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Don’t forget, Social Security benefits may be taxable Taxpayers receiving Social Security benefits may have to pay federal income tax on a portion of those benefits. Social Security benefits include monthly retirement, survivor and disability benefits. They don't include supplemental security income payments, which aren't taxable.... The portion of benefits that are taxable depends on the taxpayer’s income and filing status. To find out if their benefits are taxable, taxpayers should: Take one half of the Social Security money they collected during the year and add it to their other income. Other income includes pensions, wages, interest, dividends and capital gains. o If they are single and that total comes to more than $25,000, then part of their Social Security benefits may be taxable. o If they are married filing jointly, they should take half of their Social Security, plus half of their spouse's Social Security, and add that to all their combined income. If that total is more than $32,000, then part of their Social Security may be taxable. Fifty percent of a taxpayer’s benefits may be taxable if they are: Filing single, single, head of household or qualifying widow or widower with $25,000 to $34,000 income. Married filing separately and lived apart from their spouse for all of 2019 with $25,000 to $34,000 income. Married filing jointly with $32,000 to $44,000 income. Up to 85% of a taxpayer’s benefits may be taxable if they are: Filing single, head of household or qualifying widow or widower with more than $34,000 income. Married filing jointly with more than $44,000 income. Married filing separately and lived apart from their spouse for all of 2019 with more than $34,000 income. Married filing separately and lived with their spouse at any time during 2019. The Interactive Tax Assistant on IRS.gov can help taxpayers answer the question Are My Social Security or Railroad Retirement Tier I Benefits Taxable? The tax filing deadline has been postponed to Wednesday, July 15, 2020. The IRS is processing tax returns, issuing refunds and accepting payments. Taxpayers who mailed a tax return will experience a longer wait. There is no need to mail a second tax return or call the IRS.

Gig economy tips taxpayers should remember The gig economy, also called sharing or access economy, is activity where taxpayers earn income providing on-demand work, services or goods. Often, it’s through a digital platform like an app or website. While there are many types of sharing economy businesses, ride-sharing and home rentals are two of the most popular. Here are some things taxpayers should remember:... Income from these sources is taxable, regardless of whether an individual receives information returns. This is true even if the work is full-time, part-time or if an individual is paid in cash. Taxpayers may also be required to make quarterly estimated income tax payments and pay their share of Social Security, Medicare or Medicaid taxes. While providing gig economy services, it is important that the taxpayer is correctly classified. This means the business or the taxpayer must determine whether the individual providing the services is an employee or independent contractor. Taxpayers can use the worker classification page on IRS.gov to see how they are classified. Independent contractors may be able to deduct business expenses, depending on tax limits and rules. It is important for taxpayers to keep records of their business expenses. Since income from the gig economy is taxable, it’s important that taxpayers remember to pay the right amount of taxes throughout the year to avoid owing when they file. An employer typically withholds income taxes from their employees’ pay to help cover income taxes their employees owe. Gig economy workers who are not considered employees have two ways to cover their income taxes: o Submit a new From W-4 to their employer to have more income taxes withheld from their paycheck, if they have another job as an employee. o Make quarterly estimated tax payments to help pay their income taxes throughout the year, including self-employment tax. The Gig Economy Tax Center on IRS.gov answers questions and helps gig economy taxpayers understand their tax responsibilities. The tax filing deadline has been postponed to Wednesday, July 15, 2020. The IRS is processing tax returns, issuing refunds and accepting payments. Taxpayers who mailed a tax return will experience a longer wait. There is no need to mail a second tax return or call the IRS.

IRS announces rollover relief for required minimum distributions from retirement accounts that were waived under the CARES Act WASHINGTON The Internal Revenue Service today announced that anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account following the CARES Act RMD waiver for 2020. The 60-day rollover period for any RMDs already taken this year has... been extended to Aug. 31, 2020, to give taxpayers time to take advantage of this opportunity. The IRS described this change in Notice 2020-51, released today. The Notice also answers questions regarding the waiver of RMDs for 2020 under the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act. The CARES Act enabled any taxpayer with an RMD due in 2020 from a defined-contribution retirement plan, including a 401(k) or 403(b) plan, or an IRA, to skip those RMDs this year. This includes anyone who turned age 70 1/2 in 2019 and would have had to take the first RMD by April 1, 2020. This waiver does not apply to defined-benefit plans. In addition to the rollover opportunity, an IRA owner or beneficiary who has already received a distribution from an IRA of an amount that would have been an RMD in 2020 can repay the distribution to the IRA by Aug. 31, 2020. The notice provides that this repayment is not subject to the one rollover per 12-month period limitation and the restriction on rollovers for inherited IRAs. The notice provides two sample amendments that employers may adopt to give plan participants and beneficiaries whose RMDs are waived a choice as to whether or not to receive the waived RMD.

