Tax Refund Chart Can Help You Guess When You’ll Receive Your Money In 2021

Hear that? It’s the sound of millions of taxpayers cheering across the country: the Internal Revenue Service (IRS) has announced the open of the tax filing season. That date is February 12, 2021.

If you want to get your refund as fast as possible, the IRS recommends that you e-file your tax return and use direct deposit (be sure to double-check those account numbers before you send your return). If you file by paper, it will take longer. According to the IRS, eight out of 10 taxpayers get their refunds by using direct deposit.

Assuming no delays, here are my best guesses for expected tax refunds based on filing dates and information from the IRS. I can’t stress enough that these are simply educated guesses. I like math and charts as much as the next girl, but there are a number of factors that could affect your tax refund (keep reading)

PROMOTED Civic Nation BrandVoice | Paid Program The Role Of A Mentor Grads of Life BrandVoice | Paid Program How Reimagining Employment Practices Can Advance Racial Justice UNICEF USA BrandVoice | Paid Program UNICEF-Supported Vaccinators Won’t Stop Until They Eradicate Polio In Afghanistan

refund chart
KPE

* No matter when you filed your tax return, if you claimed the EITC or the ACTC, don’t forget to take into consideration that hold date.

My numbers are based on an expected IRS receipt date beginning on the open of tax season, February 12, 2021, through the close of tax season on April 15, 2021. To keep the chart manageable, I’ve assumed the IRS received your e-filed tax return on the first business day of the week; that’s usually a Monday, but if there’s a holiday (like President’s Day), I’ve skipped ahead until Tuesday. The same logic holds true for issuing refunds. In reality, the IRS issues tax refunds throughout the week, so the date could move forward or backward depending on the day your return was received.

MORE FOR YOU

McConnell Blocks Trump’s, Democrats’ Bid To Increase Stimulus Checks To $2,0005 Mistakes To Avoid With Retirement Account Beneficiary SelectionsTrump May Not Sign Stimulus Bill Without $2,000 Stimulus Checks; Here’s What Could Happen Next

Other sites may have different numbers but remember they’re just guessing, too: The IRS no longer makes their tax refund processing chart public.

Do not rely on any tax refund chart—this one included—for date-specific planning like a large purchase or a paying back a loan. 

Remember that if you claim the earned-income tax credit (EITC) and the additional child tax credit (ACTC), the IRS must wait until February 15 to begin issuing refunds to taxpayers who claim the EITC or the ACTC (that’s pretty close to the start date). Don’t forget to consider regular processing times for banks and factor in weekends and the President’s Day holiday. The IRS expects to see tax refunds begin reaching those claiming EITC and ACTC during the first week of March for those who file electronically with direct deposit and there are no issues with their tax returns.

If you want to get your tax refund as fast as possible, the IRS recommends that you e-file your tax return and use direct deposit. Keep in mind that if you e-file, the day that the IRS accepts your return may not be the day that you hit send or give the green light to your preparer. Check your e-filing confirmation for the actual date that the IRS accepts your return.

If you file by paper, it will take longer. Processing times can take more than four to six weeks in the best of times (and these are not the best of times) since the IRS has to manually input data. Don’t forget about postal holidays, too, when counting on the mail. There’s just one official postal holiday during tax season, Monday, February 15 (President’s Day), and one that follows just after tax season, Monday, May 31 (Memorial Day).

Even if you request direct deposit, you may still receive a paper check. Since 2014, the IRS has limited the number of refunds that can be deposited into a single account or applied to a prepaid debit card to three. Taxpayers who exceed the limit will instead receive a paper check. Additionally, the IRS will only issue a refund by direct deposit into an account in your own name, your spouse’s name or both if it’s a joint account. If there’s an issue with the account, the IRS will send a paper check.

If you’re looking for more information about the timing of your tax refund, don’t reach out to your tax professional. Instead, the IRS encourages you to use the “Get Refund Status” tool. Have your Social security number or ITIN, filing status and exact refund amount handy. Refund updates should appear 24 hours after your e-filing has been accepted or four weeks after you mailed your paper return. The IRS expect that the refund tool will be updated for those claiming EITC and ACTC, beginning on February 22, 2021. Otherwise, the IRS updates the site once per day, usually overnight, so there’s no need to check more than once during the day.

If you’re looking for tax information on the go, you can check your refund status with IRS2Go, the official mobile app of the IRS. The app includes a tax refund status tracker.

Remember that the IRS will not contact you by phone or by email regarding your refund. If you receive a call from someone claiming to be from the IRS or a debt collection agency regarding your tax refund, hang up immediately: it is a scam. Follow me on Twitter or LinkedIn. Check out my website

Kelly Phillips Erb

Kelly Phillips Erb Years ago, I found myself sitting in law school in Moot Court wearing an oversized itchy blue suit. It was a horrible experience. In a desperate attempt to avoid anything like that in the future, I enrolled in a tax course. I loved it. I signed up for another. Before I knew it, in addition to my JD, I earned an LL.M Taxation. While at law school, I interned at the estates attorney division of the IRS. At IRS, I participated in the review and audit of federal estate tax returns. At one such audit, opposing counsel read my report, looked at his file and said, “Gentlemen, she’s exactly right.” I nearly fainted. It was a short jump from there to practicing, teaching, writing and breathing tax. Just like that, Taxgirl® was born.

