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Who is eligible for the Economic Impact Payment?

U.S. citizens or resident aliens who:

• Have a valid Social Security number,
• Could not be claimed as a dependent of another taxpayer, and
• Had adjusted gross income under certain limits.

Who will receive the Economic Impact Payment automatically (EIP) without taking additional steps?

Most eligible U.S. taxpayers will Automatically receive their EIP payments are individuals who: 

• Filed a federal income tax for 2018 or 2019
• Receive social security retirement, disability (SSDI), or survivor benefits, and
• Individuals who receive Railroad Retirement benefits

What about Non-Filers taxpayers: 

Eligible U.S. citizens or permanent residents who:

• Had gross income < than $12,200 ($24,400 for married couples) for 2019
• Were not otherwise required to file a federal income tax return for 2019, and didn't plan to file.

What to do?  You can provide the necessary information to the IRS easily and quickly for no fee through "Non-Filers: Enter Payment Info", see below.  After providing this information you won’t need to take any additional action.

Non-Filers: Enter Payment Info Here

Information you need to provide?

• Full name, current mailing address and an email address
• Date of birth and valid Social Security number
• Bank account number, type, and routing number, if you have one
• Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year if you have one
• Driver’s license or state-issued ID, if you have one
• For each qualifying child: name, Social Security number or Adoption Taxpayer Identification Number and their relationship to you or your spouse

What to Expect

Clicking “Non-Filers: Enter Payment Info Here” above will take you from the IRS site to Free File Fillable Forms, a certified IRS partner. The IRS claims this site is safe and secure.

Expected steps to follow, are:

• Create an account by providing your email address and phone number; and establishing a user ID and password.
• You will be directed to a screen where you will input your filing status (Single or Married filing jointly) and personal information.
• Make sure you have valid Social Security numbers.
• If applicable to you; Adoption Taxpayer Identification Number for each dependent you want to claim for. 
• Check the “box” if someone can claim you as a dependent or your spouse as a dependent.
• Complete your bank information (otherwise we will send you a check).
• You will be directed to another screen where you will enter personal information to verify yourself. Simply follow the instructions. 
• You will need your driver’s license (or state-issued ID) information. If you don’t have one, leave it blank.

A confirmation email of information submitted.

You will receive an e-mail from Customer Service at Free File Fillable Forms that either acknowledge you have successfully submitted your information, or that tells you there is a problem and how to correct it. 

Free File Fillable forms will use the information to automatically complete a Form 1040 and transmit it to the IRS to compute and send you a payment.  Source IRS.gov

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Click the link below to get general information regarding the Fed Small Business Loan.


https://www.natptax.com/TaxKnowledgeCenter/covid19resources/Documents/irs-payments-poster.pdf?utm_source=mkt&utm_medium=email&utm_content=040620commish&utm_campaign=gen

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The Economic impact federal check.

IR-2020-61, March 30, 2020

According to The Treasury Department and the Internal Revenue Service, the distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required of your part. 

Taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment.

Social security beneficiaries who are not required to file tax returns will not need to file an abbreviated tax return to receive an economic impact payment. The IRS will use the information on Form SSA-1099 to generate a $1,200 payment. 

Who is eligible for the economic impact payment?

Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. 

Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return. 

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.

How will the IRS know where to send my payment?

The IRS will calculate and automatically send the economic impact payment to those eligible.

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. 

The economic impact payment will be deposited directly into the same banking account reflected on the return filed.

Taxpayer who failed to provide direct deposit information in their tax return. Can do the following:

Wait for the IRS web-based portal for taxpayers to provide their banking information to the IRS.  This facilitates receive payments immediately as opposed to checks in the mail.

Where can I get more information?

The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.

Can my Health Savings Account (HSA) covers my Novel Coronavirus (COVID-19) testing expenses?

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COVID-19 Testing and treatment cost

According to the IRS, and taking into consideration that most corporate high deductible plans differ from others, you could be able to use your health savings account (HSA) account to pay for these testing and treatment expenses.  This also means that an individual with a High Deductible Health Plan (HDHP) can cover these costs.

The IRS said that health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met. 

As in the past, any vaccination costs continue to count as preventive care and can be paid for by an HDHP.

Today's notice applies only to HSA-eligible HDHPs. Employees and other taxpayers in any other type of health plan with specific questions about their own plan and what it covers should contact their Plan Administrator.  Source IRS.gov

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What I need to know if I received an inceptive option in the form of company stock

What is an incentive stock option?

Some time companies give employees the right to buy shares of the company in lieu of compensation. Other times the intention is to give the right as an incentive in exchange for work performance, meet some goals, due dates, etc. The option price at which the employee paid could vary. 

What is the Taxpayer Tax Treatment?

If you receive an option as an incentive, the taxpayer needs to keep a few dates in mind: Date was granted, the date is exercised.  Also: when and what is considered compensation or capital gain.   

The best option for taxpayers is to consult a CPA.

Source: IRS.gov

Do you know your rights as a Taxpayer?

Taxpayer Rights 

The IRS explains your rights as a Taxpayer and the processes for examination, appeal, collection, and refunds in Publication 1.  This is a summary list of those rights:

1- Your rights to be informed.

2- The right to quality service

3- The right to pay no more than the correct amount of tax

4- The right to appeal an IRS decision

5- The right to finality

6- The right to privacy

7- The right to confidentiality

8- The right to retain representation

9- The right to a fair and just tax system

10- The right to challenge an IRS position

Click below for a copy of the IRS publication. 

file:///C:/Users/modesto/Desktop/Tax%20master%20folder/2020%20Newsletter%20articles/p1%20taxpayer%20rights%202020.pdf

Source: IRS.GOV

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Moving Expense Deduction

Who qualified to deduct moving expenses?

