card processor to cancel the card payment.
Recovery Rebates: The CARES bill provides payments to taxpayers.
“Recovery Rebates” are being treated as advance refunds of a 2020 tax credit.
Under this provision, individuals will receive a tax credit of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child.
The credit is phased out for taxpayers with adjusted gross income (AGI) above $150,000 (for joint filers), $112,500 (for heads of household), and $75,000 for other individuals.
The credit is not available to non-resident aliens, individuals who can be claimed as a dependent by another taxpayer, estates or trusts.
Taxpayers will reduce the amount of the credit available on their 2020 tax return by the amount of the advance refund payment they receive.
When to Hire An Accountant
Now is a good time to decide whether you should do your own taxes with software such as Turbo Tax or hire an Accountant. Here are eleven questions to determine whether to hire an accountant to do your taxes:
Tax season is approaching, the W2’s are starting to arrive and 1099’s should be sent. Now is a good time to decide whether you should do your own taxes with software such as Turbo Tax or hire an Accountant.
TurboTax and others like it are great programs for people with relatively simple taxes.
I’ve used an Accountant for many years. I consider my Accountant an integral part of my team. If I have questions, or issues related to my personal taxes, rental home or business, they are a phone call away for expert advice. Could I research these issues myself? Yes. The question is, what is the value my time. Will I get the over all value out of the research, given that an Accountant has already done it and understands the nuances? And my Accountant can explain my tax quandaries to me in a fraction of the time. Having an accountant helps me sleep at night as well, because I am confident that I am being advised to do all that can be done to save money on taxes, and that I am less likely to get audited by the IRS.
But, not everybody is “me” … This is my decision criteria for determining if you would benefit from an accountant:
If you don’t enjoy something and you can hire someone to do it better than you can and it doesn’t cost too much, then doing so is a no-brainer.
Here are eleven things to consider when deciding whether to hire an accountant to do your taxes:
Do you (and your partner) work for a company, and get W2’s?
Do you own a house?
Do you have a brokerage account that is heavily used?
Do you own a business?
Do you own alternative investments?
Have you recently had any interesting life events (a new baby, sold/bought a house, moved to a new state, inherited money)?
Are you near retirement age?
Is your income near a major IRS income limit? (If you are married, did you earn close to $77,000, $165,000 or $315,000?)
Do you own rental property?
Have had trouble with the IRS in the past?
Do you HATE doing your taxes?
If you answer “yes” to 2 or more of the above questions, you would benefit from a solid relationship with a local and friendly Accountant. Do you really want to spend your March weekends holed up in front of your computer, researching the never-ending set of changes to tax law?
Once you have determined that you would benefit from a Accountant, know that one will cost you more than Turbo Tax or another DIY tax software. But the benefits of outsourcing to an expert can out outweigh the costs. When was the last time you changed the brakes on your own car?
If you decide to look for Accounts, I am happy to provide some recommendations if you live in the Atlanta Area. Just email josh@chamberlainfa.com.