.

Gregg Learning

Once the tax liability has been determined, we must consider the final three items in income tax preparation: tax credits, other taxes, and payments. When an overpayment occurs, the taxpayer has the option of receiving a refund or applying the amount of the overpayment to next year’s estimated tax.

.

More Contents:

SimplyNoted Integrates with PropertyRadar http://www.propertyradar.com – Today[…] Property type Owner occupied Transaction volume per month Estimated equity Assessed value Estimated tax rate More Between the criteria you select to build your lists and the deep insights you get fo […]1

Thoughts on the Beginning by Al Sikes talbotspy.org – Today[…] faced by small businesses, I also noted how big businesses operate within a framework of tax advantage. They retain a variety of international experts to help them minimize taxes. Tax specialists guide them through the intricacies of reduction as they move manufacturing, sales […] intricacies of reduction as they move manufacturing, sales, distribution and even headquarters to tax-advantaged locations. President Biden is recommending a corporate tax increase going from 21% to 28%. Specific tax thresholds can get very complicated and are well beyond these several paragraphs […]0

WeekWatch – 25_01_2021 | St. James’s Place Wealth Management partnership.sjp.co.uk – Today[…] ahead, there are some fears that the chancellor’s rumoured plans to hike the main rate of corporate tax could dampen the recovery […]6

Hydropower Provisions Included in 2021 Appropriations Bill | Troutman Pepper – JDSupra http://www.jdsupra.com – Today[…] Next, the Act extends the production tax credit (PTC) and investment tax credit (ITC) in lieu of PTC through January 1, 2022 at existing rates […]0

WeekWatch – 25_01_2021 | St. James’s Place Wealth Management http://www.hjpcfp.com – Today[…] ahead, there are some fears that the chancellor’s rumoured plans to hike the main rate of corporate tax could dampen the recovery […]0

Investments and Insurance – Popular Private Client – Popular Bank http://www.popularbank.com – Today[…] the benefits of your employer-sponsored plans, a 401(k), 403(b), or 457, and tapping into the other tax-advantaged plans such as IRAs and small business retirement plans, is one of the best ways t […] Not all tax advantages may be available to you […] as they relate to your individual retirement accounts, should be reviewed with your professional tax advisor […]28

— Are financial savings and insurance products safe… cmsgroupca.tumblr.com – Today[…] Tax-free savings account The tax-free savings account is an occupied or seizable savings product, regardless of the kind o […] The people who have a justifiable social insurance number to set money apart from tax-free throughout their lifetime. The benefaction of a tax-free savings account is not conclusive for income tax purposes […]0

Saudi sovereign wealth fund to invest billions to tackle soaring joblessness http://www.middleeasteye.net – Today[…] pandemic and a drop in oil prices prompted the top crude exporter to triple its value-added tax and suspend a monthly allowance to civil servants to rein in a ballooning budget deficit […]0

Thomas Azzara on LinkedIn: Google has no office, no staff and little more than a plain PO Box http://www.linkedin.com – Today[…] ; “We are pleased to tell you that our examination of your tax return(s) for above periods shows no change is necessary in the tax reported.” – Lowrery / Chief Examination Division/IRS (tax reported was 0$) (IRS audit was for Thomas Azzara) Google’s PO Box in Bermuda […] They probably have several companies in Bermuda – a no tax haven. Trade stocks tax-free (Capital Gains Taxes) OK under the Internal Revenue Code for foreign companies […]0

Save The Poudre – Help us save the Poudre from the NISP/Glade Reservoir http://www.savethepoudre.org – Today[…]  If you can afford $100 or $250 or more, that’s great too! All donations are tax deductible Please donate on our website at: http://www […] ” The memo reminds the City Council that the citizens of Fort Collins tax themselves to buy these Natural Areas, most recently by a city-wide vote in 2014 with 82 […] All donations are tax deductible Please donate on our website at: http://www […]49

Strength * Rose Quartz, Aquamarine, Moonstone & Carnelian – crystal-point-gems.com – Today[…] 00 Tax included […]0

School choice legislation on the fast track myemail.constantcontact.com – Today[…] the “Missouri Empowerment Scholarship Accounts Program” and specifies that any taxpayer may claim a tax credit, not to exceed 50% of the taxpayer’s state tax liability, for any qualifying contribution to an educational assistance organization for all tax years beginning on or after July 1, 2022. The cumulative amount of tax credits issued in any one calendar year shall not exceed $50 million […]0

Medicare Advantage Plans (Medicare Part C) | James DeMinno CPA http://www.deminno.tax – Today[…] The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation […]0

OMG: The Right Is Trying to Turn Insurrectionist Snowflake Josh Hawley Into a Free Speech `Martyr’ http://www.dailykos.com – Today[…] that the job of the Republican Party to team up with corporate America to force deregulation and tax cuts on the public […]0

