Blackbull Accounting

You can’t stop him. Even knee surgery can only slow him down... for a bit! Zoom calls from the kitchen while elevating with ice. Total pro!

Update on tax plans for the two candidates from a tax/accounting website. The link is below. Here are the highlights: Election 2020: Comparing the Trump and Biden Tax Plans Joe Biden’s Tax Plan: Individual tax rates: Biden wants to restore the 39.6% rate for folks with taxable income above $400,000 (up from a top rate of 37%0...Continue reading

I've gotten a number of questions about the payroll tax deferral. I've written about this a few times, but there is still some confusion. Here's a quick synopsi...s: 1, The payroll tax deferral begins Sep 1 and lasts through Dec 31, 2020. 2, An IRS rep has confirmed that participation in the deferral is optional. Opting in is made by the employer, not the employee (some employers may choose to give employees a say but you cannot, as an employee, insist on participating if your employer does not, or vice versa). Federal employees - including the military - have already been advised that they must participate. 3, Eligible employees are typically those that make under $100k/year (there's a specific formula but that's a good guideline). 4, As currently written, you MUST pay it back. Repayment starts in January and will be in addition to your "normal" Social Security tax. Here's how that works: currently, you pay 6.2% in Social Security tax. If you participate in the deferral, you will stop paying that 6.2% through December. But, beginning in January, you have to pay it back "ratably" - that works out for most taxpayers to 12.4% in withholding (your normal 6.2% + the repayment piece of 6.2%) through April. You'll want to plan ahead to save as you go, so that you can be prepared for repayment.

"No work is insignificant. All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence" ~Dr. Martin Luther King, Jr.

More about the payroll tax deferral, but perhaps not more clarity.

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This was the single largest problem during tax season. And I’ve already had a few clients falsely assume they can pull out $100k of retirement tax free because of the plague. FALSE!!! It’s still taxable, just no 10% penalty. It is not wise to withdrawal more than $10k for home purchase either. The tax and the penalty increase the cost of the home and create unexpected large tax liabilities.

PANDEMIC UNEMPLOYMENT ASSISTANCE (PUA) PROGRAM for self-employed, independent contractors, and gig workers!! The Employment Development Department (EDD) will be accepting on-line applications for this program beginning on Tuesday, April 28. As part of the federal CARES Act, the new Pandemic Unemployment Assistance (PUA) program helps unemployed Californians who are business owners, self-employed, independent contractors, have limited work history, and others not usually eligible for regular state UI benefits who are out of business or services are significantly reduced as a direct result of the pandemic.

COVID-19 STIMULUS PAYMENT UPDATE First, do NOT call the IRS. They are working on the guidelines, which we are expecting to have clarified VERY soon. The IRS has some staff working remotely (don't know how that works) and are down to a skeleton staff to maximize social distancing. Be patient as they are working to process tax returns, ID theft, and now stimulus payments. Second, the payments WILL NOT go out on April 6th as first thought. It could day 3, 4, 5... weeks. Again, ...be patient while they sort out how to release MILLIONS and MILLIONS of dollars. It is an epic feat! The preferred method of delivery for stimulus payments is DIRECT DEPOSIT. The IRS is setting up a website/portal where you can update your direct deposit info if your most recent tax filing did not have your current info. Again, be patient and wait for that site to come online. While the government sites are pretty sturdy, we recommend using them late at night (West coast) and VERY early in the morning (East coast) to prevent a flood that results in a crash. Next, the stimulus will be based on your 2019 filing, and if you have not filed yet, it will be based on your 2018 filing. If you have less money now, or more kids now, that will NOT be factored into your payment. THE QUESTION FEW ARE ASKING: Do I have to pay this back? ANSWER: it depends! The famously vague language is that if your 2020 income is substantially more than your 2019 income, then you MAY have to repay all or some of the stimulus payment. We are interpreting that to mean, if your 2020 income breaches the stimulus phase out limits ($75-99k for singles, $150-198k for marrieds), then you may have to repay. If you are at or below those limits, we are not currently anticipating a repayment. Of course, this can change at any time. IRS decided NOT to require tax filings from those receiving Social Security benefits and will instead use the SSA info to distribute their stimulus payment. For those who are not required to file a tax return, and are not receiving Social Security/Disability Income (SSA / SSDI), there will be a "simplified return" process to allow you to receive a stimulus payment. Also keep in mind there are other benefits available like Food Stamps/SNAP, utility discount programs, United Way, Red Cross, Catholic Charities, local Food Banks, and more. Check within your local community for assistance IF YOU NEED IT. Free stuff is great, but let's all work to be generous towards those who NEED the help and not take more than we need. We are all in this together... the whole freaking planet. We are in the best country in the world to weather this storm. If you doubt that, check out what is happening in South America, India, and more. Hang in there, spend some time in prayer, and be kind. We will rise! https://www.irs.gov/coronavirus

In the coming weeks, avoid calling the IRS to ask questions that can be answered online. They will be swamped for weeks/months, are understaffed due to the virus, and are horribly overworked right now. They are humans, not robots, and we are all capable to find info ourselves. Check "the google"! Next... Beware of Stimulus Payment Scams 1. Be alert for phone scams. ... The Internal Revenue Service (IRS), Treasury Department, or any other government agency WILL NOT contact you by phone to collect information for stimulus payment processing. Period. 2. Be alert for phishing scams. Government agencies WILL NOT email or text you to collect information for stimulus payment processing. Watch for suspicious emails or texts with links or attachments requesting information for processing stimulus deposits or checks. If you receive one, DO NOT CLICK THE LINK OR OPEN ANY attachments. Not even on your phone! It’s a scam. Delete it. 3. Be alert for state-related scams. State agencies will also NOT call, email or text you to collect information or a fee to process a stimulus payment. As of now, we are only aware of one communication a taxpayer will receive from the IRS. No later than 15 days after distributing a stimulus payment, the IRS is required to mail a notice to the taxpayer indicating the payment amount, whether the payment was mailed or deposited, and a phone number to call if the taxpayer did not receive the payment. Victims or targets of stimulus payment scams should report it immediately to the Federal Trade Commission, www.ftc.gov/complaint.