Nellie's Income Tax Services

***IRS UPDATE*** IRS will recalculate taxes on 2020 unemployment benefits and start issuing refunds in May! Normally, any unemployment compensation someone receives is taxable. However, a recent law change allows some recipients to not pay tax on some 2020 unemployment compensation. ... The IRS will automatically refund money to eligible people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan. These refunds are expected to begin in May and continue into the summer. FOR PEOPLE WHO ALREADY FILED THEIR 2020 TAX RETURN: This law change occurred after some people filed their 2020 taxes. For taxpayers who already have filed and figured their 2020 tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation. Any resulting overpayment of tax will be either refunded or applied to other taxes owed. The taxing agency will do these recalculations in two phases. First, taxpayers who are eligible to exclude up to $10,200. Second, those married filing jointly who are eligible to exclude up to $20,400, and others with more complex returns. Taxpayers only need to file an amended return if the recalculations make you newly eligible for additional federal tax credits or deductions not already included on your original tax return. For example, the IRS can adjust returns for taxpayers who claimed the earned income tax credit and, because the exclusion changed their income level, may now be eligible for an increase in the EITC amount. However, you would have to file an AMENDED REUTRN IF you did not originally claim the EITC or other credits but are now eligible to claim them following the change in the tax law. You can use the EITC Table 1 we've included in this post to see if you qualify for this credit based upon the new taxable income amount. If you now qualify, you should consider filing an amended return to claim this credit. We can definitely help file your amended return if need be, post tax season! Happy filing everyone! Nellies Income Tax Services

You may have already heard... We are confirming that the tax-filing deadline this year has indeed been extended to May 17 from the usual April 15! (Don't wait till the very last minute to file!) If you filed your return and are still waiting for your refund, it may or may not be delayed, depending on the specifics of your situation.... The IRS is still advising taxpayers who already filed to wait for further guidance on recouping any additional amount you are owed. Given that temporary tax changes have taken effect since many of those refunds went out including waiving federal taxes on $10,200 in unemployment benefits and forgiving excess health insurance premium tax credits some households will end up getting an unexpected refund (or a bigger one). Waiting is the name of the game folks. Always happy to provide assistance! Happy Friday everyone! Nellies Income Tax Services Accountants

Greetings!! As you may have already heard, President Joe Biden signed into law the American Rescue Plan Act on Thursday, which includes a new round of stimulus checks (many of our clients have reported that they received their $1400 stimulus in their bank accounts yesterday! ) and expands the child tax credit. The rescue package also continues federally enhanced unemployment at $300 per week until Labor Day and adds a new tax waiver for some families. The relief package off...ers $1,400 stimulus checks to individuals who earned less than $75,000 a year and phases out at $80,000. If your 2020 income was lower than your 2019 earnings, you might want to file your taxes sooner rather than later in order to get the latest stimulus check more quickly. Which tax waiver are we talking about, you may ask? A new provision waives federal taxes on the first $10,200 of unemployment benefits you received in 2020. Married couples who file jointly and both collected unemployment insurance benefits in 2020 will have taxes waived on $10,200 per person, or up to $20,400 of UI benefits total. The waiver applies to individuals and married couples who made less than $150,000 in adjusted gross income in 2020. Some states have decided that they will also offer the break on state income taxes. Some like California, Montana, New Jersey, Pennsylvania and Virginia already exempt taxes on unemployment. (Shout out to our clients out of state! ) What if you’ve already filed your 2020 taxes? The IRS hasn’t issued formal guidance on this yet. We don't know yet if the IRS will apply those changes or we may have to file an amended return. (Click on link below for IRS Statement on the topic.) If your return has already been processed and you’ve received a refund, we may likely have to file an amended tax return in order to claim the $10,200 exemption. Again, this is still unclear and we shall wait for the IRS for guidance on this. (Click on link below for IRS Statement on the topic.) If you’ve filed your return but hasn’t been processed by the IRS, it could be delayed. If you were expecting a refund, that could be delayed as well. However, after factoring in the $10,200 tax waiver, your refund may end up being larger than you originally expected as a result. If you already withheld or paid taxes on your unemployment benefits throughout the year, you may now be entitled to a refund. All still fresh news and these changes will take some bit of time. We'll have to wait for further instruction from the IRS, but for now we are happy to say we are hard at work as this is peak tax season and always happy to assist. To those who have chosen Nellies income tax to to file your income tax return, thank you again for supporting our small business. We appreciate you. Stay safe! -Nellies Income Tax Services P.S. Here's a statement from the IRS regarding the American Rescue Plan Act and all the changes what will apply. https://www.irs.gov//irs-statement-american-rescue-plan-ac