Advancing Innovation to Make the U.S. More Globally Competitive spark.adobe.com – TodayTax Policy Tax policy not only helps drive competitiveness, but is an effective tool to support economic growth […] maintains an internationally competitive tax system, including a competitive and fiscally responsible corporate tax rate. Policymakers also have the opportunity to leverage tax policy to promote growth in high-skilled, highly paid jobs, including by supporting innovation an […] certainty for businesses worldwide and turn the tide against the proliferation of unilateral tax measures that contravene key international tax policy norms and impact the competitiveness of U […]0

Janet Yellen’s Senate confirmation vote to be treasury secretary set for Monday – CBS News http://www.cbsnews.com – Today[…] Yellen on a number of her positions, particularly in the tax policy arena, but she has committed to us that she will work with us on these issues and th […]0

Rémi Belliveau on Lost Classics of Acadian Disco and Rock ’n’ Roll – canadianart.ca – Today[…] When she replies that she’s not only Acadian, but also a proud tax-paying (my terminology) Québécoise (she’d been living in Montreal for almost 20 years by that time) […]43

“It Ain’t Over Till It’s Over” – Newsroom – About.usps.com about.usps.com – Today[…] The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its […]15

PSW Tax Coffee Chat – 2020 Tax Relief Bill – Cvent | Online Registration by Cvent events-meetings.kpmg.com – TodayLegal | Privacy © 2021 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. For more detail about the structure of the KPMG global organization, please visit https://home.kpmg/xx/en/home/misc/governance.html.N/A

Security Summit Alert: New Two-Stage Email Scheme Targets Tax Professionals | Internal Revenue Service http://www.irs.gov – Today[…] 11, 2017 WASHINGTON – The Internal Revenue Service, state tax agencies and tax industry leaders today warned tax professionals to be alert to an email scam from cybercriminals posing as clients soliciting thei […] The tax professional may think they are downloading a potential client’s tax information or accessing a site with the potential client’s tax information […]5

Samoa: Staff Concluding Statement of the 2021 Article IV Mission HTML File http://www.marketscreener.com – Today[…] The surplus in FY2020 was driven by a favorable outturn in tax revenue collection owing to improved tax compliance in advance of the phased rollout of the Tax Invoicing Management System (TIMS) […] through revenue mobilization over the medium term: A holistic approach will be needed by improving tax compliance, increasing excises (e.g., alcohol and tobacco), and broadening the VAT tax base in light of a gradual revenue loss expected from the PACER-Plus agreement […]0

HMRC waives penalty for late filing of self-assessments http://www.bbc.co.uk – Today[…] The tax agency said more than 8.9 million customers have already filed their tax returns. However, taxpayers are still required to pay their tax bills by 31 January […] However, they will need to file their 2019-2020 tax return first. People who have tax bills over £30,000, or who need longer than 12 months to pay their bill, are advised to call HMRC […]0

Money Management – Webster First Federal Credit Union http://www.websterfirst.com – Today[…] more Search by keyword or amount, or filter by account and date to quickly find specific entries Tax deductible transactions can be marked throughout the year and filtered for easy access come tax time               Keep track of spending and set budgets Use a visualization of spendin […]0

HOT JOBS & COOL JOBS: RN/LPN CHARGE NURSE 10PM 630AM 5000 SIGN ON BONUS BIRMINGHAM AL USA http://www.e-physician.info – Today[…]  Pay package is based on 12 hour shifts and 36 hours per week (subject to confirmation) with tax  […]  Pay package is based on 12 hour shifts and 36 hours per week (subject to confirmation) with tax  […]0

Paychex | Paychex-IFA Empower Hour pages.paychex.com – Today[…] of the Paycheck Protection Program (PPP), changes to the employee retention and paid leave tax credits, and more […]

College Funding Changes In The Pandemic Relief Bill

There are several student financial aid provisions in the pandemic relief package that was included in the Consolidated Appropriations Act of 2021 that passed the House and Senate on Monday, December 21, 2020.

Student Loan Relief

Student loan borrowers are disappointed that the legislation did not include an extension to the student loan payment pause and interest waiver, nor did it provide any student loan forgiveness.

The payment pause and interest waiver is set to expire on January 31, 2021. President-elect Joe Biden will be able to extend it further after he takes office on January 20, 2021. Several possible extension dates have been floated, including April 1, April 30 and September 30, but Joe Biden has not yet said anything specific about the extension, just that it is needed.

Nevertheless, there are some changes in the legislation that affect student loan borrowers. In particular, the tax-free status of employer-paid student loan repayment assistance programs (LRAPs), which was set to expired on December 31, 2020, has been extended for five years through the end of 2025. Such LRAPs will be exempt from income and FICA taxes for both the employee and the employer.

PROMOTED DP World BrandVoice | Paid Program Track And Trace Technology Is The Disruption Automotive Logistics Needs UNICEF USA BrandVoice | Paid Program Young Changemakers Are Shaping A Better World Grads of Life BrandVoice | Paid Program How Reimagining Employment Practices Can Advance Racial Justice

SULA, a complicated set of limits on subsidized Federal Direct Stafford loans, has been repealed. SULA mostly affected students who transferred from a 4-year college to a 2-year college.

In addition, there have been a few changes concerning the U.S. Department of Education’s Next Generation Processing and Servicing Environment (NextGen) for federal student loans.

