5/24/2021
Stimulus Eligibility and Payments
Congress approved a third round of stimulus payments in March of 2021 for eligible Americans. Checks will total $1,400 per adult and $1,400 per child or adult dependent. This last round of payments total about $376 billion, and about 156 million individual payments have been sent thus far. Therefore, if you have not applied for or received your stimulus payment yet, you may still be eligible.
The eligibility qualifications are the same as the previous two rounds of stimulus payments. Your adjusted gross income must be below certain levels in order to qualify and are as follows:
- Up to $75,000 if single,
- Up to $112,500 if you are the head of household
- Up to $150,000 if you are married and filing jointly.
For this third round of payments, the following specifications disqualify you from a check:
- Singles with an adjusted gross income of $80,000 or over
- Heads of household with a gross income of $120,000 or over
- Married couples with a gross income of $160,000 or over
Anyone applying must also be a United States citizen or resident alien.
Stimulus checks are still being sent every week. Some people may even receive additional payments after the third stimulus check. The stimulus payments were calculated based upon 2019 tax returns. Once the 2020 tax returns are processed, a “plus-up” payment may be sent to individuals or families if their income has dropped or a dependent has been added without additional income.
The Internal Revenue Service is also taking into account people who are filing a tax return for the first time. By filing a return, the Internal Revenue Service can determine if Federal Benefits are needed, and a stimulus check can be issued. Tax returns can be filed for free for anyone that earns less than $72,000 using the Free File Program offered by the IRS. The File Free Program link is located on the IRS website. Everyone, even those that live in rural areas, the homeless and those in underserved groups, is encouraged to file a tax return. A free tax return can be filed through the IRS website on a smartphone or computer. The payment can be directly deposited into a free or low-cost checking account. The payment will be expedited if an account number is included in the tax filing.
Most people who receive federal benefits such as Social Security, Supplemental Security Income, or Veterans Affairs benefits are likely to receive new stimulus checks. Those who do not usually file tax returns typically do not need to do anything to receive a stimulus check unless they have dependents that are eligible for stimulus checks, in which case they must file a tax return to receive them. The IRS will even provide free assistance preparing your tax return through the Free File Program. The IRS also offers Tax Counseling for the Elderly and Volunteer Income Tax Assistance, or VITA. These programs are designed to assist those who earn less than $57,000 and have disabilities and/or difficulty speaking English. A locator tool on the IRS website will assist you in finding locations for assistance and where these programs are offered.
Important Note: Nothing in this article constitutes investment, tax and/or financial advice. All investments have risks and may not be suitable for everyone. You should seek advice from an independent financial advisor. The mention of products, services, and business in this article does not constitute an endorsement or recommendation.
5/6/2021
Federal Income Tax Filings Extended Nationwide
For all those that value those last precious moments to gather information and search through their files before running to the post office on April 15th to mail their taxes, this year you can rest easy because the IRS and Treasury Department have extended the official filing and payment deadline for individuals to May 17th. Considerations have been made for the many difficulties the past year as brought to families and individuals, and the Internal Revenue Service is offering this extension as a way to help taxpayers alleviate the hardships of the pandemic. While this extension may seem like a reprieve, the Internal Revenue Service still encourages filings to be submitted as soon as possible, especially if you may be owed a refund. When filing electronically with direct deposit, you will most likely receive your refund the fastest. This manner of filing may also speed up any stimulus payments still owed to you. Most refunds submitted through an e-filed return are paid within 21 days.
If a taxpayer owes federal income payments for 2020, those can be postponed to May 17th without penalties or interest, regardless of the amount. This applies to individuals as well as those that pay self-employment tax. Penalties and interest on unpaid balances will begin to accrue on May 17th, rather than April 15th. Nothing needs to be done to qualify for this extension. There are no forms to complete or calls to be made to the IRS to qualify. This extension automatically applies to all individuals if they choose to use it. If an individual wants an extension beyond May 17th, 2021, a request can be submitted by filing Form 4868. This can be done through a tax professional, tax software or by using the Free File link on IRS.gov. This additional extension will provide time until October 15th, 2021, to file the 2020 tax return but not an extension of time to pay taxes due. Interest and penalties will still accrue beginning May 17th, 2021.
Please note that this extension does not apply to estimated tax payments originally due on April 15th, 2021, because tax laws state that taxes are to be paid as income is earned or received throughout the year. Estimated tax payments are typically made quarterly by taxpayers whose income isn’t subject to income tax withholding. Examples of such income would be self-employment, interest, dividends, alimony, or rental income. The majority of taxpayers have their taxes withheld by their employer, in which case this does not apply.
Important Note: Nothing in this article constitutes investment, tax and/or financial advice. All investments have risks and may not be suitable for everyone. You should seek advice from an independent financial or tax advisor. The mention of products, services, and business in this article does not constitute an endorsement or recommendation.
