TAX SEASON 2020 ADDITIONAL INFORMATION for OUR OFFICE:
Our offices are following St. Louis Region Health guidelines
for COVID-19 Business Recovery Initiative & Operation Protocols
- Our office is closed to walk-in clients, but curbside pick-up and drop-off is available, please email or call before arriving.
- Appointments are required and available for tax and business consulations, please email or call the office.
- This all helps in the removal of potential exposure and minimizes contact between all clients.
We are currently processing tax return extensions.
The deadline for 2019 tax returns under an extension is October 15.
We are all in this together and we will get through it together.
Thank you for your continued support!
COVID-19 NEWS AND INFORMATION:
IRS Newsroom (latest update):
IRS ISSUES Q&A ON THE APRIL 15 EXTENSION:
Paycheck Protection Program
St. Louis Buisness Journal SMALL BUSINESS RESOURCE GUIDE
SBA DISASTER LOANS for Small Businesses:
ST. LOUIS GATEWAY RESILIENCE for Small Businesses:
FEDERAL STIMULUS PROGRAM:
QUESTIONS ABOUT ECONOMIC IMPACT PAYMENTS
MISSOURI DEPT OF REVENUE EXTENDS FILING AND PAYMENT DEADLINE:
MISSOURI DIVISION OF EMPLOYMENT SECURITY:
ILLINOIS DEPT OF REVENUE EXTENDS FILING AND PAYMENT DEADLINE:
WHERE’S MY REFUND?
May 11, 2020 ... Economic Stimulus Payments
Act by Wednesday, May 13 for direct deposit
Why my payment is different than anticipated
May 6, 2020 ... Stimulus Checks for the deceased must be returned
A52. You should return the payment as described below.
If the payment was a paper check:
- Write "Void" in the endorsement section on the back of the check.
- Mail the voided Treasury check immediately to the appropriate IRS location listed below.
- Don't staple, bend, or paper clip the check.
- Include a note stating the reason for returning the check.
- Kansas City Internal Revenue Service
333 W Pershing Rd.
Kansas City, MO 64108
- Philadelphia Internal Revenue Service
2970 Market St.
Philadelphia, PA 19104
April 15, 2020 ... Missouri Unemployment for Self-Employed
Missouri Encourages Self-Employed, Gig Workers to Apply for Unemployment;
Expects to Begin Processing Claims as Early as the Week of April 19, 2020
April 2, 2020 ... Economic Stimulus Payments
What we know and next steps
Seniors do not need to file a short return
Earlier this week, the IRS released IR-2020-61, which includes a statement that “some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.” Knowing that this directly conflicts with wording in the CARES Act, NATP contacted IRS Commissioner Rettig and key members of the House Ways and Means Committee to request clarification.
As of last night, the U.S. Department of the Treasury and the IRS announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive the economic impact payment. Instead, payments will be automatically deposited into their bank accounts. The IRS will use information from the Form SSA-1099 and Form RRB-1099, and recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits.
Please note, since the IRS would not have information regarding any dependents for these people unless they filed a tax return, each person would receive $1,200 per person, without the additional amount for any dependents.
First stimulus payments expected to go out week of April 13
According to our sources on the Hill, the Treasury Department and IRS officials have told the House Ways and Means Committee that the initial wave of payments will go out the week of April 13. The payments will automatically deposited into the same bank account reflected on the 2019 or 2018 return filed. In the coming weeks, the Treasury plans to develop a web-based portal that will allow individuals who have not recently submitted banking information to the IRS to do so, enabling them to receive payments immediately as opposed to waiting for a check to arrive in the mail.
Taxpayers in the first wave have direct deposit information on file with the IRS from their 2018 or 2019 tax returns. Paper checks would start going out in May to people who don't have direct deposit information on file with the IRS. About 5 million checks will be sent weekly, and it could take up to 20 weeks to distribute all of them. People with the lowest incomes will get their checks first.
We’ve heard that the IRS anticipates creating a “Where’s my Economic Impact Payment?” tracker, similar to the “Where’s my refund?” system.
Payments are available throughout 2020
If someone who normally doesn’t file a tax return contacts you, let them know the IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.
The IRS plans on releasing the “simple tax return” in the upcoming weeks. That form is expected to ask filers for their names, Social Security numbers, information on dependents and deposit information.