IRS extends July 15, other upcoming deadlines for tornado victims in parts of the South; Provides other relief WASHINGTON Victims of the April tornadoes, severe storms and flooding that took place in parts of Mississippi, Tennessee and South Carolina will have until Oct. 15, 2020, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. The IRS is offering this relief to any area designated by the Federal Emerg...Continue reading

Keep Economic Impact Payment notice with other tax records People who receive an Economic Impact Payment this year should keep Notice 1444, Your Economic Impact Payment, with their tax records. This notice provides information about the amount of their payment, how the payment was made and how to report any payment that wasn’t received. For security reasons, the IRS mails this notice to each recipient’s last known address within 15 days after the payment goes out. It’s especi...ally important for people to keep this notice if they think their payment amount is wrong. When they file their 2020 tax return, they can refer to Notice 1444 and claim additional credits, if they are eligible for them. Taxpayers should keep this notice filed with all their other important tax records. These include, W-2s from employers,1099s from banks and other payers, other income documents and virtual currency transaction records. All taxpayers should keep a copy of their past tax returns and supporting documents for at least three years. Key information from their prior year return may be required to file next year. Life changes like employment or marital status and financial gains or losses can affect a tax refund or the amount of taxes a person may owe. The tax filing deadline has been postponed to Wednesday, July 15, 2020. The IRS is processing tax returns, issuing refunds and accepting payments. Taxpayers who mailed a tax return will experience a longer wait. There is no need to mail a second tax return or call the IRS. More information: Publication 5349, Year-round Tax Planning is for Everyone Economic Impact Payment FAQs

Returning an Economic Impact Payment Millions of eligible individuals have already received their Economic Impact Payments. Some people, including those who received a payment for a deceased individual, may be unsure whether they should return a payment. Here is additional information about returning an Economic Impact Payment.... How should an individual return an Economic Impact Payment? Mail the payment to the IRS address based on the state the person lives in as indicated in the FAQs about repayments. When returning a paper check that was not cashed or deposited taxpayers should: Write Void in the endorsement section on the back of the check. Mail the voided Treasury check immediately to the appropriate IRS location. Don't staple, bend or paper clip the check. Include a brief explanation of why they return the check. When returning a direct deposit or a paper check that was cashed or deposited taxpayers should: Mail a personal check, money order, etc., to the appropriate IRS location. Make the check or money order payable to U.S. Treasury and write 2020 EIP, and the taxpayer identification number, Social Security number or individual taxpayer identification number of the person whose name is on the check. Include a brief explanation of why they are returning the Economic Impact Payment. Taxpayers should visit Economic Impact Payment Information Center on IRS.gov for information on how to return or request a replacement EIP debt card. When returning a payment for someone who has died: A payment made to someone who died before they received the payment should be returned to the IRS. Return the entire payment unless it was made to joint filers and one spouse is still living. In that case, return half the payment, but not more than $1,200. If someone can’t deposit a check because it was issued to both spouses and one spouse has died, the individual should return the check. Once the IRS receives and processes the returned payment, an Economic Impact Payment will be reissued to the surviving spouse. The IRS encourages people to share this information with family and friends.

Relief for taxpayers affected by COVID-19 who take distributions or loans from retirement plans WASHINGTON The Internal Revenue Service today released Notice 2020-50 (PDF) to help retirement plan participants affected by the COVID-19 coronavirus take advantage of the CARES Act provisions providing enhanced access to plan distributions and plan loans. This includes expanding the categories of individuals eligible for these types of distributions and loans (referred to as q...Continue reading

Taxpayers should be aware of myths about tax refunds Now that many taxpayers have filed their federal tax returns electronically and the IRS is back to processing paper tax returns sent by mail, they’re eager for details about their refund. When it comes to refunds, there are several common myths. Getting a refund this year means there’s no need to adjust withholding for 2020...Continue reading

IRS outlines changes to health care spending available under CARES Act WASHINGTON The Internal Revenue Service has advised that new rules under the CARES Act provide flexibility for health care spending that may be helpful in the current environment where more people may need at-home services due to measures to fight the coronavirus. Telehealth and High Deductible Health Plans... Under the CARES Act, a high deductible health plan (HDHP) temporarily can cover telehealth and other remote care services without a deductible, or with a deductible below the minimum annual deductible otherwise required by law. Telehealth and other remote care services also are temporarily included as categories of coverage that are disregarded for the purpose of determining whether an individual who has other health plan coverage in addition to an HDHP is an eligible individual who may make tax-favored contributions to his or her HSA. Thus, an otherwise eligible individual with coverage under an HDHP may still contribute to an HSA despite receiving coverage for telehealth and other remote care services before satisfying the HDHP deductible, or despite receiving coverage for these services outside the HDHP. The temporary rules under the CARES Act, as extended by IRS Notice 2020-29, apply to services provided on or after Jan. 1, 2020, with respect to plan years beginning on or before Dec. 31, 2021. Expansion of qualified medical expenses The CARES Act also modifies the rules that apply to various tax-advantaged accounts (HSAs, Archer MSAs, Health FSAs, and HRAs) so that additional items are qualified medical expenses that may be reimbursed from those accounts. Specifically, the cost of menstrual care products is now reimbursable. These products are defined as tampons, pads, liners, cups, sponges or other similar products. In addition, over-the-counter products and medications are now reimbursable without a prescription. The new rules apply to amounts paid after Dec. 31, 2019. Taxpayers should save receipts of their purchases for their records and so that they are able to submit claims for reimbursements.

