Bookkeeping

Economic impact payments: What you need to know

Check IRS.gov for the latest information: No action needed by most people at this time

IR-2020-61, March 30, 2020

WASHINGTON — The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact 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 vast majority of people do not need to take any action. 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.

The IRS does not have my direct deposit information. What can I do?

In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

I am not typically required to file a tax return. Can I still receive my payment?

Yes. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.

Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.

I have a tax filing obligation but have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?

Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.

I need to file a tax return. How long are the economic impact payments available?

For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.

Where can I get more information?

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

The IRS has a reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.

https://www.irs.gov/pub/irs-utl/e-poster_payments.pdf

More than a tax service!

Tax Help!

Tax Help!

by: Mike Ward, EA

Finding yourself bogged down with tax problems?

Do you feel like you are unable to properly explain your unique situation to the IRS and other government agencies? Have these agencies become relentless on their collections?

Or maybe you just have questions regarding your new business?

Well you are not alone!

A clear path out of complicated tax situations can feel daunting.  Finding sound tax advice from your local tax professional can make the process of reconciliation much less financially and emotionally trying. OC Tax Service specializes in these exact situations.

Below are some of the most common tax situations and the ways OC Tax can help tackle these tax problems:

Timely filing your individual 1040 tax returns and/or your business (1120, 1120S, 1065) tax returns.

• OC Tax Service specializes in Individual and small business tax filing and will help you get caught up on your personal and business tax return filing. If you have back tax debt the IRS will not negotiate until all due tax returns are filed.
• OC Tax Service will guide you through penalty relief and offer and compromise options that the IRS offers.

Tax filing for 1099 income or independent contractor income. If you are a new or seasoned independent contractor and you are not properly preparing for income tax liabilities then you may be headed for, or already in “tax trouble”. You may need tax help.

• OC Tax Service can help you take full advantage of all the tax deductions you are entitled to under the current tax code. After all the deductions are considered we will set up an estimated tax payment plan that will avoid large unexpected tax obligations at the end of the year.
• Tax filing for 1099R. Early IRA distributions are taxed and penalized differently than other investments. The tax implications should be reviewed thoroughly before these tough decisions are made. If you are considering taking early distributions, or are unsure how your retirement will be taxed, than you may need tax advice from a tax professional.
• At OC Tax Service, we have seasoned tax professionals available to explain any tax situation. We will discuss the tax implications of an early distribution from your IRA and the exceptions that may or may not apply to these rules.

Incorrect withholding on your W2 or 1099R. Setting up the proper withholding on your W2 or 1099R may keep you out of tax trouble and possibly save you from many tax headaches and tax problems.

• OC Tax professionals can explain the different withholding on tour W2 or IRA and help you decide what is best for your unique situation.

Call OC Tax Service today and speak with of our knowledgeable Enrolled Agents or Registered Tax Preparers. (410)973-2742

Commingling Accounts: Keeping Business Accounts Separate from Personal Accounts

Commingling Accounts: Keeping Business Accounts Separate from Personal Accounts

By: Mike Ward EA, OC Tax LLC

As a seasoned Tax Professional at OC Tax Service in Berlin, MD I have had the opportunity to meet and work with many talented and driven small business owners.  New and experienced entrepreneurs alike make the common mistake of comingling there business and personal accounts thus leaving themselves vulnerable to costly legal and financial roadblocks. Piercing the “Corporate veil” is a legal concept used in law suits to access your personal assets. This happens when businesses and individual shareholders or company owners commingle funds and/or accounts.   Keeping accurate records and making sound financial choices when setting up your business structure can save many headaches.  These are the most common mistakes, and steps that can be taken to avoid future complications.

Common Mistake:

• Using 1 bank account for personal and business activities
• Paying personal expenses with a business credit card or writing checks for personal expenses from the business account.
• Using personal accounts to pay business expenses
• Depositing company funds into personal accounts
• Mixing bank accounts with multiple businesses

Solutions:

• Use a separate account for all business activities
• Never pay personal bills with business accounts.
• Keep accurate records of any business expenses paid with personal funds and issue corresponding reimbursement checks.
• If you have multiple businesses keep accurate records and maintain separation on all activities.
• Have a qualified professional help when structuring your financial workflow and account set up.

Setting up a company for accurate bookkeeping is a quintessential tool for the success of any size business. Small individually owned businesses struggle with allotting the proper time for administrative duties such as bookkeeping and tax preparation. OC Tax LLC has qualified professionals available for services ranging from basic consultation all the way to full service on site bookkeeping.  We can customize a Tax and Bookkeeping package that works best for your individual needs.