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Archive for June, 2020

How to Return an Economic Impact Payment

Wednesday, June 24th, 2020

Some people may have received an Economic Impact Payment and are unsure if they should have, such as receiving a payment for a deceased individual. You would essentially need to return the payment to the IRS address that is based on the state you live in, which is indicated in the IRS Economic Impact Payment information center ( see question 65):

https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more

If you are returning a paper check that was not cashed or deposited you should write “void” in the endorsement section on the back of the check and mail it to the appropriate address. Do not staple, bend, or paper clip the check and also include a brief explanation as to why you are returning the check.

When returning a direct deposit or a paper check that was cashed/deposited, you should mail a personal check, money order, etc to the appropriate IRS address. The check/money order should be made out to the “U.S. Treasury” and write 2020 EIP and the taxpayers ID# or social security number on the check. Also include an explanation as to why you are returning it.

A payment to someone who died before receiving the money should be returned to the IRS. Return the entire payment unless it was a joint filer and the spouse is still living. In a case like this you should send back half of the payment but not more than $1,200.

Please consult your tax advisor on all the above issues.

An Extension to File is not an Extension to Pay Your Taxes

Tuesday, June 23rd, 2020

As the 2019 personal tax deadline of July 15th approaches, we just want to remind everyone that filing for an extension means that you now have until October 15th to file your tax return, but your taxes still need to all be paid in by July 15th. An extension to file is not an extension to pay.

The IRS has also stated that they resumed processing paper returns. So if you mailed your return into the IRS instead of doing an efile, you most likely experienced a lengthy delay and most likely haven’t gotten your refund yet. But the good news is the IRS is back to processing them. The IRS also states that if you already sent in your paper copy and it hasn’t been processed yet, do not send in another one and to wait for the first one you sent in to be processed.

Please consult your tax advisor on all the above issues.

Do Economic Impact Payments Belong to the Recipient or their Nursing Home?

Wednesday, June 17th, 2020

The answer to this question is that the Economic Impact Payments belong to the recipient, not nursing homes or care facilities. The IRS is concerned that people and businesses are taking advantage of the vulnerable population that received the Economic Impact Payments.

The IRS states that “payments are intended for the recipients even if a nursing home or other facility receives the person’s payment, either directly or indirectly by direct deposit or check. These payments do not count as a resource for purposes of determining eligibility for Medicaid and other federal programs for a period of 12 months from receipt. They also do not count as income in determining eligibility for these programs.” The Economic Impact Payments do not count as resources that have to be turned over by the recipient to the nursing home. The payment is considered an advance refund for 2020 taxes, so it is considered a tax refund and not income.

The Social Security Administration has posted a FAQ section where you can find further information:

https://www.ssa.gov/coronavirus/#reppayee

Please consult your tax advisor on all the above issues.

Scams Related to Covid-19

Wednesday, June 10th, 2020

The criminals have been hard at working trying to steal from people during this pandemic. The IRS has released a list of what they have seen so far:

• Economic Impact payments being stolen or the taxpayers information being stolen from a scam related to these payments.
• Fake at home test kits, fake cures/vaccines, pills, and unproven Covid-19 treatments are being sold to people.
• Persons claim to have a large amount of medical supplies for sale and go as far as to setup fake shops, websites, social media accounts, and emails but never deliver the products after they get paid.
• Fake charities are being setup to solicit donations.
• Criminals are setting up fake companies and offering early opportunities to invest in that company because they are claiming to be developing a vaccine.
• Scammers are trying to steal your information via texts, emails, letters, and links.

Coronavirus related scams can be reported on the following link:

https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form

Please consult your tax advisor on all the above information.

Some People Need to Register for the Economic Impact Payment

Thursday, June 4th, 2020

The IRS is reminding people that you may qualify for an Economic Impact Payment even if you are not required to file a tax return. Since the IRS does not have your current information you need to register with the IRS by October 15th, 2020. You can register online at the following website:

https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here#_blank

The IRS states that if you are eligible for a payment and register by October 15th, you will receive your payment by the end of the year. Also keep in mind this registration is only for people who are not required to file a tax return because their income is below the filing threshholds.

Please consult with your tax advisor on all the above information.