Ever tried to call the IRS during tax season? I’m going to guess it wasn’t a pleasant experience. While IRS staffers may be helpful, there just don’t seem to be enough of them. Last year callers reported hold times of three hours, far longer than the 30-60 minutes the IRS anticipated in a recorded message. Read more...
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Everything we know about the coronavirus stimulus checks that will pay many Americans up to $1,200 each
Part of the $2 trillion stimulus package from the US government is one-time cash payments of...Part of the $2 trillion stimulus package from the US government is one-time cash payments of up to $1,200 to Americans who qualify. Those payments — coronavirus stimulus checks, if you will — will be paid automatically to Americans with Social Security numbers. If you filed taxes in 2018 or 2019, or you don't file taxes but do get Social Security payments, you don't have to do anything to get a payment. If you don't file taxes or get Social Security, the IRS has mentioned it will set up a "simple web portal" to submit your information, though details on that are still coming. In the meantime, TurboTax has launched its own free web portal to submit direct deposit information to the IRS. Americans who have set up direct deposits should get their payments by mid-April. Americans who are receiving paper checks may have to wait considerably longer. Read more personal finance coverage. When President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, into law, he initiated a $2 trillion stimulus package, the largest emergency relief bill in American history. Part of that package is one-time cash payments of up to $1,200 to Americans who qualify. An extra $1,200 is always welcome. But with the announcement of the cash came the questions: What is it? Who gets it? How much will I get? Is it taxable? What do I have to do to get it? Below, we've answered those questions and more. Read on for everything you need to know about your coronavirus stimulus check. What is a coronavirus stimulus check? The payment — which the IRS is calling an "economic impact payment," the government has named a "recovery rebate," and many people are calling a "stimulus check" — is technically an advance tax credit meant to offset your 2020 federal income taxes. Am I going to get a check? You will get a check if you: Have a Social Security number. Have filed taxes in 2018 or 2019, or don't earn enough to file but receive Social Security payments. Earned less than $99,000 for single filers, $136,500 for heads of household, or $198,000 for married filers according to the most recent tax return filed. Are not claimed by someone else as a dependent. How much will I get? The IRS bases the amount of your payment on the adjusted gross income (AGI) listed on your most recent tax return: 2018 or 2019. The maximum payment is $1,200 for single filers with an AGI below $75,000 or single parents (heads of household) with an AGI below $112,500. Married couples who file jointly and have an AGI below $150,000 will get a total of $2,400. Payments will begin to phase out at a rate of $5 for each $100 over the AGI threshold before ceasing at an AGI of $99,000 for single filers, $136,500 for heads of household, and $198,000 for married filers. There's also an additional $500 allotted to parents who have an AGI within the phaseout range for each child younger than 16. You can use an online calculator to figure out how much your check will be if you're unsure. Do I need to do anything to get a stimulus check? You do not have to sign up to receive a stimulus check. The process is automatic for most Americans who qualify. To get a check, you must have a Social Security number (nonresident aliens, people without a Social Security number, and adult dependents are not eligible). If you filed taxes in 2018 or 2019, that tax return must reflect an adjusted gross income below $99,000 for single filers, $136,500 for heads of household, and $198,000 for married filers. Note that if you've moved, and you haven't provided the IRS with direct-deposit information, you should make sure the agency has the correct address on file to receive a paper check in the mail. If you don't file taxes but do get Social Security payments, the government will use that information for your payment. If you don't file taxes or get Social Security payments, the IRS has announced it will set up a "simple web portal" for you to submit your information on (more to come on the details of that). On Saturday, TurboTax launched a free web portal for people who don't file taxes to submit direct deposit information to the IRS, although a PR representative for TurboTax confirmed to Business Insider that its stimulus registration web page is not the web portal to which the Treasury had previously alluded. Who won't get a stimulus check? Dependents older than 16, people without a Social Security number, and those with incomes above $99,000 (or $136,500 if you file as a head of household) won't get a stimulus check. How will I get the money? Most people will get the money deposited directly into their bank accounts. People who do not set up direct deposits with the federal government will be mailed a paper check. People who don't file taxes but do get Social Security payments will get a payment the same way they get their Social Security payments. People who don't file taxes or get Social Security payments will need to send the IRS their information through a "simple web portal" (more details to come). They may also use TurboTax's free web portal to submit direct deposit information to the IRS. When will I get my stimulus check? "If we if have your information, you'll get it within two weeks," Treasury Secretary Steven Mnuchin said in a White House press briefing, according to The Washington Post. "Social Security, you'll get it very quickly after that. If we don't have your information, you'll have a simple web portal. We'll upload it. If we don't have that, we'll send you checks in the mail." For taxpayers who can use direct deposit, the payment should