  • New student loan borrower accounts must be allocated to loan servicers based on their past performance and servicing capacity.
  • Borrower accounts must be reallocated from servicers for “recurring non-compliance with FSA guidelines, contractual requirements, and applicable laws, including for failure to sufficiently inform borrowers of available repayment options.” Applicable laws include consumer protection laws.
  • NextGen must allow for multiple student loan servicers that contract directly with the U.S. Department of Education.
  • NextGen must incentivize more support to borrowers at risk of delinquency or default.
  • Borrowers must be allowed to choose their loan servicer when they consolidate their federal loans.
  • The U.S. Department of Education must improve transparency through expanded publication of aggregate data concerning student loan servicer performance.

MORE FOR YOUTrump May Not Sign Stimulus Bill Without $2,000 Stimulus Checks; Here’s What Could Happen NextBiden May Support Only $10,000 In Student Loan ForgivenessBiden Says He Is “Unlikely” To Cancel $50,000 In Student Loan Debt By Executive Order

Changes in College Tuition Tax Breaks

The legislation changes the income phaseouts for the Lifetime Learning Tax Credit (LLTC) to be the same as the income phaseouts for the American Opportunity Tax Credit (AOTC), starting with tax years that begin after December 31, 2020.

The Lifetime Learning Tax Credit will start phasing out at $80,000 for single filers and $160,000 for taxpayers who file as married filing jointly. The tax credit is fully phased out at $90,000 (single) and $180,000 (married filing jointly). Married taxpayers who file separate returns are not eligible.

For comparison, the 2020 income phaseouts for the LLTC were $59,000 to $68,000 (single) and $118,000 to $136,000 (married filing jointly).

The new income phaseouts will not be adjusted for inflation.

In addition, the legislation repeals the Tuition and Fees Deduction, effective with tax years that begin in 2021. This is a permanent repeal, so the Tuition and Fees Deduction will not be resurrected by the next tax extenders bill.

New Funding for Higher Education Emergency Relief Fund

The $81.88 billion for the Education Stabilization Fund includes

  • $54.3 billion for the Elementary and Secondary School Emergency Relief Fund
  • $22.7 billion for the Higher Education Emergency Relief Fund (HEERF)
  • $4.05 billion for the Governor’s Emergency Education Relief Fund, of which $2.75 billion has been earmarked for Emergency Assistance to Non-Public Schools

The Higher Education Emergency Relief Fund previously received $16 billion as part of the CARES Act.

The allocation formula for the HEERF funding is more complicated than the one in the CARES Act, but the allowable uses are similar. Public and private non-profit colleges are required to use at least half of the money for financial aid grants to students. Private for-profit colleges are required to use all of the money for financial aid grants to students. Colleges must provide at least the same amount of emergency financial aid grants to students as they did under the CARES Act provisions, even if their total allocation is lower.

The emergency financial aid grants to students can be used for any element of the student’s cost of attendance or for emergency costs related to the pandemic, such as “tuition, food, housing, health care (including mental health care), or child care.”

The grants must be prioritized to students with exception financial need, such as Pell Grant recipients.

The emergency financial aid grants to students are tax-free.

Most College Students Remain Ineligible for Stimulus Checks

Most college students will remain ineligible for the recovery rebate checks, also known as the stimulus checks.

The legislation includes the same restriction that limits the $600 per qualifying child to children age 16 and younger. Only 0.1% of undergraduate students are age 16 or younger.

College students who are under age 24 are also ineligible, because they can be claimed as a dependent on someone else’s federal income tax return. The remain ineligible even if they are not claimed on someone else’s tax return.

A college student might qualify if they are married and file a joint return with their spouse or if they provide more than half of their own support. About 15% of undergraduate students are married. College students who are 24 years old or older may also qualify. More than 40% of undergraduate students are 24 years old or older.

College students can still claim the $1,200 stimulus checks from the CARES Act in addition to the new $600 stimulus checks, if they are eligible.

Increase in the Maximum Pell Grant

The maximum Federal Pell Grant has been increased to $6,495 for the 2021-2022 academic year.

Eligibility criteria will be pegged to a multiple of the poverty line starting with the 2023-2024 academic year. Students will be eligible for the maximum Pell Grant if they and their parents/spouse, as applicable, are not required to file a federal income tax return or if their adjusted gross income (AGI) is less than 175% to 225% of the poverty line. The higher threshold is reserved for households involving a single parent.

FAFSA Simplification

The legislation simplifies the Free Application for Federal Student Aid (FAFSA) starting with the 2023-2024 academic year. The new FAFSA reduces the number of questions on the form by two-thirds, from 108 questions to about three dozen questions. Follow me on Twitter. Check out my website or some of my other work here

Mark Kantrowitz

Mark Kantrowitz

I am Publisher of PrivateStudentLoans.guru, a free web site about borrowing to pay for college. I am an expert on student financial aid, the FAFSA, scholarships, 529 plans, education tax benefits and student loans. I have been quoted in more than 10,000 newspaper and magazine articles about college admissions and financial aid. I am the author of five bestselling books about paying for college and have seven patents. I serve on the editorial board of the Journal of Student Financial Aid, the editorial advisory board of Bottom Line/Personal, and am a member of the board of trustees of the Center for Excellence in Education. I have previously served as publisher of Savingforcollege.com, Cappex, Edvisors, Fastweb and FinAid. I have two Bachelor’s degrees in mathematics and philosophy from the Massachusetts Institute of Technology (MIT) and a Master’s degree in computer science from Carnegie Mellon University (CMU)

.

