Barton Tax Service

IRS warns people about a COVID-related text message scam The IRS and its Security Summit partners are warning people to be aware of a new text message scam. The thief’s goal is to trick people into revealing bank account information under the guise of receiving the $1,200 Economic Impact Payment. Here’s how this scam works... People get a text message saying they have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment Continue here to accept this payment " The text includes a link to a phishing web address. This fake link appears to come from a state agency or relief organization. It takes people to a fake website that looks like the IRS.gov Get My Payment website. If people visit the fake website and enter their personal and financial account information, the scammers collect it. Here’s what people should do if they receive this message Anyone who receives this scam text should take a screenshot and include the screenshot in an email to [email protected] with the following information: Date/time/time zone that they received the text message The phone number that received the text message The IRS doesn’t send unsolicited texts or emails. The agency will never demand immediate payment using a gift card, prepaid debit card or wire transfer or threaten to have a taxpayer arrested.

IRS: Unemployment compensation is taxable; Have tax withheld now and avoid a tax-time surprise WASHINGTON With millions of Americans now receiving taxable unemployment compensation, many of them for the first time, the Internal Revenue Service today reminded people receiving unemployment compensation that they can have tax withheld from their benefits now to help avoid owing taxes on this income when they file their federal income tax return next year. By law, unemployment ...compensation is taxable and must be reported on a 2020 federal income tax return. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted this spring. Withholding is voluntary. Federal law allows any recipient to choose to have a flat 10% withheld from their benefits to cover part or all of their tax liability. To do that, fill out Form W-4V, Voluntary Withholding Request (PDF), and give it to the agency paying the benefits. Don’t send it to the IRS. If the payor has its own withholding request form, use it instead. If a recipient doesn’t choose withholding, or if withholding is not enough, they can make quarterly estimated tax payments instead. The payment for the first two quarters of 2020 was due on July 15. Third and fourth quarter payments are due on Sept. 15, 2020, and Jan. 15, 2021, respectively. For more information, including some helpful worksheets, see Form 1040-ES and Publication 505, available on IRS.gov. Here are some types of payments taxpayers should check their withholding on: Unemployment compensation includes: Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund Railroad unemployment compensation benefits Disability benefits paid as a substitute for unemployment compensation Trade readjustment allowances under the Trade Act of 1974 Unemployment assistance under the Disaster Relief and Emergency Assistance Act of 1974, and Unemployment assistance under the Airline Deregulation Act of 1978 Program Recipients who return to work before the end of the year can use the IRS Tax Withholding Estimator to make sure they are having enough tax taken out of their pay. Available only on IRS.gov, this online tool can help any worker or pension recipient avoid or lessen their year-end tax bill or estimate the refund they want. In January 2021, unemployment benefit recipients should receive a Form 1099-G, Certain Government Payments (PDF) from the agency paying the benefits. The form will show the amount of unemployment compensation they received during 2020 in Box 1, and any federal income tax withheld in Box 4. Taxpayers report this information, along with their W-2 income, on their 2020 federal tax return. For more information on unemployment, see Unemployment Benefits in Publication 525.

13.9 million Americans to receive IRS tax refund interest; Taxable payments to average $18 WASHINGTON This week the Treasury Department and the Internal Revenue Service will send interest payments to about 13.9 million individual taxpayers who timely filed their 2019 federal income tax returns and are receiving refunds. The interest payments, averaging about $18, will be made to individual taxpayers who filed a 2019 return by this year’s July 15 deadline and either received... a refund in the past three months or will receive a refund. Most interest payments will be issued separately from tax refunds. In most cases, taxpayers who received their refund by direct deposit will have their interest payment direct deposited in the same account. About 12 million of these payments will be direct deposited. Everyone else will receive a check. A notation on the check saying INT Amount will identify it as a refund interest payment and indicate the interest amount. By law, these interest payments are taxable and taxpayers who receive them must report the interest on the 2020 federal income tax return they file next year. In January 2021, the IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10. This provision is different from the long-standing 45-day rule, generally requiring the IRS to add interest to refunds on timely-filed refund claims issued more than 45 days after the return due date. Instead, this year’s COVID-19-related July 15 due date is considered a disaster-related postponement of the filing deadline. Where a disaster-related postponement exists, the IRS is required, by law, to pay interest, calculated from the original April 15 filing deadline, as long as an individual files a 2019 federal income tax return by the postponed deadline July 15, 2020, in this instance. This refund interest requirement only applies to individual income tax filers businesses are not eligible. Interest is paid at the legally prescribed rate that is adjusted quarterly. The rate for the second quarter ending June 30 was 5%, compounded daily. Effective July 1, the rate for the third quarter dropped to 3%, compounded daily. Where the calculation period spans quarters, a blended rate applies, consisting of the number of days falling in each calendar quarter. No interest will be added to any refund issued before the original April 15 deadline.