***Taxpayers should beware of ghost preparers*** Taxpayers are reminded to avoid unethical ghost tax return preparers *A ghost preparer is someone who doesn’t sign tax returns they prepare. Unscrupulous ghost preparers often print the return and have the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost will prepare but refuse to digitally sign as the paid preparer.... By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number (PTIN). Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. Ghost tax return preparers may also: Require payment in cash only and not provide a receipt. Invent income to qualify their clients for tax credits. Claim fake deductions to boost the size of the refund. Direct refunds into their bank account, not the taxpayer's account. This doesn't affect the ghost preparer, it affects you the Taxpayer and can get messy for you. Pay attention on if they are a "pop up" office and if they have a PTIN to properly file your taxes. There are ways you can report preparer misconduct and also ways to protect yourself. Most of all...Taxpayer should verify their routing and bank account number on the completed tax return for any direct deposit refund. Taxpayers should watch out for ghost preparers putting their bank account information on the returns. Go to irs.gov to find out further information. We are always happy to assist and we strive on providing you with quality service always. We are a year round tax office! Happy filing!

If you haven't already heard, Tax filing season will officially open Feb. 12, 2021. We have begun accepting and processing tax returns (since the beginning of last month). You, the taxpayers, can work with us (remotely- from the comfort and safety of your home, all you need is mobile phone device or ) and we can start filing returns; however, tax returns won’t be transmitted to the IRS until Feb. 12. April 15, 2021, remains as the current deadline for filing 2020 returns.... There's speculation that the IRS will push the date back to July 15, 2021, like last year. We will update you further on the tax deadline once we get word. Why the late start for transmittal of tax returns? This late start allows the "IRS time to do additional programming and testing of IRS systems following the Dec. 27 tax law changes that provided a second round of economic impact payments (EIP) and other benefits. This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a recovery rebate credit when they file their 2020 tax return. We'll continue to keep you all updated! Happy first day of #BlackHistoryMonth Please stay safe everyone and happy tax filing! Thank you for supporting small businesses like our own! -Nellies Income Tax Services

Update: IRS provides tax relief for victims of Hurricane Laura; Oct. 15 deadline, other dates extended to Dec. 31 The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug. 22, 2020. As a result, affected individuals and businesses will have until Dec. 31, 2020, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2019 return due to run out on Oct. 15..., 2020, will now have until Dec. 31, 2020, to file. The IRS noted, however, that because tax payments related to these 2019 returns were due on July 15, 2020, those payments are not eligible for this relief. The Dec. 31, 2020 deadline also applies to quarterly estimated income tax payments due on Sept. 15, 2020, and the quarterly payroll and excise tax returns normally due on Nov. 2, 2020. It also applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on Nov. 16, 2020. Businesses with extensions also have the additional time including, among others, calendar-year corporations whose 2019 extensions run out on Oct. 15, 2020. for more information please visit www.irs.gov

If you have Federal Tax liability and forgot to send payment via mail, you can go to the irs.gov website and make a payment or setup installation agreement (payments) if need be. Please do so today, if you haven't already to avoid some penalties! (In case you weren't able to pay the full amount, pay a portion of it TODAY.) It's been a very busy Tax year. We've had to make adjustments and adapt to this new norm we are currently living. ... We are happy and blessed that we were able to assist you all throughout this extended tax year! Stay safe everyone! -Nellie's Income Tax Services Staff P.S. We are a year-round business, so in case you received a letter from the IRS/State and are clueless as to what's being asked of you or if you filed an extension and would like for us to help assist in preparing your taxes, please reach out! We love our job!

