Coronavirus has changed nearly every aspect of our lives in just the past few weeks. Taxes are no exception. While many tax deadlines have been delayed, taxes have gained new importance as they relate the recently passed Federal stimulus payments. The following summary is the most recent status of stimulus payments for individuals and tax filing deadlines. For more details and the latest information visit https://newsandupdates.triumphovertax.com/blog.
Federal Stimulus Payments Will Be Based Off Income Tax Returns
Individual taxpayers with adjusted gross income up to $75,000 will receive the full payment of $1,200 and $500 for each child under the age of 17. Married couples filing joint returns with adjusted gross income up to $150,000 will receive the full payment of $2,400. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.
Applicable Tax Year
For taxpayers 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. For taxpayers that have not provided direct deposit information to the IRS on previous tax returns, the IRS is in the process of creating a web-based portal for taxpayers to provide their banking details. All other taxpayers will receive checks in the mail which may take up to 20 weeks.
No Tax Return On File
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 possible to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.
Social Security recipients without a filing requirement will automatically receive economic impact payments. Social Security recipients who don’t typically file a tax return will not be required to file a tax return to receive their stimulus payments. This is a change from the IRS’s previous position which was to require such taxpayers to file a simple tax return to receive their stimulus payment.
Taxpayers who have not had a filing requirement for the last two years and don't receive Social Security payments should file an Economic Impact Payment (EIP) Return in order to receive their payment from the IRS.
IRS Individual Income Tax Filing and Payment Deadlines
The deadline to file individual Federal income tax returns with the IRS has been extended from April 15, 2020, to July 15, 2020. Taxpayers may also defer Federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed.
State of Hawaii Individual Income Tax Filing and Payment Deadlines
The deadline to file individual state income tax returns with the Hawaii Department of Taxation has been extended from April 20, 2020 to July 20, 2020. Individual Income tax payments for Tax Year 2019 due on April 20, 2020, are also extended to July 20, 2020.
Taxpayers Expecting 2019 Income Tax Refunds
Taxpayers who are expecting refunds for Tax Year 2019 may benefit from filing their 2019 returns as soon as possible. Filing your 2019 return will enable such taxpayers to receive their refunds sooner and will decrease the risk that someone could fraudulently file a tax return in an attempt to claim your refund. However, if Tax Year 2019 income exceeds Tax Year 2018 income and would result in a reduction of the stimulus payment, see below, then it may benefit such taxpayers to delay filing until after the stimulus payment is received.
For more information on economic stimulus payments, tax deadlines, and other tax issues impacting individuals and businesses visit TriumpOverTax.com.