News & Tech Tips

Social Security Recipients Will Automatically Receive Economic Impact Payments

Kathleen Hargrove on April 6, 2020

Last week, the Treasury Department and the IRS announced that social security beneficiaries will not need to file a “simple” return to receive an economic impact payment and that the payment will be automatic.

Previously, the IRS had stated that people who did not file a 2018 or 2019 federal income tax return, including individuals who typically are not required to file a return, would need to submit a “simple” tax return to receive the stimulus payment.

The Treasury Department’s most recent press release states that social security beneficiaries who are not typically required to file tax returns will not need to file a “simple” tax return to receive an economic impact payment. Instead the payments will be automatically deposited into their bank accounts.

According to the press release, the IRS will use the information on Form SSA-1099 to distribute $1,200 economic impact payments to Social Security recipients who did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits.

Questions about this announcement or anything else? Contact your Whalen advisor here.

 
SOURCES: Thomson Reuters, U.S. Department of the Treasury

IRS Issues Warning About Coronavirus-Related Scams

Kathleen Hargrove on April 3, 2020

The IRS is urging 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.
Taxpayers should watch not only for emails but, text messages, websites and social media attempts that request money or personal information.

“History has shown that criminals take every opportunity to perpetrate a fraud on unsuspecting victims, especially when a group of people is vulnerable or in a state of need,” said IRS Criminal Investigation Chief Don Fort. “While you are waiting to hear about your economic impact payment, criminals are working hard to trick you into getting their hands on it. The IRS Criminal Investigation Division is working hard to find these scammers and shut them down, but in the meantime, we ask people to remain vigilant.”

Don’t Fall Prey to Coronavirus Tricks

The IRS and its Criminal Investigation Division have seen a wave of new and evolving phishing schemes against taxpayers. In most cases, the IRS will deposit economic impact payments into the direct deposit account taxpayers previously provided on tax returns. Those taxpayers who have previously filed but not provided direct deposit information to the IRS will be able to provide their banking information online to a newly designed secure portal on IRS.gov in mid-April. If the IRS does not have a taxpayer’s direct deposit information, a check will be mailed to the address on file. Taxpayers should not provide their direct deposit or other banking information for others to input on their behalf into the secure portal.

The IRS also reminds retirees who don’t normally have a requirement to file a tax return that no action on their part is needed to receive their $1,200 economic impact payment. Seniors should be especially careful during this period. The IRS reminds retirees – including recipients of Forms SSA-1099 and RRB-1099 −  that no one from the agency will be reaching out to them by phone, email, mail or in person asking for any kind of information to complete their economic impact payment, also sometimes referred to as rebates or stimulus payments. The IRS is sending these $1,200 payments automatically to retirees – no additional action or information is needed on their part to receive this.

The IRS reminds taxpayers that scammers may:

  • Emphasize the words “Stimulus Check” or “Stimulus Payment.” The official term is economic impact payment.
  • Ask the taxpayer to sign over their economic impact payment check to them.
  • Ask by phone, email, text or social media for verification of personal and/or banking information saying that the information is needed to receive or speed up their economic impact payment.
  • Suggest that they can get a tax refund or economic impact payment faster by working on the taxpayer’s behalf. This scam could be conducted by social media or even in person.
  • Mail the taxpayer a bogus check, perhaps in an odd amount, then tell the taxpayer to call a number or verify information online in order to cash it.
Reporting Coronavirus-Related or Other Phishing Attempts
Those who receive unsolicited emails, text messages or social media attempts to gather information that appear to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), should forward it to phishing@irs.gov.

Taxpayers are encouraged not to engage potential scammers online or on the phone. Learn more about reporting suspected scams by going to the Report Phishing and Online Scams page on IRS.gov.

 
SOURCE: IRS.gov

Tax Deadline Extended

Kathleen Hargrove on March 21, 2020

Treasury Secretary Steven Mnuchin announced Friday that President Trump has directed him to move Tax Day to July 15, giving taxpayers more time to file their taxes in the midst of the coronavirus pandemic.