IRS enhances Get My Payment online application to help taxpayers WASHINGTON The Internal Revenue Service today announced significant enhancements to the Get My Payment tool to deliver an improved and smoother experience for Americans eligible to receive Economic Impact Payments. The enhancements, which started last week and continued through the weekend, adjusted several items related to the online tool, which debuted on April 15. The additional changes will help millions...Continue reading

IRS enhances Get My Payment online application to help taxpayers WASHINGTON The Internal Revenue Service today announced significant enhancements to the Get My Payment tool to deliver an improved and smoother experience for Americans eligible to receive Economic Impact Payments. The enhancements, which started last week and continued through the weekend, adjusted several items related to the online tool, which debuted on April 15. The additional changes will help millions...Continue reading

COVID Tax Tip 2020 Here’s how much individuals will get from the Economic Impact Payments Employed full or part time? Unemployed? A temporary or gig worker? Retired or disabled? Receive public benefits? Have no income? Most U.S. residents under certain income levels - will receive the Economic Impact Payment if they are not claimed as a dependent of another taxpayer and have a Social Security number.... Here’s how much the payments will be: Eligible individuals will receive up to $1,200. Eligible married couples will receive up to $2,400. Eligible individuals will receive up to $500 for each qualifying child. Taxpayers will receive a reduced payment if their adjusted gross income is between: $75,000 and $99,000 if their filing status was single or married filing separately $112,500 and $136,500 for head of household $150,000 and $198,000 if their filing status was married filing jointly Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an Economic Impact Payment. Payments will also be automatic for people who receive Social Security retirement, disability (SSDI), or survivor benefits or Railroad Retirement benefits who don’t normally file a tax return. Those receiving these benefits who aren’t claimed as a dependent on someone else’s return or required to file a tax return are eligible for a $1,200 payment. However, people in this group who have qualifying children under age 17 will need to provide information using the Non-Filers: Enter Payment Info tool to claim the $500 payment per child. The IRS encourages people to share this information with family and friends.

The IRA contribution deadline has been postponed to July 15, 2020. To help taxpayers better manage the financial impact of the coronavirus pandemic, the federal government granted an extension from the normal April 15 filing and payment deadline for federal income taxes.

IRS issues warning about Coronavirus-related scams; watch out for schemes tied to economic impact payments WASHINGTON The Internal Revenue Service today urged taxpayers to be on the lookout for a surge of calls and email phishing attempts about the Coronavirus, or COVID-19. These contacts can lead to tax-related fraud and identity theft. "We urge people to take extra care during this period. The IRS isn't going to call you asking to verify or provide your financial informat...Continue reading

Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed WASHINGTON The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.... Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional. The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days. Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically, said IRS Commissioner Chuck Rettig. Filing electronically with direct deposit is the quickest way to get refunds. Although we are curtailing some operations during this period, the IRS is continuing with mission-critical operations to support the nation, and that includes accepting tax returns and sending refunds. As a federal agency vital to the overall operations of our country, we ask for your personal support, your understanding and your patience. The IRS will continue to monitor issues related to the COVID-19 virus, and updated information will be posted on a special coronavirus page on IRS.gov. This announcement comes following the President’s emergency declaration last week pursuant to the Stafford Act. The Stafford Act is a federal law designed to bring an orderly and systematic means of federal natural disaster and emergency assistance for state and local governments in carrying out their responsibilities to aid citizens. It was enacted in 1988. Treasury and IRS will issue additional information as needed.