Individuals who are members' of the Armed Forces on active duty and you move because of a permanent change of active duty station. 

What is considered "Permanent Change of Station"?

• A move from one permanent post of duty to another, and 
• A move from your last post of duty to your home or to a nearer point in the United States. 

What moving expenses can be deducted?

• The taxpayer household goods and personal effects (including in-transit or foreign-move storage expenses).
• Any traveling (including lodging but not meals) to your new home, and
• You can't deduct any expenses for meals.

Is there any dollar limitation or restriction?

Yes, you can deduct only those expenses that are reasonable for the circumstances of your move. 

The move must occur within 1 year of ending your active duty or within the period allowed under the Joint Travel Regulations.

Please consult your CPA to determine how the regulations could benefit you.

Source: IRS.gov

  

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Credit Card Purchases

In dealing with credit card purchases, the year you made the purchase is the year that you get to take the deduction.  This rule applies generally for both individuals and businesses. 

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Taxpayers can view their tax account going to the IRS website. 

The first step is to set-up an account.  (Go to blue link below)  Under this step, you must provide key tax information to the IRS. That requires registration and providing the IRS with the information they are requesting. Along this process, you are required to identify yourself by providing unique information about you. 

Individual taxpayers can go to IRS.gov/account 

Second Step, you are logging in and can have access to the following:

• View their balance.
• See their payment history.
• Pay their taxes.
• Access tax records through Get Transcript.

It is very helpful for taxpayers to go here first Secure Access: How to Register for Certain Online Self-Help Tools 

CPAs and tax practitioners can be very helpful in helping you navigate on these sites.

Voluntary Classification Settlement Program (VCSP)

VOLUNTARY CLASSIFICATION SETTLEMENT PROGRAM (VCSP)

As Revised by the IRS on December 4, 2019.

What is the VCSP?

The VCSP is a voluntary program that provides an opportunity for taxpayers to reclassify their workers as employees for employment tax purposes for future tax periods with partial relief from federal employment taxes. Apply to a taxpayer who has consistently treated the workers as independent contractors or other nonemployees (who have filed all required Forms 1099) and want to reclassify these workers as employees.

How do you apply to participate in this program?

The taxpayer (TP) must apply to participate by filing Form 8952, "Application for Voluntary Classification Settlement Program", and enter into a closing agreement with the IRS.

The application should be filed at least 60 days prior to the date the taxpayer wants to begin treating its workers as employees. The IRS will make every effort to process Form 8952 with sufficient time to allow for the voluntary reclassification on the requested date. 

Along with the application, the taxpayer may provide the name of a contact or an authorized representative with a valid Power of Attorney (Form 2848).  However, the taxpayer, and not the taxpayer's representative, is required to sign Form 8952. The IRS will contact the taxpayer or authorized representative to complete the process after reviewing the application and verifying the taxpayer’s eligibility. 

Background and History:

The VCSP allows eligible taxpayers to obtain relief similar to that currently available through the Classification Settlement Program for taxpayers under examination.  Exempt organizations and government entities may participate in VCSP. 

This program, originally released in Announcement 2011-64, was later modified in Announcement 2012-45 including:

• Permit a taxpayer under IRS audit, other than an employment tax audit, to be eligible to participate in the VCSP
• Clarify the current eligibility requirement that a taxpayer who is a member of an affiliated group within the meaning of section 1504(a) is not eligible to participate in the VCSP if any member of the affiliated group is under employment tax audit
• Clarify that a taxpayer is not eligible to participate if the taxpayer is contesting in court the classification of the class or classes of workers from a previous audit by the IRS or Department of Labor; and
• Eliminate the requirement that a taxpayer agrees to extend the period of limitations on assessment of employment taxes as part of the VCSP closing agreement with the IRS.

Announcement 2012-45 (2012-51 I.R.B. 724) provides notice and information about the revised program.

Who are not eligible/are eligible to participate under this program?

Additionally, the taxpayer cannot currently be under employment tax audit by the IRS and the taxpayer cannot be currently under audit concerning the classification of the workers by the Department of Labor or by a state government agency.

If the IRS or the Department of Labor has previously audited a taxpayer concerning the classification of the workers, the TP will be eligible only if the taxpayer has complied with the results of that audit and is not currently contesting the classification in court.

What the TP agrees to do:

A taxpayer participating in the VCSP will agree to prospectively treat the class or classes of workers as employees for future tax periods. In exchange, the taxpayer will:

• Pay 10 percent of the employment tax liability that would have been due on compensation paid to the workers for the most recent tax year, determined under the reduced rates of section 3509(a) of the Internal Revenue Code. See VCSP FAQ 15, for information on how payment under the VCSP is calculated. Also, see Instructions to Form 8952;
• Not be liable for any interest and penalties on the amount; and
• Not be subject to an employment tax audit with respect to the worker classification of the workers being reclassified under the VCSP for prior years. 

Eligible taxpayers accepted into the VCSP will enter into a closing agreement with the IRS to finalize the terms of the VCSP and will simultaneously make full and complete payment of any amount due under the closing agreement.

IRS Expands Voluntary Worker Classification Settlement Program; Relief From Past Payroll Taxes Available to More Employers Who Reclassify Their Workers As Employees

Consult your CPA or the IRS.


More information is available on IRS.gov, keyword “VCSP



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