For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available through Dec. 31, 2020.
There is no qualifying income requirement, but there is a phase-out for payments
There is no qualifying income requirement. Individuals with $0 of income are eligible for the payment provided they are not the dependent of another taxpayer and have a work-eligible SSN. Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.
Taxpayers with a lower 2020 AGI will receive a credit
The payment is actually an advance on a tax credit claimed on the 2020 tax return. If a taxpayer’s income is lower in 2020 than in 2019, any additional credit for which they are eligible will be refunded or will reduce the tax liability when the 2020 tax return is filed. As it stands, if your 2020 income is higher than the thresholds and you received the payment, you will not need to pay back any part of the payment.
Taxpayers who owe back taxes will still receive the payment
While the IRS has not officially provided guidance on this, the Senate Finance Committee stated that the bill turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments. The only administrative offset that will be enforced applies to those who have past due child support obligations that the states have reported to the Treasury Department.
March 27, 2020 ... more questions? more answers!
CARES Act – Stimulus Checks
NATP working with IRS on addressing common questions
The Senate unanimously passed the Coronavirus Aid, Relief, and Economic Security Act (CARES). The House is expected to pass this legislation tomorrow morning and the president to sign it into law shortly after. Included in the legislation are 2020 recovery rebates for individuals.
According to the Senate Committee on Finance summary:
All U.S. residents with adjusted gross income up to $75,000 ($150,000 married), who are not a dependent of another taxpayer and have a work eligible Social Security number are eligible for the full $1,200 ($2,400 married) rebate. In addition, they are eligible for an additional $500 per child. This is true even for those who have no income, as well as those whose income comes entirely from non-taxable, means-tested benefit programs, such as SSI benefits.
For the majority of Americans, no action on their part will be required to receive a rebate check as the IRS will use a taxpayer’s 2019 tax return if filed, or alternatively, their 2018 return. This includes many low-income individuals who file a tax return in order to take advantage of the refundable earned income tax credit and child tax credit. The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phaseout threshold. The amount is completely phased out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
We understand this payment will result in many questions from clients and the public. The IRS are aware that, when this law passes, there will be a lot of unanswered questions the IRS will need to address.
CARES Act – Other Tax Provisions
Additional relief available for taxpayers
As previously mentioned, the CARES Act has not been signed by the president yet, but we expect the bill to quickly move through the House with no changes. Additional relief provided in the Act includes:
- Special rules for use of retirement funds (waives the 10% early withdrawal penalty for distributions up to $100,000)
- Temporary waiver of required minimum distribution rules
- Allowance of partial above-the-line deduction for up to $300 of charitable contributions in 2020
- Modification of limitations on charitable contributions during 2020
- Employee retention credit for employers subject to closure due to COVID-19
- Delay of payment of employer payroll taxes
- Modifications for net operating losses
- Modification of limitation on losses for taxpayers other than corporations
- Modification of credit for prior year minimum tax liability of corporations
The Senate Committee on Finance released a section-by-section summary for each of these provisions.
Additional Extension Filing Deadline Guidance
IRS provides Q&A page
The IRS posted its Filing and Payment Deadline Questions and Answers page. These Q&As address the federal filing and payment extension to July 15, and include additional information on the extension to Oct. 15, first quarter estimated tax payments, IRAs and HSAs.
Some of the questions we’ve been hearing a lot include:
- Contributions to IRAs and HSAs have been extended to July 15.
- Second quarter 2020 estimated income tax payments are still due on June 15. First quarter 2020 estimated income tax payments are postponed from April 15 to July 15.
- The relief does not change the estimated tax requirements or estimated tax penalty for 2019.
IRS Operations During COVID-19 Outbreak
Limited services available
To protect employees, the IRS is curtailing some operations during this period; however, it will continue to accept tax returns and issue refunds. Many IRS offices in areas hardest hit by COVID-19 are closed or have reduced operations on mission-critical items.
While able to receive mail, the IRS will be responding to paper correspondence only to a very limited degree during this period. Taxpayers who mail correspondence to the IRS during this period should expect to wait longer than usual for a response. Even after normal operations resume, it will take the IRS time to work through any correspondence backlog.
WE WILL PROVIDE MORE UPDATES AS THEY BECOME AVAILABLE.