It’s not often that I find myself feeling sorry for the IRS, but life is a little tough for the IRS right now. Congress has enacted several new tax law changes in the past couple months and the IRS is implementing these and working hard to help you.
The list of changes is lengthy and complicated but I wanted to be sure to convey these important changes that are happening right now.
STIMULUS
The new relief bill has approved a $1400 stimulus check to each taxpayer. We knew this was coming but at the last minute the income threshold of who qualified for the stimulus changed. The income levels are much lower than we originally anticipated. The stimulus is calculated on your most recently filed tax return using Line 11 of your 1040.
Click here to find out how much your third stimulus check will be using this handy tool.
Checks are expected to be issued by the IRS the week of March 15th.
UNEMPLOYMENT
The new relief bill has retroactively made up to $10,200 of your unemployment in 2020 nontaxable. Yes, you read that correctly. In the middle of March Congress changed the tax law for the previous year. This means that millions and millions of returns will have to be amended for last year. If you have filed a return with Storen Financial, we will pull the list of clients that have already filed and we will begin working on amending these returns once the IRS updates its systems and our software is updated. We will contact you once your amended return is ready.
Very important! Amendments take 6-12 weeks to process so if you owe money, please pay your tax bill by April 15th and the IRS will send you a refund once your return has processed. If you do not pay your tax bill, you will begin receiving notices of underpayment.
TAX SEASON
There are still lots of requests by Congress for the IRS to delay the filing deadline for this tax season. The IRS will have to reprogram its systems once this bill is signed. We have heard the IRS will stop accepting returns for about a week, in order to send out stimulus checks and to make changes. We will let you know if anything gets delayed. Stay tuned for future updates!
If you have any questions, please contact us.
Blog by Kim Storen, EA – Tax Team Lead, Senior Tax Professional
Learn more about Kim and the rest of the Storen Financial team here.