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According to Spidell Publishing, an educational resource for tax professionals, on Saturday, August 8, the President signed four executive actions providing additional COVID-19 relief.

The three memorandums and one executive order signed by the President do the following:

  • Direct the Secretary of the Treasury to use his authority to defer the withholding, deposit, and payment of the employee’s portion of Social Security taxes paid from September 1, 2020, through December 31, 2020. The deferral will be available to any employee whose wages are generally less than $104,000 per year;
  • Authorize an additional $44 billion from the Department of Homeland Security’s Disaster Relief Fund to assist states to continue to pay expanded unemployment benefits of up to $400 per week, with the federal government paying $300 and states paying up to $100. States are called upon to use amounts allocated to them out of the Coronavirus Relief fund to pay their $100 share of the expanded unemployment benefits. Each state will manage this individually, so at this time it is unclear how each state will handle it;
  • Provide for the continued temporary cessation of student loan payments and a waiver of all interest on student loans held by the Department of Education until December 31, 2020; and
  • Direct various administrative agencies to take all lawful measures to prevent residential evictions and foreclosures resulting from the COVID-19 pandemic. The order does not contain any specifics for these directives.

The President may not have the authority to enforce the above actions. I will keep you posted if things change.

According to accounting.com “Trump also ordered continued eviction protection and student-loan relief.”

The moves could jeopardize negotiations with congressional Democrats over an additional coronavirus relief package, with the two sides trillions of dollars apart on key issues, including aid to state governments and the amount of supplementary unemployment benefits. The president, though, said he’d continue to negotiate with Democrats — who said Saturday’s measures “provide little real help to families.”

The text of the memorandums and order can be found at:

www.whitehouse.gov/news

This just in from the IRS about the Stimulus Checks:
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

This just in from the IRS:

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.

 

People have questions about the Stimulus Payments. And the IRS is attempting, short-staffed as they are, to provide answers. This just in from the IRS:

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.

Special alert for VA, SSI recipients who don’t file a tax return and have dependents

VA, SSI recipients with eligible children need to act by May 5 to quickly add money to their automatic Economic Impact Payment; ‘Plus $500 Push’ continues

If you didn’t file a 2018 or 2019 income tax return, please read this. The IRS may have your banking information because you receive a direct deposit of either your VA benefits or your SSI benefits. However, there is no way they know if you have a dependent child  under the age of 17 unless you tell them. Click on the link below to provide them with this information so you can get that extra $500 stimulus check:

https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

 

 

 

Every answer to every possible question you may have about your stimulus payment check, can be found here:

 

https://www.irs.gov/coronavirus/get-my-payment-frequently-asked-questions#bank

 

 

I just received the following Press Release from the IRS:

 

Taxpayers should be aware of Coronavirus-related scams

Taxpayers should be on the lookout for IRS impersonation calls, texts and email phishing attempts about the coronavirus or COVID-19 Economic Impact Payments. These scams can lead to tax-related fraud and identity theft.

Here’s what taxpayers should know:

  • The IRS will not call, email or text you to verify or request your financial, banking or personal information.
  • Watch out for websites and social media attempts to request money or personal information. The official website is IRS.gov.
  • Don’t open surprise emails that look like they’re coming from the IRS or click on attachments or links.
  • Taxpayers should not provide personal or financial information or engage with potential scammers online or over the phone.
  • Forward suspicious emails to phishing@irs.gov, then delete.
  • Go to IRS.gov for the most up-to-date information.

Here’s what people should know about the Economic Impact Payments:

  • The IRS will automatically deposit Economic Impact Payments into the bank account taxpayers provided on their 2019 or 2018 tax return for a direct deposit of their tax refund.
  • Those without a direct deposit account on file may be able to provide their banking information online through a new secure tool, Get My Payment.
  • Anyone who is eligible for an Economic Impact Payment and doesn’t provide direct deposit information will receive a payment mailed to the last address the IRS has on file.
  • The IRS does not charge a fee to issue the payment.

Scammers may:

  • Ask an individual to sign over their Economic Impact Payment check to them.
  • Ask for verification of personal or banking information.
  • Suggest that they can get someone tax refund or Economic Impact Payment faster by working on their behalf.
  • Issue a bogus check, often in an odd amount, then tell a person to call a number or verify information online in order to cash it.

Official IRS information about the COVID-19 pandemic and Economic Impact Payments can be found on the Coronavirus Tax Relief page on IRS.gov. The IRS encourages people to share this information with family and friends. Many people who normally don’t normally file a tax return may not realize they’re eligible for an Economic Impact Payment.

 

More information:
Report Phishing and Online Scams
Tax Scams

According to Spidell, a tax analysis and education company:

Economic impact payment direct deposit portal open (04-15-20)

The IRS opened its direct deposit portal on its website this morning. By clicking on the “Get My Payment” button at www.irs.gov/coronavirus/economic-impact-payments, taxpayers can:

  • Enter their bank account information if they hadn’t previously requested direct deposit on a return, or if they want to update their information;
  • Confirm the payment type: direct deposit or check; and
  • Check their payment status.