be deposited mid-April. However, NBC News reported that for Americans who haven't set up direct deposits with the federal government, it could take much longer: up to five months for about 60 million Americans to receive a paper check. Business Insider's Bryan Pietsch wrote: "In early May, the IRS will send out paper checks to those without direct deposit, and it could take around 20 weeks to issue all of the checks, the report said. Those with lower incomes will reportedly be prioritized, and those on Social Security will receive their payments as they would their Social Security checks." Read more: Where is my stimulus check? Here's when your payment should arrive How does the IRS know where to send the money? In most cases, the IRS will take direct-deposit information or a mailing address from your most recent tax filing. For people who receive Social Security payments but don't have enough income to file taxes, the IRS will use the information from the Social Security payments. If neither of the above situations applies to you, but you qualify for a payment, the IRS has said it will set up a "simple tax return" in an online portal, through which you'll be able to give the IRS your contact details. More information is coming on this feature. Those who want to submit direct deposit information to the IRS may also use TurboTax's free web portal. Is the money from the check taxable? No, the money is not taxable. What if my 2018 income qualifies, but my 2019 income doesn't? The IRS bases the amount of your payment on the AGI listed in your most recent tax return: 2018 or 2019. In some cases, when your income changed between 2018 and 2019, your 2018 income might qualify for a larger payment than your 2019 payment, or perhaps it might qualify for any payment while your 2019 does not. In that case, because the IRS has extended the federal tax filing and payment deadline to July 15 (all states that tax income have also their deadlines, in most cases until July 15), you could hold off filing your 2019 income taxes until after the IRS has issued your payment, forcing the organization to use your 2018 income for your payment. Waiting to file has a few downsides, like waiting longer to get your refund and giving identity thieves more time to try and prey on your taxes. However, Riley Adams, a public accountant, previously told Business Insider if you'd qualify for a stimulus check under your 2018 income but not at all under 2019, it might be worth holding off filing for a few weeks (assuming you haven't already). What if I owe back taxes right now? You'll still get a check if you qualify. These payments are treated differently than your tax refund. Typically, you can have your refund seized if you owe back taxes, but that's not the case here. Even people with tax debt should be getting a stimulus payment if they're under the income thresholds. The only people who could get their check reduced because of debt are parents with outstanding child support. I got a phone call, email, or Facebook message about my check. Should I answer? No. The US government isn't calling, emailing, Facebook messaging, or otherwise contacting you about your stimulus check — and if someone does, it's probably a scam. The IRS generally gets in contact with taxpayers through snail mail, and in the case of stimulus checks, it doesn't need to contact you for any type of additional information. The process is automatic for any American who qualifies. If someone is calling or emailing you to confirm personal details or asking for bank information or money, it's a scam. Unfortunately, scammers are taking advantage of this opportunity to steal people's identities, money, or both. These scams include fake stimulus checks that arrive immediately with an unusual denomination and ask you to verify the receipt online, as well as someone claiming that paying a "processing fee" will get your money to you sooner. What if I get my check and it's too big? You don't need to do anything. Remember: Technically, this payment is a tax credit. A tax credit reduces your tax bill on a dollar-for-dollar basis. It is one of the last steps in calculating your annual tax liability and can be claimed regardless of whether you itemize your deductions. Some tax credits, like the coronavirus recovery rebate, are refundable. That means you'll still get the money even if you don't have enough tax liability to offset it. There aren't any clawback provisions outlined in the law, so you wouldn't be expected to repay any of the money if you wind up getting too much. What if I get my check and it's too small? While it won't help you today, experts say the IRS will allow taxpayers to reconcile underpayment on next year's tax return. "If you should have gotten a check and didn't, or if you should have gotten more than you did because the IRS didn't know something important (like you have a kid), you should get more money" next tax season, Kelly Phillips Erb, a tax lawyer, wrote for Forbes. Read more on managing your money in this tumultuous time: 3 options for people struggling to pay their mortgage during the global health crisis 4 reasons to get disability insurance, even if you don't think you need it If you've been financially impacted by the coronavirus, you may be able to pause payments on these 8 bills How to get a stimulus check from the US government, which could pay up to $1,200 if you qualify In response to the coronavirus, credit card issuers like Amex and Capital One are letting customers skip payments without interest and more Join the conversation about this story » NOW WATCH: Tax Day is now July 15 — this is what it's like to do your own taxes for the very first time
When tax season begins, the IRS usually puts out a call to file tax returns as...When tax season begins, the IRS usually puts out a call to file tax returns as soon as you can. The reason is actually not designed to prevent procrastination that can contribute to a backlog of unprocessed returns on April 15 (although the pressure may help). It’s more to protect your identity and prevent tax refund…Read more...