Treasury, IRS provide tax relief to investors and businesses affected by COVID-19 in new markets tax credit transactions IR-2020-120, June 12, 2020 WASHINGTON The Treasury Department and the Internal Revenue Service today provided tax relief for certain taxpayers affected by the COVID-19 pandemic involved in new markets tax credit transactions.... The taxpayers receiving relief through today's guidance are community development entities (CDEs) and qualified active low-income community businesses (QALICBs) investing and conducting businesses in low-income communities. Notice 2020-49 (PDF) provides a CDE or QALICB with relief for certain specified time-sensitive acts that are due to be performed between April 1, 2020, and Dec. 31, 2020, in order to meet requirements under section 45D of the Internal Revenue Code and its regulations. A CDE or QALICB may perform these acts by Dec. 31, 2020. The additional time is provided for the following time-sensitive acts: Making investments If a CDE is due to invest cash received in a qualified low-income community investment (QLICI) on or after April 1, 2020, and before Dec. 31, 2020, that cash investment is treated as invested in a QLICI to the extent it is invested by Dec. 31, 2020. Reinvestments If a CDE is due to reinvest certain amounts of cash or payment in a QLICI on or after April 1, 2020, and before Dec. 31, 2020, the amounts are treated as continuously invested in a QLICI to the extent the amounts are so reinvested by Dec. 31, 2020. Expending amounts for construction of real property If a QALICB is due to expend the proceeds of a capital or equity investment or loan by a CDE for construction of real property on or after April 1, 2020, and before Dec. 31, 2020, such proceeds are treated as a reasonable amount of working capital of the QALICB if so expended by Dec. 31, 2020. Additional information about tax relief for businesses affected by the COVID-19 pandemic can be found on IRS.gov.

Balance Due Notice Mailings: Due Dates Extended to Help Taxpayers Due to the COVID-19 pandemic, the IRS was unable to mail some previously printed balance due notices as a result of office closures. As IRS operations continue to reopen, these notices will be delivered to taxpayers in the next few weeks. Given the time it would take to reprogram IRS systems, and generate updated notices, some of the notices taxpayers will receive have due dates that have already passed. Howeve...r, each notice will include an insert confirming that the due dates printed on the notices have been extended. Extended Payment Due Dates: The payment due dates printed on the notices have been extended, as described in the insert. The new payment due date will be either July 10, 2020, or July 15, 2020, depending upon the type of tax return and original due date. Taxpayers should be sure to read the insert included with the notice that explains the delay and provides the correct payment due dates. Taxpayers who have questions about their balance due should visit the website listed or call the number provided on their notice; however, keep in mind that phone lines remain extremely busy as the IRS resumes operations.

IRS reminder: Deadline postponed to July 15 for those who pay estimated taxes WASHINGTON The Internal Revenue Service reminds taxpayers that estimated tax payments for tax year 2020, originally due April 15 and June 15, are now due July 15. This means that any individual or corporation that has a quarterly estimated tax payment due has until July 15 to make that payment without penalty. In response to the COVID-19 outbreak, the Treasury Department and the Internal Revenue ...Continue reading

Who qualifies for which new employer tax credit? Many businesses affected by COVID-19 qualify for tax relief though credits or deferrals. Here’s a breakdown of which employers qualify for these new tax credits and the deferral of employment tax deposits and payments through Dec. 31, 2020. ... Credits for paid sick and family leave Businesses and tax-exempt organizations that have less than 500 employees and provide one or both types of leave can claim the refundable credits. Self-employed people can also claim similar credits. Some public employers must provide paid sick leave and family leave but, aren’t eligible for the credits. Guidance from the Department of Labor has details on these leave requirements. Employee Retention Credit The Employee Retention Credit is available to employers of any size, including tax-exempt organizations. It also may be available to tribes, if they operate a trade or business. Self-employed people can’t receive the credit for their own earnings but may be able to claim the credit for wages paid to their employees. Federal agencies, state and local governments and businesses that receive Paycheck Protection Program loans don’t qualify. Eligible employers are defined as those who operate a trade or business and experienced one of these: Fully or partially suspended operations because of a government order due to COVID-19 A significant decline in gross receipts in a calendar quarter when compared to 2019 Deferral of employment tax deposits and payments Employers may defer the deposit and payment of their share of Social Security tax and certain Railroad Retirement taxes. However, employers who receive a Paycheck Protection Program loan can’t defer their share of Social Security tax due after the lender forgives their loan. More information: COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses COVID-19-Related Tax Credits: Determining the Amount of the Tax Credit for Qualified Sick Leave Wages FAQs COVID-19-Related Tax Credits: Determining the Amount of the Tax Credit for Qualified Family Leave Wages FAQs FAQs: Employee Retention Credit under the CARES Act