Taxpayers wanting to add their bank account information to speed up the receipt of their payment must provide the following information:

  • Their AGI from their most recent tax return submitted, either 2019 or 2018;
  • The refund or amount owed from their latest filed tax return; and
  • Bank account type, account and routing numbers.

Comment: It appears that if a taxpayer does not qualify for a payment due to income level, after entering the requested information a message stating “Payment Status Not Available” and a link to information on eligibility rules will be displayed.

Non-filers who receive Social Security Income will receive their stimulus checks because the IRS will get payment information from the SSA. However, what if you are among the many who neither filed a tax return in 2018 and 2019? Eligible U.S. citizens or permanent residents who had gross income that did not exceed $12,200 ($24,400 for married couples) for 2019 and were not otherwise required to file a federal income tax return for 2019, and didn’t plan to can use the IRS portal to sign up for payment. Simply click on the link below:

https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

Who will receive the Economic Impact Payment automatically without taking additional steps?

Most eligible U.S. taxpayers will automatically receive their Economic Impact Payments including:

  • Individuals who filed a federal income tax for 2018 or 2019
  • Individuals who receive Social Security retirement, disability (SSDI), or survivor benefits
  • Individuals who receive Railroad Retirement benefits

If you are concerned that payment will be delayed because the IRS doesn’t have your banking information, please know that a portal will be available in the very near future for you to provide this information to them.

 

I’ve had dozens of questions relating a variety of tax and economic topics. These are the most common ones:

Q. I’m self-employed, a sole proprietor (or in some cases a freelancer or gig worker). Can I apply for unemployment?
A. Yes you may. In normal circumstances, you would not be able to because you haven’t paid into the system. But these are different times and allowances are being made to help us all. In CA go to https://www.edd.ca.gov/unemployment/filing_a_claim.htm to file a claim

Q. I did not file a tax return for 2018 or 2019 because I was on Social Security and had no other income. Will I get a stimulus check automatically or do I have to file a return to get the check?
A. Yes, you will get the check automatically. There is no need to file an abbreviated tax return. At first, this was a requirement but the IRS realized that it can pick up your bank account info from the roles at SSA. So that’s what they are doing. They will provide you with a direct deposit of the stimulus check into your bank account.

Q. What if I didn’t have a filing requirement for the last two years and I wasn’t collecting social security? How will they know to send me a check?
A. Right now nothing is in place to help you. As soon as the IRS releases information about how people can go online to make sure they receive their EIP, they will let you know. Info on this should be coming out this week. Go to: https://www.irs.gov/coronavirus to check on recent developments. I understand they will be setting up a portal to deal with individuals in these situations.
You may also file an EIP tax return. Most tax pros are equipped to handle this. Or go to www.irs.gov and file it yourself. Click on the Free File button on the home page.

Q. Do I have to do anything, file any forms, to get the new extension to July 15? When must I pay my taxes?
A. No additional paperwork required; no extension need be filed. It’s automatic for both federal and CA. the extension includes time to pay not only your 2019 tax liability free of penalty and interest. July 15 is also the new due date for your first two installments of your estimated tax payments for 2020, normally due April 15 and June 15.

Q. I got a call from the IRS saying they don’t have my direct deposit information. Is it okay to provide them with that information over the phone or was that a scam? I hung up on them.
A. Yes, hanging up was the right thing to do because indeed it was a SCAM! Beware, the scammers are out there taking advantage of you during this trying time. Remember: The IRS will NEVER call you or email you. They always deal through snail mail correspondence.

Q. I tried to call the IRS this week to set up an installment agreement for the taxes I owe but no one answered the phones. Are they overwhelmed right now?
A. As a matter of fact, there are no phone operators on duty, so forget about calling them. They have also suspended collection activity for the duration. And the Practioner Hotline is closed as well. Many tax matters, such as setting up installment agreements can be dealt with online. Go to: www.irs.gov to set up your payment plan. You can also do many other things: apply for an EIN, get transcripts of your account, and check the status of your refund, among others. Their website has become a handy tool.

Q. My business needs help! I don’t know which loan to apply for: the Disaster Assistance or the Payroll Protection Loan.
A. The disaster assistance loan caps at $10,000 and may be forgiven if you use the funds for operating expenses. You may apply for it directly with the Small Business Administration (SBA) The payroll protection loan can be for much higher amounts and in addition to operating expenses, it covers 8 weeks of payroll for your employees. You must apply for this loan through your bank. Go to: https://www.sba.gov and click on the golden ruler bar at the top “Corona virus (COVID-19): Relief options and Additional Resources.”

Please note that on April 9 the IRS announced that Individuals, trusts, estates, corporations and other non-corporate tax filers qualify for the extra time to file and pay their 2019 taxes to July 15, 2020. Initially, only individuals were allowed this automatic extension.

If additional time is needed to file and pay, you may file an extension to October 15,2020. This extension must be filed by July 15, 2020. Also, any tax due (you may need to estimate) must be paid by July 15. There is no further extension granted of time to pay.

If you have a tax question, please write to me at bonnie@taxpertise.com.

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