 

All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.

In addition, the IRS released IR-2020-58 on Saturday which has additional updates regarding this extended due date and the payment of federal income tax returns. Highlights from the notice include:

  • Due date will automatically extend from 4/15 to 7/15  – no extension forms are needed.
  • Payment, regardless of the amount, can also be deferred until 7/15, without penalties and interest.  There is no longer a $1 million or $10 million limit. This 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.
  • The period beginning on 4/15/20 and ending on 7/15/20 will be disregarded in the calculation of any penalty, interest or addition of tax for failure to file the federal income tax returns or pay the federal income tax postponed by the Notice.
  • Individuals who need an additional extension beyond 7/15 will need to file the proper extension form and pay the tax by 7/15.
  • Currently, this extension is only for those taxes due 4/15.  This means the second quarter estimates due 6/15 will still be be due by that date.
The IRS still urges those individuals who have refunds to file as soon as possible and to file electronically.  The IRS is continuing to accept tax returns and send refunds.
Please note that this extended due date is for federal returns only. Ohio and it’s municipalities have yet to announce extensions yet, but we will continue to keep an eye on this and notify you should this change. 

IRS Announces Tax Relief for Tennessee Victims

Kathleen Hargrove on March 10, 2020

Victims of the severe storms, tornadoes, and flooding last week in Tennessee may qualify for tax relief from the IRS.
Following the recent disaster declaration for individual assistance issued by the Federal Emergency Management Agency, the IRS has announced that affected taxpayers in certain areas will receive tax relief.
Individuals and households who reside or have a business in Davidson, Putnam and Wilson counties may qualify for tax relief.
The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after March 3, 2020, and before July 15, 2020, are granted additional time to file through July 15, 2020.
The July 15, 2020 relief applies to the individual income tax returns due on April 15, 2020 and quarterly estimated income tax payments due on April 15, 2020, and June 15, 2020,and to quarterly payroll and excise tax returns normally due on April 30, 2020. It also applies to tax-exempt organizations, operating on a calendar-year basis, that have a 2019 return due on May 15, 2020. Among other things, affected taxpayers will also have until July 15, 2020 to make their 2019 IRA contributions. In addition, penalties on payroll and excise tax deposits due on or after March 3, 2020 and before March 18, 2020, will be abated as long as the tax deposits were made by March 18, 2020.
If an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.
The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief, but affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.
As always, if you have any questions about how this announcement may effect you or your business, please contact your Whalen Advisor. 
 
SOURCE:

What Does the Fed’s Interest Rate Cut Mean For Mortgages?

Kathleen Hargrove on March 5, 2020

Mortgage rates fell to their lowest level on record today, pulled down by fears that the spread of coronavirus could weigh on the U.S. economy.

The average rate on a 30-year fixed-rate mortgage fell to 3.29% from 3.45% last week. Mortgage rates are closely linked to yields on the 10-year Treasury, which this week dropped below 1% for the first time following an emergency Federal Reserve rate cut.

A decline in mortgage rates typically boosts home sales, but worsening coronavirus epidemic and the efforts to contain it could keep would-be home buyers on the sidelines during what is usually a busy spring selling season.

The decline in rates is likely to continue to fuel a refinancing frenzy that pushed mortgage lending to its highest level since 2006 last year. About 14.5 million homeowners would benefit from refinancing if 30-year rates hit 3.25%, just below their current level, according to mortgage-data firm Black Knight Inc.

Refinancing applications were up 26% from the previous week and more than 200% from the same time last year, according to Mortgage Bankers Association data released Wednesday.

The jump in refinancings poses a challenge for banks and other mortgage lenders, which often hire staff when the housing market picks up each spring.

 

Thinking about refinancing or have questions on how this rate cut could benefit you? Contact us for help!

 

SOURCE: Wall Street Journal

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