As of now, IRS has deferred tax payments due to July 15. Keep in mind you still have to file your tax return by April 15 to be automatically included in the deferred payment. Don’t make the mistake of thinking you can file after April 15 and not owe until July. File before April 15, if you owe you can pay on or before July 15 with no interest and penalties. There is talk of extending filing date but it has not been finalized and is still in discussion. Meanwhile file before due date of April 15.

Those of you filing long form with medical deductions. You can ask your pharmacy and DR’s for a printout of what you paid in 2019.

IRS sets the opening of tax season Filing will begin on Monday, Jan. 27, 2020.

IRS issues standard mileage rates for 2020 The Internal Revenue Service today issued the 2020 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:... 57.5 cents per mile driven for business use, down one half of a cent from the rate for 2019, 17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and 14 cents per mile driven in service of charitable organizations. The business mileage rate decreased one half of a cent for business travel driven and three cents for medical and certain moving expense from the rates for 2019. The charitable rate is set by statute and remains unchanged. It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details, see Rev. Proc. 2019-46. The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than five vehicles used simultaneously. These and other limitations are described in section 4.05 of Rev. Proc. 2019-46.

Tax tips for taxpayers to consider when selling their home The IRS has some good news for taxpayers who are selling their home. When filing their taxes, they may qualify to exclude all or part of any gain from the sale from their income. Here are some things that homeowners should think about when selling a home: Ownership and use... To claim the exclusion, the taxpayer must meet ownership and use tests. During a five-year period ending on the date of the sale, the homeowner must have owned the home and lived in it as their main home for at least two years. Gains Taxpayers who sell their main home and have a gain from the sale may be able to exclude up to $250,000 of that gain from their income. Taxpayers who file a joint return with their spouse may be able to exclude up to $500,000. Homeowners excluding all the gain do not need to report the sale on their tax return. Losses Some taxpayers experience a loss when their main home sells for less than what they paid for it. This loss is not deductible. Multiple homes Taxpayers who own more than one home can only exclude the gain on the sale of their main home. They must pay taxes on the gain from selling any other home. Reported sale Taxpayers who don’t qualify to exclude all of the taxable gain from their income must report the gain from the sale of their home when they file their tax return. Anyone who chooses not to claim the exclusion must report the taxable gain on their tax return. Taxpayers who receive Form 1099-S must report the sale on their tax return even if they have no taxable gain. Mortgage debt Generally, taxpayers must report forgiven or canceled debt as income on their tax return. This includes people who had a mortgage workout, foreclosure, or other canceled mortgage debt on their home. Taxpayers who had debt discharged after Dec. 31, 2017, can’t exclude it from income as qualified principal residence indebtedness unless a written agreement for the debt forgiveness was in place before January 1, 2018. Possible exceptions There are exceptions to these rules for some individuals, including persons with a disability, certain members of the military, intelligence community and Peace Corps workers.

Tax reform brought significant changes to itemized deductions Tax law changes in the Tax Cuts and Jobs Act affect almost everyone who itemized deductions on tax returns they filed in previous years.. One of these changes is that TCJA nearly doubled the standard deduction for most taxpayers. This means that many individuals may find it more beneficial to take the standard deduction. However, taxpayers may still consider itemizing if their total deductions exceed the standard ...deduction amounts. Here are some highlights taxpayers need to know if they plan to itemize deductions: Medical and dental expenses Taxpayers can deduct the part of their medical and dental expenses that’s more than 7.5 percent of their adjusted gross income. State and local taxes The law limits the deduction of state and local income, sales, and property taxes to a combined, total deduction of $10,000. The amount is $5,000 for married taxpayers filing separate returns. Taxpayers cannot deduct any state and local taxes paid above this amount. Miscellaneous deductions The new law suspends the deduction for job-related expenses or other miscellaneous itemized deductions that exceed 2 percent of adjusted gross income. This includes unreimbursed employee expenses such as uniforms, union dues and the deduction for business-related meals, entertainment and travel. Home equity loan interest Taxpayers can no longer deduct interest paid on most home equity loans unless they used the loan proceeds to buy, build or substantially improve their main home or second home. If you do not qualify to file Schedule A on Federal return, California still allows itemized deductions, so don't throw out keeping track of deductions. You still cannot use the above write-offs, but the other deductions still are used for California.