J. ALAN HAYES, CERTIFIED PUBLIC ACCOUNTANT
  • Home
  • Blog
  • Downloads
  • Log In
  • Pay Fees
  • Contact
  • About
  • Tax Checklist
  • Links
  • Contractor Boards
  • Home
  • Blog
  • Downloads
  • Log In
  • Pay Fees
  • Contact
  • About
  • Tax Checklist
  • Links
  • Contractor Boards

Blog

Individual Stimulus Checks Are On The Way

4/9/2020

0 Comments

 
 Soon the first set of Stimulus Payments are set to go out.  These are the payments you have all heard a lot about in the news.  With these payments set to go out I thought it would be good to write and try to separate fact from fiction concerning these payments.  There is a lot of information out there about these, some good, some bad.  I will try to explain what I know about these payments in the bullet points below:

  • The amounts of the Stimulus Payments are:
           o   $1,200 for single, head of household and married filing separate taxpayers
           o   $2,400 for married filing joint taxpayers
           o   $500 for each child listed as a dependent who is under 17
  • These payments begin to phase out at various income (AGI) levels as follows:
           o   For singles and MFS it begins at $75,000 and total phase out is at $99,000
           o   For head of household it begins at $112,500 and total phase out is at $136,500
           o   For MFJ it begins at $150,000 and total phase out is at $198,000
  • You will receive these payments one of two ways:
          o   Direct Deposit:  If the IRS has a bank account on record these payments will be direct deposited into that                               account.  To have a bank account of record you must have had a refund from your 2018 or 2019 Federal Form                         1040 direct deposited.   It is unclear if your banking information used to pay taxes due by EFT qualifies as a                          “bank  of record”. There is currently no clear guidance on that at this time.  Also there are various vendors stating                they can get your bank account set up with the IRS to receive the Stimulus Payment by direct deposit instead of                    paper check.  Use these at your own risk. 
         o   Paper Check:  If the IRS does not have a “bank of record” they will issue a paper check to the address on the                          latest return (2018 or 2019) filed.  If you have changed addresses since then you need to submit a Form 8822 to                    IRS as soon as possible.  You can find this form at www.irs.gov.
  • These Stimulus Payments are 2020 Refundable Tax Credits.  They are being sent out now as “advance payments”.  When you file your 2020 return these credits will be “trued up” but ONLY in your favor.  Therefore if you received a reduced payment based on your 2018 or 2019 income level and for 2020 you fall below the phase out level you will receive the remaining portion of the credit when you file your 2020 return.  The same with children, if you had a child in 2019 or 2020 that you did not receive a credit for you will receive this credit when you file your 2020 return.  Currently there is no provision for a “crawl back” meaning if you received a payment based on your 2018 or 2019 return which would be phased out in 2020 you will not be required to pay it back.
  • Because these payments are 2020 Tax Credits we will need to report this on your 2020 tax return.  NO, IT WILL NOT BE TAXABLE INCOME but will be reported.  You will receive a letter from the IRS within two weeks of them either making the direct deposit or mailing you a check.  This letter will report the amount of your payment.  Please keep this letter with your 2020 tax information.  If possible please go ahead and send us a copy when you receive it and we will place it in your file. 
  • If you receive social security benefits and were not required to file a tax return for 2018 or 2019 you will still receive the Stimulus Payment.  The IRS will use records obtained from the Social Security Administration.  These payments will be direct deposited just as your social security benefits are.
 
As always know we are here for you should you have any questions.   Take care and stay safe.  This will be over soon.
 
J. Alan Hayes, CPA 
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Author

    J. Alan Hayes

    Archives

    November 2020
    September 2020
    July 2020
    June 2020
    April 2020
    March 2020
    February 2020
    December 2019
    October 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    January 2019
    December 2018
    November 2018
    October 2018
    August 2018
    July 2018
    June 2018
    April 2018
    January 2018
    December 2017
    November 2017
    October 2017
    August 2017
    July 2017
    June 2017
    April 2017
    March 2017
    January 2017
    December 2016
    November 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    February 2016
    December 2015

    Categories

    All

    RSS Feed

2522 North Mt. Juliet Road
​Mt. Juliet, Tennessee 37122
​admin@hayescpas.net
(615) 773-5790   Phone
                   (615) 773-5789   Fax
​Privacy Policy