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:
o $2,400 for married filing joint taxpayers
o $500 for each child listed as a dependent who is under 17
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
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.
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
In an effort to keep liquidity in the economy and to allow businesses to endure the shutdowns and lack of traffic during this COVID-19 pandemic, the Treasury has made loans available to small businesses. The two main loans are the Economic Injury Disaster Loan (EIDL) which is administered by the Small Business Administration and the Paycheck Protection Program (PPP) which is administered by local banks and credit unions approved as SBA 7(a) lenders. To find more information about the EIDL loan including starting an application, visit the Small Business Administration's website via this link. To find more information about the PPP loan including the terms and forgiveness provisions, contact your local SBA 7(a) lender or visit the Small Business Administration's page about the PPP via this link. The Treasury has also posted PPP loan information including an overview, information for lenders, information for borrowers, and an application to give an idea of information needed. Click here and then select the applicable PDF for your situation.
Tennessee released Notice #20-07 on March 30, 2020 outlining the extension of the Business Tax filing and payment due date from April 15, 2020 to June 15, 2020. It is important to note that the extended due date is different than the extended Franchise and Income Tax and Hall Income Tax due dates. Click here to view the notice from the state.
Following in the footsteps of the IRS once again, the Tennessee Department of Revenue has moved the filing and payment due dates for Hall Income Tax returns. Click here for the notice from the state.
As expected, the state of Tennessee Department of Revenue followed the lead of the IRS and moved the Franchise and Excise tax filing deadline and payment due date from April 15th to July 15th. This includes quarterly estimated payments due April 15th. The extension due date will remain October 15th per the notice. Click here to read the notice from the Tennessee Department of Revenue.
On March 21, the IRS moved the due date for all April income tax filings and payments due from April 15th to July 15th. No action is required by the filer to receive the extended due date. This applies to the first estimated payment due April 15th as well. It is expected that most states will follow the lead of the IRS and move their due date as well. When this is confirmed, we will post here on our website. Click here to view the IRS notice.
The IRS and the Tennessee Department of Revenue have provided relief to those areas affected by the recent tornadoes. The Federal Government declared Davidson County, Putnam County and Wilson County as Federal Disaster Areas after the tornadoes. As a result, the IRS and state of Tennessee have moved the due date for selected returns for residents of these counties from April 15 to July 15. Residents of these counties do not need to take any action to receive the extended date. This applies to Federal Form 1040, Federal Form 1041, Federal Form 1120, Federal Form 941, Federal Form 990, Tennessee Form FAE 170, Tennessee Form INC 250 and all estimated tax payments, federal and state. Click here for the IRS notice for further details. Click here for the TDOR notice for state specific details.
If you feel like you've heard this before, well you very likely have. The IRS has modified the just recently modified W4 form and calculator in an effort to simplify determining proper tax withholding for the tax year. If your taxes are relatively simple, then you probably don't need to make any changes. However, if your tax situation involves spousal income, dependents, child credits and/or other deductions; then it is a good idea to take a look at your withholding early in the year rather than later. Kiplinger.com has an explanation of the changes to the W4, click here to view their story. If you want to go straight to the IRS calculator click here. If your mind is spinning after visiting one or both sites, contact us.
As the end of the year closes in, the IRS reminds us to be diligent about tax scams. It's easy for complacency to creep in as we read stories of how others were scammed and think I would never fall for that. The reality is that as scams are exposed, the scammers become more sophisticated and better at disguising their intentions. The IRS has provided the latest scam methods on their website for us to be aware of. Click here to see the links and learn more how to protect yourself.
If you love examining and comparing tax situations for different events or time periods, you're in luck. Kiplinger.com has published a comparison of the tax tables for 2019 with 2018 so you can greet April 15, 2020 with anticipation rather than dread. The changes are modest but the brackets have been updated to account for inflation. Click here to view the brackets and put your pencils to work.
J. Alan Hayes