.

University of California Television (UCTV)

How to pay for college is a pressing question for all applicants from the class of 2020. COVID-19 has caused financial uncertainty and many are having to rethink their plans. Jodi Okun, an expert in financial aid, joins Steven Mercer to talk about how the pandemic is impacting financial aid awards, what to do if your family’s financial situation has changed, and how to plan for the future in uncertain times. [Show ID: 35963] More from: STEAM Channel (https://www.uctv.tv/steam) UCTV is the broadcast and online media platform of the University of California, featuring programming from its ten campuses, three national labs and affiliated research institutions. UCTV explores a broad spectrum of subjects for a general audience, including science, health and medicine, public affairs, humanities, arts and music, business, education, and agriculture. Launched in January 2000, UCTV embraces the core missions of the University of California — teaching, research, and public service – by providing quality, in-depth television far beyond the campus borders to inquisitive viewers around the world. (https://www.uctv.tv)

Stimulus Check Qualification Rules Could Change With a Second Payment

Congress is scrambling to piece together another relief package before the end of the year that would, if some legislators have their say, include a second economic stimulus check for individuals and families who meet the requirements.

Sen. Bernie Sanders, an independent, and Sen. Josh Hawley, a Republican, are looking to modify a $908 billion plan with an amendment that would authorize a second check for up to $1,200. The unamended proposal doesn’t include another direct payment. If Sanders and Hawley’s amendment is successful, the new payment would likely follow the same outlines of the first stimulus check for speed and simplicity, but even minor changes could have a significant impact for millions.

Another new proposal, this time from the White House, would provide $600 apiece for each qualifying adult and child, Though it’s less likely we’ll see this proposal become law, if it did it would clearly affect how much money a household could get, by halving the share per qualifying adult and increasing it by $100 per eligible child dependent

Even if no stimulus check is approved in 2020, the discussions happening now could impact the stimulus check conversation in early 2021. There’s clearly enough support for a second round of aid before there are enough available doses of the COVID-19 vaccine to inoculate the US population.

Read on for more information about what may happen to stimulus eligibility now. We update this story often.

How the qualifications could change with a new bill

While many members of Congress agree on the need for more aid, they differ on the specifics, and the two sides continue to discuss who needs assistance and how much to spend. Based on proposals that’ve been on the table this fall, here’s what lawmakers could do (or have already done):

Update the definition of a dependent: The CARES Act capped eligible dependents at kids age 16 and younger. One proposal this summer expanded the definition to any dependent, child or adult, you could claim on federal taxes. That means families with older kids or older adults at home could potentially see $500 more in their check total per individual if that proposal is adopted.

Read more: Nobody can take your stimulus check away, right? Not quite

money-dollars-bills-sock-american-flag
If the definition of a dependent changes, your family could benefit. Angela Lang/CNET

Raise the amount of money per child dependent: One White House proposal from October would’ve kept the definition of a child dependent used in the CARES Act but increased the sum per individual to $1,000 on the final household check. (Based on that, here’s how to estimate your total stimulus money and here’s the IRS’ formula for families.)

The White House’s new Dec. 8 proposal would reportedly raise the sum for each qualifying child to $600, up from $500 in the CARES Act.

Stop seizing overdue child support: The Democrats this summer pushed to let a parent who owed child support receive a payment; the original CARES Act allowed the government to redirect payments to cover overdue support.

Send checks to people who are incarcerated: After months of back and forth, the IRS is sending checks to those who are incarcerated and eligible for a payment. A Republican plan this summer would’ve excluded the payments.

Include noncitizens: The CARES Act made a Social Security number a requirement for a payment. Other proposals would’ve expanded the eligibility to those with an ITIN instead of a Social Security number because they’re classified as a resident or nonresident alien. A Republican plan this summer would’ve excluded those with an ITIN.

Who could qualify for a second stimulus check

Qualifying groupLikely to be covered by the final bill
IndividualsAn AGI of less than $99,000 (Same as CARES)
Head of householdAn AGI of less than $146,500 (Same as CARES)
Couple filing jointlyAn AGI less than $198,000 (Same as CARES)
Dependents of any ageNo limit (HEALS proposal; up to 3 in Heroes)
US citizens living abroadYes, same as CARES
Citizens of US territoriesLikely, with payments handled by each territory’s tax authority (CARES)
SSDI and tax nonfilersLikely, but with an extra step to file (more below)
Uncertain statusCould be set by court ruling or bill
Incarcerated peopleExcluded under CARES through IRS interpretation, judge overturned
Undocumented immigrantsQualifying “alien residents” are currently included under CARES
Disqualified groupUnlikely to be covered by the final bill
Noncitizens who pay taxes (ITIN)Proposed in Heroes, unlikely to pass in Senate
Spouses, kids of ITIN filersExcluded under CARES, more below
People who owe child supportIncluded in Heroes proposal, but excluded under CARES

Would the income limits be similar with another check?