Tax Day 2020, the last day to file your 2019 tax return, is Wednesday, April 15....Tax Day 2020, the last day to file your 2019 tax return, is Wednesday, April 15. If your adjusted gross income for 2019 was less than $69,000, you can file your federal tax return — and sometimes state tax return as well — for free online. Tax refunds typically arrive within three weeks of filing, and the IRS recommends receiving it via direct deposit. This post has been reviewed for accuracy by Thomas C. Corley, CPA. Tax season will be here before we know it. The deadline to submit your tax return in 2020 — or file an extension with the IRS — is Wednesday, April 15. The earlier you file, the sooner you'll get your refund if you're owed one. Here's what to expect when you submit your tax return next year. You can file your taxes for free if you know where to look Many online tax services allow you to file your federal taxes for free — and sometimes state taxes as well — if your adjusted gross income was less than $69,000 in 2019. You can check your options using the IRS Free File lookup. You can also download the IRS2Go app to find free tax-filing assistance, check your refund status, or make a payment. You can still file for free if you make more than $69,000, but to do so, you'll need to use the Free File Fillable Forms. The IRS recommends using those forms only if you have experience preparing tax returns on your own. You should receive all of your tax documents by early February Before you file your taxes, you need to collect all your 2019 tax documents. If you're an employee, that means your W-2; if you're a freelancer, you may have multiple 1099 forms. In some cases, you may have other statements, such as income earned from an interest-bearing savings account or interest paid on a loan, or even taxable bitcoin gains. Brokerages often issue corrected 1099s in mid-March, so if you have any brokerage accounts, it may be prudent to delay filing until the final, corrected brokerage 1099s are issued. Most tax-related documents must be filed by your employer or other institution by January 31, and the statements must be postmarked by that date as well. That means you should have received everything you need by early February. In the meantime, you can estimate your tax refund for this year using an online tax calculator. The IRS recommends e-filing and choosing direct deposit The IRS says the fastest way to get your tax refund is the method already used by most taxpayers: filing electronically and selecting direct deposit as the method for receiving your refund. Those who file electronically and opt for direct deposit may receive their refunds the fastest — less than two weeks from the date your return is received by the IRS. The IRS says direct deposit — which the government also uses for Social Security and Veterans Affairs payments — is "simple, safe, and secure." Popular online tax services like TurboTax and H&R Block are easy to use, even for tax novices — but they aren't the only option for e-filing your taxes for free. If you plan to visit an accountant, make an appointment early to avoid the rush. You should receive your tax refund within 21 days of filing Your tax refund should hit your bank account within three weeks of filing online, assuming you opt to receive it via direct deposit. Often, you'll get your money even faster. You can check the status of your tax refund using the IRS's return-tracking service 24 hours after filing your tax return online or four weeks after mailing a return. States that tax income also issue refunds, and you can check the status of your refund on your state's government website. If you owe taxes, you don't have to pay all at once Your tax situation can change over time — for example, if you get married, buy a home, or have a child — so it's always a good idea to review your W-4 tax-withholding form at the start of a new year. If you didn't review your withholding this year, changes in your tax situation may result in a larger or smaller tax bill. Regardless of when you file your tax return, your 2019 tax bill is due April 15. You can file early and schedule a payment for that day (or anytime before) if you aren't quite ready to pay. But, if you can't afford to pay your tax bill in full, don't pull out your credit card or ignore the situation. The IRS offers reasonable payment plans at much lower interest rates than most banks. You may even be able to settle the bill for less than you owe, called an offer in compromise, or request a deferment until you can make a payment. Offers in compromise and requests for deferment require additional paperwork and must be approved by the IRS. Keep copies of your old tax returns for at least 3 years You don't have to save your tax returns forever. The IRS recommends holding onto copies for at least three years — the typical length of time the IRS would look back if you happen to get audited. For those with more complicated tax returns, many accountants recommend holding on to tax returns for six years, due to the substantial omission of income IRS lookback rules. Under this rule, the IRS extends the lookback period to six years when there is a substantial omission of income, defined as 25% or more of the taxpayer's gross income on the return. Most audits cover returns filed over the past two years, but the IRS can go back further if the situation calls for it. But audits shouldn't be cause for worry for most taxpayers. Fewer than 1% of tax returns are audited by the IRS. When you dispose of old tax returns, make sure to properly shred the documents to protect against identity theft. What to do if you've been a victim of tax fraud Tax season presents plenty of opportunity for would-be identity thieves. A stolen Social Security number can be used to file a fraudulent tax return and refund request, but it's not the only tax scam out there. The IRS keeps track of the most common tax-related crimes, and the list is long and varied. The best way to protect against tax scams — especially potential identity theft — is to file your tax return as soon as possible. If you think you are a victim of identity theft or tax fraud, you should report it to the Treasury Inspector General for Tax Administration. The IRS also has detailed instructions on what to do if you are a victim of tax fraud. The US Department of Justice says the IRS never discusses personal tax issues through unsolicited emails or texts, or over social media. Be wary if you are contacted — by phone or email — by someone claiming to be from the IRS who says you owe money. When the IRS needs to get in touch with a taxpayer, standard practice is to send a letter via the US Postal Service. If you receive an unexpected and suspicious email from the IRS, forward it to firstname.lastname@example.org. More tax day coverage: When are taxes due? Should I prepare my own taxes or hire a pro? What is a tax credit? H&R Block vs. TurboTax Join the conversation about this story » NOW WATCH: Here's how to escape a flooding vehicle