Div-An Tax Services

Div-An Tax Services Income Tax and Accounting Services

06/14/2021

IRS Notifying Families Who May Qualify for Advance CTC Payments – Did You Know?

The American Rescue Plan Act of 2021 made three key changes to the Child Tax Credit (CTC) for tax year 2021. First, it increased the age limit for qualifying children to 17. Second, it raised the maximum credit from $2,000 per child up to $3,600 per child under 6, and $3,000 per child of age 6 through 17. Finally, it authorized the U.S. Treasury to make monthly advance payments of the 2021 credit beginning this July.

CTC advance payments will be sent to millions of taxpayers by check or direct deposit on the 15th of July, September, October, November and December, as well as on August 13th. The maximum payment amount will be $300 per child under 6, and $250 per child of age 6–17.

The IRS recently mailed letters to over 36 million U.S. households to notify them of their potential eligibility for these monthly payments. In most cases, the IRS determined possible eligibility based on taxpayers' 2020 tax returns, or information they provided via the Non-Filers Tool for 2020 stimulus payments. In cases where a person has not yet filed a 2020 return or their return has not been processed, the IRS used their 2019 return instead.

Most eligible taxpayers do not need to take any action to begin receiving advance CTC payments. However, those who have not filed a 2019 or 2020 federal tax return should file as soon as possible to ensure that they get payments if they qualify. You can submit a 2020 return to qualify for CTC payments even if you owe no tax and usually do not have to file IRS returns.

In the coming weeks and months, the IRS will also add a number of online tools to help ensure that all eligible taxpayers receive their advance CTC payments. These will include an Update Portal to provide the IRS with information on changes to your income or family size, an opt-out tool and a tool to determine your eligibility for the credit.

09/16/2020

Unemployment Benefits Are Taxable Income – Did You Know?

Due to the economic impact of the COVID-19 (coronavirus) pandemic, individuals may have had to file for Unemployment Insurance (UI) benefits for the first time. These benefits include the federal Pandemic Unemployment Assistance (PUA) program created under the CARES Act, which provides an additional $600 per week to many UI benefits recipients. For individuals receiving UI payments in 2020, it is important to understand the tax treatment of those benefits.

Both state and federal unemployment benefits payments are generally taxed as ordinary income by the IRS. As is the case with most regular income sources, recipients of these benefits are required to make tax payments throughout the year. One way that taxpayers can meet this requirement is to request that tax be withheld from their UI payments, which can be done in most states by filing Form W-4V with the state's unemployment benefits office.

If no tax is withheld from their UI payments, taxpayers may need to make quarterly estimated tax payments in order to avoid a large tax bill next spring, which could include penalties and interest charges. A tax professional can help UI payment recipients determine whether estimated payments are needed, and how much to pay. The estimated tax payment deadline for the first two quarters of 2020 was July 15, but if an individual missed that deadline, penalties can still be minimized by making a payment as soon as possible.

Even if tax is withheld from UI payments, the amount withheld may be incorrect if a person's benefit amount differs from their salary while working. To avoid an unpleasant tax surprise next spring, taxpayers can use the IRS Withholding Estimator tool (link below) to calculate the appropriate withholding amount, and file an updated Form W-4V to request additional withholding if necessary. UI benefits recipients should also do a second checkup with the Withholding Estimator after returning to work, to ensure that their paycheck withholding is accurate going forward.

IRS Withholding Estimator tool: https://www.irs.gov/individuals/tax-withholding-estimator

06/25/2020

Discarded or Lost COVID-19 Stimulus Prepaid Debit Cards – Did You Know?

In addition to direct deposits and paper checks, the IRS is sending some Coronavirus Economic Impact Payments (EIPs, also called stimulus payments) to eligible Americans by prepaid debit card. Because these debit cards are not sent out in standard U.S. Treasury envelopes, some recipients may have mistaken them for junk mail and thrown them away. Fortunately, if you accidentally discarded an EIP prepaid debit card, you can request a free replacement.

EIP cards arrive in a plain envelope from Money Network Cardholder Services. The front of the card displays a VISA logo, while the back shows a MetaBank logo and the title “Money Network.” If you believe you may have received an EIP card and thrown it out, call Money Network at 1-800-240-8100 and choose the “Lost or Stolen Card” option. The bank will deactivate your original card and send you a new one. The first replacement card is free, but a fee of $7.50 will be charged for any subsequent replacement cards.

If you qualify for an EIP but your payment has not yet been sent, you may be able to request that your payment be added to a prepaid debit card you already have. Visit the EIP Get My Payment portal or Non-Filers: Enter Payment Info Here portal to learn more (links are below).

Get My Payment portal (for those required to file federal income tax returns): https://www.irs.gov/coronavirus/get-my-payment
Non-Filers: Enter Payment Info Here portal: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here
EIP Card Website: https://www.eipcard.com/

04/21/2020

Coronavirus-related Tax Scams – Did You know?

The IRS warns everyone to watch out for scam phone calls, emails and text messages related to COVID-19 (coronavirus) tax relief programs during the spring of 2020. This new wave of phishing attempts and other criminal activity centers on the Economic Impact Payments (EIPs) that the IRS is currently distributing to many U.S. taxpayers. The scammers might incorrectly refer to these payments as “Stimulus Checks” or “Stimulus Payments.”

As a reminder, most taxpayers do not need to take any action in order to receive their EIPs. The IRS will NOT call, email or text you to request private information such as your address or bank account number. If anyone claiming to represent the IRS requests such information from you, asks you to sign over your EIP check, or suggests that they can get your EIP to you faster, you should immediately hang up or delete the message. You can also help the IRS to identify, track down and prosecute perpetrators by forwarding any suspicious emails you receive to [email protected].