Under the CARES Act, here are the income limits based on your adjusted gross income for the previous year that would qualify you for a stimulus check, assuming you met all the other requirements. (More below for people who don’t normally file taxes.) With the amendment proposed by Sanders and Hawley on Dec. 10, the requirements guidelines would follow those set out in the CARES Act.

  • You’re a single tax filer and earn less than $99,000.
  • You file as the head of a household and earn under $146,500.
  • You file jointly with a spouse and earn less than $198,000 combined.

What role do my taxes play in how much I could get? What if I don’t file taxes? 

For most people, taxes and stimulus checks are tightly connected. For example, the most important factor in setting income limits is adjusted gross income, or AGI, which determines how much of the total amount you could receive, be it $600 or $1,200 for individuals and $1,200 or $2,400 for married couples (excluding children for now).

Our stimulus check calculator can show you how much money you could potentially expect from a second check, based on your most recent tax filing and a $1,200 per person cap. Read below for your eligibility if you don’t typically file taxes.

coins-measuring-spoons
How much stimulus money you could get depends on who you are. Angela Lang/CNET

What should retired and older adults know?

Many older adults, including retirees over age 65, received a first stimulus check under the CARES Act, and would likely be eligible for a second one. For older adults and retired people, factors like your tax filingsyour AGI, your pension, if you’re part of the SSDI program (more below) and whether the IRS considers you a dependent would likely affect your chances of receiving a second payment. 

If I share custody or owe child support, how does that affect eligibility?

Due to a specific rule, if you and the other parent of your child dependent alternate years claiming your child on your tax return, you may both be entitled to receive $500 more in your first stimulus check, and in the second if that rule doesn’t change.If you owe child support, your stimulus money may be garnished for arrears (the amount you owe). https://playlist.megaphone.fm/?e=CBS4695642448&light=true

I haven’t submitted my federal tax return for at least two years. Can I still get money?

People who weren’t required to file a federal income tax return in 2018 or 2019 may still be eligible to receive the first stimulus check under the CARES Act. If that guideline doesn’t change for a second stimulus check, this group would qualify again. Here are reasons you might not have been required to file:

  • You’re over 24, you’re not claimed as a dependent and your income is less than $12,200.
  • You’re married filing jointly and together your income is less than $24,400.
  • You have no income.
  • You receive federal benefits, such as Supplemental Security Income or Social Security Disability Insurance. See below for more on SSDI.

With the first stimulus check, nonfilers needed to provide the IRS with some information before they could receive their payment. (If you still haven’t received a first check even though you were eligible, the IRS said you can claim it on your taxes in 2021.) This fall, the IRS attempted to contact 9 million Americans who may’ve fallen into this category but who haven’t requested their payment. Those in this group can claim their payment on next year’s taxes.

I’m part of the SSI or SSDI program. Am I eligible to get a stimulus check?

Those who are part of the SSI or SSDI program also qualify for a check under the CARES Act. Recipients wouldn’t receive their payments via their Direct Express card, which the government typically uses to distribute federal benefits, but through a non-Direct Express bank account or as a paper check. SSDI recipients can file next year to request a payment for themselves and dependents.

For more, here’s what we know about the major proposals for another stimulus package. We also have information on unemployment insurance, what you can do if you’ve lost your job and what to know about evictions.

Coronavirus updates

First published on June 25, 2020 at 4:15 a.m. PT.BudgetingTaxesPoliticsPersonal Finance How To

By: Clifford Colby, Julie Snyder, Katie Conner

.

.

Points Pointers

WILL THERE BE A SECOND STIMULUS CHECK // HERE’S YOUR SECOND STIMULUS CHECK UPDATE FOR MAY 14TH. WILL YOU QUALIFY FOR THE SECOND ROUND OF STIMULUS CHECKS? THERE ARE NEW RULES Robinhood (FREE Stock): https://bit.ly/2VMmJDP WeBull (2 FREE Stocks): https://bit.ly/2JFiO51 Travel Hacking Course (Deep Discount): http://bit.ly/33vkkQc Download my FREE 10 Step Award Travel Guide: http://pointspointers.com/free-award-… MERCH STORE: https://pointspointers.com/merch-store#secondstimuluscheck#stimulusupdate —— As an Amazon Associate I earn from qualifying purchases. Nice multicard wallet: https://amzn.to/2UZ2PTy Passport Cover: https://amzn.to/2rOdTWd World Map Passport Cover: https://amzn.to/2QGyjiX Filmed this video on this great camera kit: https://amzn.to/2mwp6bA Amazing small vlogging camera: https://amzn.to/2ScIRTy Bendy tripod: https://amzn.to/2UXhPl5 ——- Instagram: http://www.instagram.com/pointspointers Twitter: http://www.twitter.com/pointspointers Facebook: http://www.facebook.com/pointspointers ———

Why You Should Keep Tax Records For More Than Three Years

1

A Pennsylvania citizen, who will be identified here as “P,” has a bone to pick with the collections agency that handles taxes for his municipality. P says he duly paid his 2015 local income tax, but just a few weeks ago got a nasty notice calling him a delinquent and demanding immediate payment of more than $2,000 in taxes and penalties.