Tax Updates as of 7/8/2020 (3pm pacific time as there's daily changes to tax related laws): ***There's 1 week left to this prolonged tax season (July 15th) and if you do not have your tax docs ready and in order you have the option to file an extension (good till Oct. 15th), but extension must be filed on or before JULY 15! [Please keep in mind that the extension helps eliminate the penalty if full balance is paid within the extended period. Interest will still be owed on b...alance due.] ***If you haven't received your stimulus check and you believe you are owed a stimulus, the IRS announced that they will start to process paper returns August 1st. This will prolong the wait even longer. ***Those that have sent applications for ITINS or sent renewals have opened their offices yesterday. ***If you owe and have already filed your return and find yourself with not enough funds (financial hardships) you can setup installment agreements with the IRS. Please be aware that most of IRS services have been closed and lots services will be (has been) pushed back. If you have the option to e-file please do so rather than mail in a paper return. Please stay safe! And be kind to one another! -Nellies Income Tax Services

An update for those who don't qualify for unemployment!! PUA comes into play! Information is now available on state website!! ***NEW***... PANDEMIC UNEMPLOYMENT ASSISTANCE (PUA) PROGRAM This is a newly available emergency unemployment assistance program under the federal CARES Act. PUA provides assistance for unemployed or partially unemployed individuals who are not eligible for regular unemployment insurance and who are unable or unavailable to work due to COVID-19 related circumstances. The Employment Development Department (EDD) will be accepting on-line applications for this program beginning on Tuesday, April 28. Check back on this page for the latest updates. https://www.labor.ca.gov/pandemic-unemployment-assistance-/

For Filers the IRS has released the "Get Your Payment" Portal today! Use the "Get My Payment" to: Check your payment status... Confirm your payment type: direct deposit or check Enter your bank account information for direct deposit if they don't have your direct deposit information and they haven't sent your payment yet Update your bank account or mailing address If they don’t have your direct deposit information from your 2018 or 2019 return and if they haven’t yet sent your payment use the Get My Payment application to let us know where to send your direct deposit. Note: this is a brand new tool so there's no guarantee that it'll be working accurately, yet. Also the IRS aren't currently able to process individual PAPER tax returns due to the COVID-19 outbreak. We are filing all returns electronically and get transmittal information less than 5 hours. Reach out to us if you'd like to know how we are working with non contact services and send us your tax documents securely and from the comfort of your own home. Also most of our clients have notified us that they have already received their stimulus check starting yesterday! https://www.irs.gov/coronavirus/economic-impact-payments

****For non-filers who want to receive Stimulus**** Here's a link that will direct you to the IRS web page portal to enter Direct Deposit information. Please share to those who need this as payments have begun to roll out. https://www.irs.gov/coro/non-filers-enter-payment-info-here... ***For Filers, that info. is not yet available! IRS states it'll be ready till mid April. **Also please be aware that the check must come from the US Ttreasury! There are many fraudulent checks going around. If it's a strange looking check and has a strange amount or says stimulus on it, it is fake! Please be aware! *Also, if you moved since you last filed, let us (or your tax professional) know your new mailing address! More developing information to you all. Stay tuned.

***COVID-19 FUNDING FOR SMALL BUSINESSES*** The signing of the CARES Act last Friday created the PPP and materially modified the EIDL, there are many details that are still not available but we expect further clarity in the coming week. We want to make sure you are aware of the two loan programs that the SBA will be making available related to the COVID-19 situation.... More on CARES ACT: https://www.congress.gov//116th-congr/house-bill/748/text Paycheck Protection Program (PPP) SBA Loan for 2.5 times a small business’ (500 employees or less) average monthly Payroll costs over the past year up to a maximum of $10M Forgivable Amount the business can apply for forgiveness of this loan up to the amount borrowed. If you are considering applying for the PPP, we would recommend that you CALL YOUR BANKER TODAY AND TELL THEM YOU WANT TO APPLY FOR A PAYCHECK PROTECTION PROGRAM LOAN. The Application process starts TODAY!! https://home.treasury.gov/system/files//PPP--Fact-Sheet.pdf https://www.sba.gov/fundi//paycheck-protection-program-ppp Economic Injury Disaster Loan (EIDL) SBA Loan up to $2M at 3.75% with repayment terms up to 30 years https://covid19relief.sba.gov/#/ These applications require a personal financial statements. This is also documentation that requires data collection on each owner’s part. If you do not have an updated personal financial statement, you may want to get the information together. The SBA has a template you can find on their website. Other Coronavirus Relief Options provided by SBA go here https://www.sba.gov/funding-pr//coronavirus-relief-options ------------------------------------------------------------------------------------------------------ We are here to help provide guidance and resources for our small business owners. Please make the adequate research to help make a decision. Also keep in mind there are EDD information constantly updating too. Although their website aren't up to date, we will be providing further unemployment information as we get it.