If you are unsure whether a call or message you receive is legitimate, treat it as a scam and then contact the IRS for more information. You will not be punished for hanging up on an IRS agent because you believed that the call was fraudulent. Note that although most IRS taxpayer assistance phone services are temporarily suspended due to COVID-19, call centers will reopen as soon as possible. In the meantime, you can still email the IRS and/or find regular updates on coronavirus tax relief programs at https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments.

If you wish to provide the IRS with information such as an updated mailing address to ensure that you receive your EIP as quickly as possible, you should ONLY do so through the official IRS Economic Impact Payments portal, https://www.irs.gov/coronavirus/economic-impact-payments.

04/16/2020

New IRS Tools for Faster Delivery of Economic Impact Payments – Did You Know?

The IRS has launched two new web portals to help some taxpayers receive their COVID-19 Economic Impact Payments (EIPs) more quickly. Remember that the vast majority of Americans who filed a 2018 or 2019 federal income tax return, or receive Social Security or Railroad Retirement benefits, do not need to take any action in order to receive their EIPs. If you provided the IRS with bank account information on your most recent tax return or receive benefits by direct deposit, your EIP will be automatically deposited to your account. Otherwise, the IRS will mail an EIP check to the most recent mailing address you provided.

You can use the new “Get My Payment” portal to:

- Learn the amount of your EIP
- Check the status of your payment
- Provide direct deposit banking information to the IRS if you have not previously done so
- Update your mailing address if you have moved and prefer to receive your EIP by check

In order to check the status of your payment, you will need your social security number (SSN), date of birth, and the mailing address shown on your most recent federal tax return. To provide bank account information for direct deposit, you will also need your adjusted gross income (AGI) from your most recent federal tax return (2018 or 2019), the refund amount or amount you owed on that return, and your bank routing number, account type, and account number.

NOTE: If the IRS has already scheduled the delivery of your EIP, you will not be able to use Get My Payment to update your bank account information.

If you are not required to file federal income tax returns (for example, because of an individual gross income below $12,200) and do not receive Social Security or Railroad Retirement benefits, you may need to complete a simple online form in order to receive your EIP. The necessary form is called “Non-Filers: Enter Payment Info Here.”

IRS portals for EIPs:

Economic Impact Payments: https://www.irs.gov/coronavirus/economic-impact-payments

Get My Payment & Status (for those who file federal returns and other automatic EIP recipients): https://www.irs.gov/coronavirus/get-my-payment

Non-Filers: Enter Payment Information Here (for those who do not file federal returns and may not automatically receive their EIPs) https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

04/07/2020

IRS issues warning about Coronavirus-related scams; watch out for schemes tied to economic impact payments



WASHINGTON — The Internal Revenue Service today urged taxpayers to be on the lookout for a surge of calls and email phishing attempts about the Coronavirus, or COVID-19. These contacts can lead to tax-related fraud and identity theft.
"We urge people to take extra care during this period. The IRS isn't going to call you asking to verify or provide your financial information so you can get an economic impact payment or your refund faster," said IRS Commissioner Chuck Rettig. "That also applies to surprise emails that appear to be coming from the IRS. Remember, don't open them or click on attachments or links. Go to IRS.gov for the most up-to-date information."
Taxpayers should watch not only for emails but text messages, websites and social media attempts that request money or personal information.
Read More

04/07/2020

IRS Economic Impact Payments – Did You Know?

As part of its COVID-19 (coronavirus) tax relief program, the IRS will begin mailing Economic Impact Payments to many US taxpayers by the end of April. If you filed a 2018 or 2019 tax return, your payment will be sent automatically – no action is required on your part.

Senior citizens, recipients of social security disability benefits, and railroad retirees who are not required to file tax returns will also receive their payments automatically. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to those recipients who are not required to file a tax return and did not file a return for 2018 or 2019.

Individuals with an adjusted gross income (AGI) of up to $75,000 will receive payments of $1,200, while joint filers with a combined AGI of up to $150,000 will receive $2,400. Many taxpayers will also receive a payment of $500 for each qualifying dependent child. Payment amounts decrease for taxpayers with higher incomes; taxpayers without children who have AGIs above $99,000 ($198,000 for joint filers) are not eligible to receive Economic Impact Payments.

If you included bank account information for direct deposit on your most recent tax return, you will receive your payment by direct deposit. Otherwise, a check will be mailed to the address shown on your 2019 return, or your 2018 return if you have not yet filed for tax year 2019. The US Treasury also plans to open an online portal to allow taxpayers who have not previously provided direct deposit information to the IRS to do so if they wish.

If you are required to file tax returns and have not yet filed for 2018 or 2019, you must file at least one of these returns in order to receive your payment. If you are concerned about exposure to COVID-19, these Economic Impact Payments will be available throughout the rest of 2020. A tax advisor may also be able to provide remote assistance so you can file your return from home.

04/02/2020

IR-2020-61, March 30, 2020 — The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people.

Address

7075 W Bell Road
Glendale, AZ
85308

Opening Hours

Monday 9am - 6pm
Tuesday 9am - 5pm
Wednesday 9am - 5pm
Thursday 9am - 5pm
Friday 9am - 5pm

Telephone

+16232878958

Website

Alerts

Be the first to know and let us send you an email when Div-An Tax Services posts news and promotions. Your email address will not be used for any other purpose, and you can unsubscribe at any time.

Contact The Practice

Send a message to Div-An Tax Services:

Shortcuts

Share