P asks: Isn’t there a three-year limit on tax audits? What am I supposed to do if my bank can’t locate a five-year-old cancelled check? Do I have to pay the taxes twice? Short answer: Yes. If you don’t have good records you can get nailed for taxes you don’t really owe. Three years of documents won’t cut it. Seven years is more like it. Some tax records should be kept on hand until you’re dead.

Barry Dolowich, a CPA in Monterey, California, is representing a Nevada citizen who just got a dunning notice from California’s notoriously aggressive Franchise Tax Board. What did this taxpayer do wrong? He inherited a house in California and sold it, at a loss, in 2015. He didn’t file a California income tax return for that year. The state wants him to fork over $30,000-plus on the supposition that the entire proceeds were profit.

David Caplan, a CPA in Lafayette Hill, Pennsylvania, is fighting for a taxpayer from whom the Internal Revenue Service wants to extract approximately $35,000. This client, now in her 80s, had a small business whose withholding taxes were handled by a payroll processor. It took the sleepy IRS a decade to figure out that the processor was embezzling money and forging powers of attorney in order to keep clients in the dark about delinquency notices. The crook is now in jail and evidently has scant assets. The former business owner paid the tax money once and may have to pay again.

There is indeed a three-year rule on tax audits, but it doesn’t provide the protection you think it does. Normally the IRS has three years from a return’s due date (or when you filed, if you got an extension) in which to challenge your numbers. Many states copy that rule; a handful, including California, stretch out the audit period to four years.

But there are exceptions. Three years becomes six if the tax collector can show that there is a “substantial understatement” of your liability. For the federal government, “substantial” means by 25% or more; state rules vary on this point.

The other exception is if no return was filed. On the theory that a nonfiler is akin to a fugitive bank robber, undeserving of having the clock run on a statute of limitations while he is in hiding, the three-year period does not start until the return comes in.

This presents a potential hazard for people who don’t retain yellowed records. A Pennsylvania township could in principle send out a notice declaring, “We were just going through some old punch cards and can’t find a record of your 1997 return. Please send in $2,000 plus 22 years of penalties.”

Matthew Melinson, a state and local tax partner in Grant Thornton’s Philadelphia office, says he hasn’t witnessed anything that egregious, but has seen states trying to collect ten years of tax from nonfilers. Given that records are now electronic, he says, you should keep returns for a long time—seven years, at least.

Herewith a nine-point guide to record retention:

1. Keep copies of income tax returns and proof of tax payments as long as you can.

2. Discard supporting documents (like receipts for business expenses and charitable donations) after seven years. That covers you for six years beyond your filing date.

3. Keep records of asset costs for seven years after you dispose of the asset, recommends Stephanie Pervez, who leads the private-clients practice at CohnReznick in New York City. If you bought a house in 1990, remodeled it in 2000, and sold it in 2019, you’d keep both sets of closing documents and the remodeler’s bill until 2026.

728x90

4. Keep support for carryforward items (such as for capital losses) until seven years after using up the carryforward. Says David Klasing, an Irvine, California, attorney representing clients with big tax headaches: “A lot of times they won’t contest the original accrual of a net operating loss until you try to use it.”

5. Keep copies of gift tax returns forever. Your executor may have to attach them to an estate tax return, Pervez says.

6. Maximize the value of your health savings account by preserving both the assets and medical receipts for a long time. Instead of using the HSA to cover co-pays and other costs, you pay them out of your checking account and let the HSA grow. In retirement, you pull the money out, making the withdrawal tax-free by matching it to past medical costs, which can stretch back for decades. The strategy only works if you can retrieve the receipts.

7.  Consider filing a nonresident return, perhaps one showing a small amount of income, in states where you have some business connection. That starts the clock running on an audit period, and might protect you from an open-ended tax grab going back a decade. California, in particular, is known for an expansive notion of what constitutes local income. It went after a scriptwriter living in Arizona because the scripts were used by California film companies.

8. Keep proof of filing. Melinson has his clients retain either a certified mail receipt for a paper return or an email confirming acceptance of an e-filed return.

Here’s another way to establish that a return was received. Instead of having all your refund applied to the next year’s estimated tax, direct $20 of it into your bank account. Keep the bank statement.

9. Keep an eye on your tax preparer, or payroll tax handler. Tax collectors are predictably reluctant to give a break to victims of dishonest intermediaries, lest taxpayers seek out sketchy ones in order to lower their tax bills. But if you can document your diligence you might get mercy.

What will become of the forlorn taxpayers cited above? Taxpayer P is the victim of Pennsylvania’s quirky local-tax system. Much in the manner of a feudal king farming out tax collection to independent agents, municipalities delegate enforcement to private-sector firms, sometimes dropping the ball in the hand-off. For P, the middeman is Kratzenberg & Associates, doing business as Keystone Collections Group. A Keystone executive says this taxpayer can get his problem quickly resolved if he has the right documents.

The Nevadan with the house in California? He will probably owe the state little. The house, with a cost basis stepped up to the value on the owner’s death, was clearly sold at a loss. The worst that the Franchise Tax Board can do is to impose a failure-to-file penalty, and accountant Dolowich hopes this penalty will be waived.