The IRS has released further details regarding your stimulus check. Who qualifies? When will I get it? How can I get it directly deposited to my bank account? Etc. Etc. In this great article, most of your questions are answered.... We are working diligently and we want you all to know that we can help you file your taxes from the comfort of your home. Contact us for more information. Stay home, stay safe. https://www.forbes.com//irs-gives-stimulus-check-timeline/

Unsure of what this means to you? Here's an article that helps answer most questions. All other questions left unanswered, we advise you to contact the IRS directly as there is lots still unfolding. https://www.nytimes.com//coronavirus-stimulus-package-ques

***The latest news regarding the stimulus check*** "The Senate passed the bill 96 to 0, and the House is expected to follow suit on Friday." Here's an article summarizing the new stimulus bill and overall get some questions answered here.... Who qualifies? How much will you receive? When? Keep in mind the IRS will be working out the details for all types of cases. So stay tuned. https://www.nbcnews.com//coronavirus-checks-direct-deposit

********More IMPORTANT BREAKING NEWS******** ****The Wall Street Journal is reporting that Treasury Department has extended the filing deadline to July 15th as of this morning. No official press release from IRS yet, this is brand new info. ****Congress is debating an "economic stimulus package" that likely will include some type of cash payment to taxpayers. HOWEVER, as of this morning, nothing definitive has been passed.... ****California initiates "shelter-in-place" rules, including mandatory closure of "non-essential" businesses. Tax and accounting companies are categorized as an "essential" business and are permitted to stay open if we so choose. We are still open and working diligently to continue to provide quality service! No need to come to the office for a face-to-face meeting, you can do it from the comfort of your own home. Contact us for more info. https://www.wsj.com//u-s-extends-individual-tax-filing-dea

*******IMPORTANT TAX DEVELOPMENTS******** ***First, we wanted to clarify that the DEADLINE to file your 2019 taxes is still April 15! We repeat.. you still have to file by the 15th of April. ... The IRS released Notice 2020-17, an official announcement which clarifies several important points about the whole "Coronavirus Emergency Tax Season Extension Issue".. The 90 day extension is for those that know they owe money...it's an extension to PAY federal income taxes which was originally due by April 15. Please note, it is NOT an extension to file the tax return. ***Secondly, we are seeing some NEW SCAMS emerge regarding this new $1,000 "stimulus payment" that might be going out to everyone in the next few weeks. These crafty scammers have started calling, text messaging, and emailing people to "sign up" to receive the $1,000 check and they try to get all your personal information when you "sign up" for your stimulus check. Please share this message to spread the word and help give some clarity to all and most of all prevent these scammers from taking advantage of anyone.

In light of our current situation, we are proud to say that you can connect with us online in the comfort and safety of your own home. We can answer all your questions and file your taxes without the need for an office visit. Our online tools make the process quick and secure. We want you to feel 100% confident and secure. We are here to help.... ***************************************************** Debido a nuestra situación actual, nos enorgullece decir que puede conectarse con nosotros online desde la comodidad y seguridad de su hogar. Podemos responder a todas sus preguntas y presentar sus impuestos sin la necesidad de una visita a nuestra oficina. Nuestras herramientas online hacen que el proceso sea rápido y seguro. Queremos que se sienta 100% en confianza y seguro. Estamos aquí para servirles.