The retiree with the ancient payroll tax liability may be out of luck. Accountant Caplan says the IRS agreed to a reprieve for her and some of the other victims on the hook collectively for at least $3 million. Then the agency changed its mind. She and 100 or so other taxpayers are in limbo.

Follow me on Twitter.

I aim to help you save on taxes and money management costs. I graduated from Harvard in 1973, have been a journalist for 45 years, and was editor of Forbes magazine from 1999 to 2010. Tax law is a frequent subject in my articles. I have been an Enrolled Agent since 1979.

Source: https://www.forbes.com

How long should you keep your tax records? The IRS website has a page that claims to answer this question: https://www.irs.gov/businesses/small-…

SBA Clarifies Its PPP Loans in 4 Important Ways

1

Hundreds of thousands of small businesses that took Paycheck Protection loans finally have a path to getting their loans forgiven, but much delayed guidance released by the federal government is nowhere near final.

On Friday, the U.S. Treasury and Small Business Administration released an 11-page loan forgiveness application with instructions on how to complete it. While the document clarifies a number of administrative queries, such as when, exactly, does the eight-week covered period begin, it fails to address several key issues. Those include whether bonuses can count as cash compensation, and how quickly forgiveness will work.

The agencies also noted that the SBA would “soon” issue regulations and guidance to further assist borrowers and lenders. There’s no timeline for this next release. The good news is, there’s no need to rush to apply for forgiveness, says Ami Kassar, the founder and CEO of MultiFunding, a small-business loan adviser based in Ambler, Pennsylvania.

“You won’t be able to apply for forgiveness for at least 56 days after you received your PPP disbursement,” he says, “and in many cases, it will not make sense to apply until after June 30,” the date for when the covered period ostensibly ends.

In the meantime, here are four ways the application provides more clarity for business owners with PPP loans.

1. Shows a more flexible view of the eight-week covered period

The eight-week, or 56-day, covered period begins as soon as the loan funds reach a borrower’s account. But in practice that doesn’t always make sense–particularly for businesses whose pay periods may not correspond to that loan disbursement date. The forgiveness application allows some wiggle room. For “administrative convenience,” the SBA says borrowers can now elect an “alternative payroll covered period,” which would be timed with the first day of the next pay period following their PPP loan disbursement date.

For example, the SBA notes that if a business owner received her PPP loan proceeds on Monday, April 20, and the first day of her company’s next pay period begins Monday, April 27, that constitutes the first day of the alternative payroll. Note that the alternative payroll covered period does not apply to non-payroll costs.

2. Affirms that costs incurred–but not paid–during the covered period count toward forgiveness

Businesses don’t have to contort their normal bill-paying and payroll processes to conform with PPP. For business owners who pay rent on the first of the month, but don’t get their PPP disbursement until mid-month, this next point should be reassuring. The forgiveness loan application says eligible, non-payroll costs must be paid during the eight-week covered period or incurred during that time and paid on or before the next regular billing date, even if the billing date is after the covered period. Similarly, eligible payroll costs incurred but not paid during the eight-week period are covered if paid on or before the next regular payroll date.

 

3. Clarifies the timing of when a PPP loan must be spent

Prior to the application’s release, it wasn’t clear if a business owner had to spend the full amount of her PPP loan within the eight-week covered period to receive any forgiveness. Indeed, strict interpretations held that loan forgiveness depended on a business owner’s ability to spend 75 percent of a loan’s proceeds on payroll costs within the eight-week covered period.

That’s not the case. Instead, the application confirms that any amount spent during the covered period on allowable expenses, like payroll costs or rent, may be forgiven. But not all of a loan’s proceeds must be exhausted during the eight-week period. “There’s still a significant incentive to have the money spent over the eight weeks” to get a loan forgiven, says Chuck Morton, partner and co-chair of the corporate group at Venable, a Washington, D.C.-based law firm. “What this says now is that at least it’s not all or nothing.”

4. Confirms the level of reduced loan forgiveness for noncompliance

If a company’s head count or payroll costs don’t match pre-crisis levels, the amount of forgiveness will fall in most cases. Prior to the current application’s release, however, accounting firms were merely guessing about how much forgiveness would be reduced if a business failed to meet those two requirements. The actual calculation is based on a number of factors such as employee head count, if lower than pre-crisis levels, and employee pay, if wages drop by more than 25 percent for workers who earned $100,000 or less in 2019.

“The penalty discussion is new,” says Kassar, and “it’s not something you can just explain in five minutes.” Indeed, there’s a complicated worksheet for calculating forgiveness, but at least now the numbers are firm and businesses can ascertain what their level of forgiveness might look like in their own unique situations, he adds.

GM-980x120-BIT-ENG-Banner
The SBA has put out the Loan Forgiveness Application for the PPP program. With instructions it is 11 pages and it requires a lot of payroll information in order to calculate forgiveness. Anyone who needed help preparing the original PPP application is definitely going to need help with this as it is significantly more complicated. The good news is that the SBA has finally give guidance on what payroll “costs incurred and payments made” actually means. They are saying that it refers to wages and salaries earned during the eight week covered period, and paid either during the covered period or on or before the regular payroll date immediately following the covered period.
%d bloggers like this: