Category Archives: Updates

Update on the 2020 Extension of Tax Season

Good news!!

American Rescue Plan tax relief
Filing and payment due dates: Oregon joins the IRS in automatically extending the tax filing and payment due dates for individuals to May 17.
Unemployment benefits: Taxpayers who received unemployment benefits in 2020 should wait for further information from the IRS and the Oregon Department of Revenue before filing an amended tax return or filing a new return. https://www.oregon.gov/dor/Pages/index.aspx

1st Quarter Estimated payments are still due on April 15th.

More details and guidance will be coming from IRS and Oregon.

Please watch the website for more details.

IRS extends filing season by 30 days

Just Released:

The Treasury and IRS extend filing and payment deadline to May 17

WASHINGTON — The U.S. Department of the Treasury and the Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021.

IR-21-59

Additional details on the taxpayer relief announced today are available on https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-and-payment-deadline

Oregon has not announced it they will follow extend the deadline at this time.

Economic Impact Payment #2

Here is the latest from the IRS on the on Coronavirus Tax Relief

The Internal Revenue Service and the Treasury Department have started delivering a second round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans who received the first round of payments earlier this year.

No action is required by eligible individuals to receive this second payment. The IRS reminds taxpayers that the payments are automatic, and they should not contact their financial institutions or the IRS with payment timing questions.

As with the first round of payments, most recipients will receive these payments by direct deposit. For Social Security and other beneficiaries who received the first round of payments via Direct Express, they will receive this second payment the same way.

Economic Impact Payments

You may be eligible to get a second Economic Impact Payment. In most cases, those who are eligible will receive a payment automatically.

Check your payment status.

2020 Charitable Donations Update

Did you know that there is still time to make your 2020 donations? You have until December 31st to make any donations for the 2020 tax year.

New for the 2020 tax year (only), the CARES (the Coronavirus Aid, Relief and Economic Security Act) the IRS has made a few changes (IRS Topic No 506 ).

#1 For taxpayer who do not itemize their deductions they may take up to $300 in a charitable deduction of cash contributions made during the 2020 year to qualified charities.

From the IRS Website : For contributions of cash, check or other monetary gift (regardless of amount), you must maintain a record of the contribution:

A bank record or a written communication from the qualified organization containing the name of the organization, the amount, and the date of the contribution.
In addition to deducting your cash contributions, you generally can deduct the fair market value of any other property you donate to qualified organizations. See Publication 561, Determining the Value of Donated Property.
For any contribution of $250 or more (including contributions of cash or property), you must obtain and keep in your records a contemporaneous written acknowledgment from the qualified organization indicating the amount of the cash and a description of any property contributed. The acknowledgment must say whether the organization provided any goods or services in exchange for the gift and, if so, must provide a description and a good faith estimate of the value of those goods or services. One document from the qualified organization may satisfy both the written communication requirement for monetary gifts and the contemporaneous written acknowledgment requirement for all contributions of $250 or more.
If you are unsure if your charity qualifies please check with the Tax Exempt Organization Search tool found on IRS.gov.

#2 The CARES Act has temporarily (2020 only) suspended limits on charitable contributions and increased the limits on contributions of food inventory (again only for 2020). The new limit for charitable contribution (if you itemize) is 100% of your AGI.

To qualify, the contribution must be:

a cash contribution;
made to a qualifying organization;
made during the calendar year 2020

Contributions of non-cash property do not qualify for this relief. Taxpayers may still claim non-cash contributions as a deduction, subject to the normal limits.

If you want to read more on the changes to charitable contributions do to the CARES Act please find them on the IRS website HERE

If you have any questions please feel free to give us a call. We hope you have a wonderful Holiday season and we look forward to see you soon.

Upcoming Tax Season

It is getting close to being that time of year yet again. Tax season will be upon us before we know it. Because of Covid-19 there will be some changes in how we are going to handle appointments this year. We will do our best to accommodate everyone with the safest method possible.

We will be offering the following:

Phone conferences- These can be held before or after you drop off your documents.
Zoom meeting-These can be held before or after you drop off your documents.
Drop offs, mail in or portal delivers with no scheduled meeting. We will then email you a list of questions, concerns or missing items.
In person meeting-These will be very limited and we will be following the CDC guidelines for allowing people in the office.

We will send a letter with the organizers with more details on how we plan to proceed. If you have any concerns please call us at 541-738-4313.

Please stay up to date with the latest CDC guidelines HERE

Please stay up to date with the latest Benton County Covid-19 guidelines and restrictions HERE

Non Filers and the Economic Impact Payment

IRS released a new web portal for individuals who normally do not need to file Federal taxes.

Below is straight from the IRS website

Who is eligible for the Economic Impact Payment?

U.S. citizens or resident aliens who:

Have a valid Social Security number,
Could not be claimed as a dependent of another taxpayer, and
Had adjusted gross income under certain limits.

Who will receive the Economic Impact Payment automatically without taking additional steps?

Most eligible U.S. taxpayers will automatically receive their Economic Impact Payments including:

Individuals who filed a federal income tax for 2018 or 2019
Individuals who receive Social Security retirement, survivors, or Social Security Disability Insurance benefits
Individuals who receive Railroad Retirement benefits

Who should use Non-Filers: Enter Payment Info to provide additional information to receive the Economic Impact Payment?

Eligible U.S. citizens or permanent residents who:

Had gross income that did not exceed $12,200 ($24,400 for married couples) for 2019
Were not otherwise required to file a federal income tax return for 2019, and didn’t plan to

You can provide the necessary information to the IRS easily and quickly for no fee through Non-Filers: Enter Payment Info. We will use this information to determine your eligibility and payment amount and send you an Economic Impact Payment. After providing this information you won’t need to take any additional action.

Non-Filers: Enter Payment Info Here

Information You will Need to Provide

Full name, current mailing address and an email address
Date of birth and valid Social Security number
Bank account number, type and routing number, if you have one
Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year, if you have one
Driver’s license or state-issued ID, if you have one
For each qualifying child: name, Social Security number or Adoption Taxpayer Identification Number and their relationship to you or your spouse

What to Expect

Clicking “Non-Filers: Enter Payment Info Here” above will take you from the IRS site to Free File Fillable Forms, a certified IRS partner. This site is safe and secure.

Follow these steps in order to provide your information:

Create an account by providing your email address and phone number; and establishing a user ID and password.
You will be directed to a screen where you will input your filing status (Single or Married filing jointly) and personal information.
Note: Make sure you have a valid Social Security number for you (and your spouse if you were married at the end of 2019) unless you are filing “Married Filing Jointly” with a 2019 member of the military. Make sure you have a valid Social Security number or Adoption Taxpayer Identification Number for each dependent you want to claim for the Economic Impact Payment.
Check the “box” if someone can claim you as a dependent or your spouse as a dependent.
Complete your bank information (otherwise we will send you a check).
You will be directed to another screen where you will enter personal information to verify yourself. Simply follow the instructions. You will need your driver’s license (or state-issued ID) information. If you don’t have one, leave it blank.

You will receive an e-mail from Customer Service at Free File Fillable Forms that either acknowledges you have successfully submitted your information, or that tells you there is a problem and how to correct it. Free File Fillable forms will use the information to automatically complete a Form 1040 and transmit it to the IRS to compute and send you a payment.

Economic Impact Payment Questions

What is the Economic Impact Payment (EIP)?

The EIP was created by Congress as part of the CARES Act 2020. In doing this they added Section 6428 which allows for a new $1,200 refundable tax credit ($2,400 on a joint return) plus an additional $500 for each qualified child (under age 17) for the 2020 tax year. What the EIP does is give you an advance of this new credit.

How does this affect me?

U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:

$75,000 for individuals
$112,500 for head of household filers and
$150,000 for married couples filing joint returns

Taxpayers will receive a reduced payment if their AGI is between:

$75,000 and $99,000 if their filing status was single or married filing separately
112,500 and $136,500 for head of household
$150,000 and $198,000 if their filing status was married filing jointly

The amount of the reduced payment will be based upon the taxpayers specific adjusted gross income.

Eligible retirees and recipients of Social Security, Railroad Retirement, disability or veterans’ benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits.

Retirees who receive either Social Security retirement or Railroad Retirement benefits will also receive payments automatically.

(Per IRS https://www.irs.gov/coronavirus/economic-impact-payment-information-center)

Do I have to claim the EIP as income on my 2020 taxes?

No, this is an advance of a new credit. It will not be taxable to you when you file your 2020 taxes. You will have to reconcile your advance EIP with the credit when you file next year.

So, does this mean I have to pay it back out of my refund?

Again, No. What will happen when you file your 2020 tax return you will need to reconcile the actual credit with the advance payment you received in 2020. If you are eligible for a higher credit because your AGI is lower in 2020 then 2019 (or 2018) then you will get the additional amount of the credit as a refund on your 2020 tax return.

If you receive more on the advance, then you were eligible for you DO NOT have to pay back the advance EIP.

I still don’t understand. The news said I had to pay it back.

Please make sure that you are getting your information from multiple sources or ask us when it comes to taxes.

I have seen a couple of very confusing news reports the last few days.

Here is are a couple of examples.

Bob & Sally (married) have filed their 2019 Form 1040. The AGI on the return shows $170,000.

Bob & Sally will get and EIP of $1,400 ($2,400 less 5% of 20,000 =$1,000, because they are in the phase out range, which starts at $150,000 for married filing joint)

When Bob & Sally file their 2020 taxes their Form 1040 show an AGI of $145,500.

They are now under the phase out amount and will get an additional refund of $1,000 (eligible for $2,400 and got $1,400 in advance) on their return.

Bob & Sally have file their 2019 Form 1040 and the AGI was $145,500. They will receive a $2,400 advance.

When Bob & Sally file their 2020 tax return their AGI is $170,000. Bob and Sally are now in the phase out range for 2020. On their 2020 return they will do the reconcile as followed.

Advance payment $2,400 less eligible amount $1,400 equals an over payment of $1,000. This over payment is not to be repaid the tax return.

Will my dependent get an advance payment?

Short answer, NO.

If you claim someone as a dependent for any reason, they do not qualify for this EIP. If in 2020 the person is no longer your dependent, they may qualify for the credit on the 2020 return.

Please let us know what other questions you have.

IRS Coronavirus page https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments

Treasury Coronavirus page https://home.treasury.gov/coronavirus

BE AWARE OF SCAMS!!!!!

Dear Clients,

Please be aware that scammers are out there and they will stop at nothing to get your money. Make sure to protect yourself.

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.
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 the attachment. It’s a scam. Delete it.
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. To date, no state has introduced their own version of 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.

If you think you are being scammed. Please hang up the phone or delete that email and give us a call 541-738-4313.

Oregon has extended due date too.

Last night Gov. Kate Brown extended the Oregon tax filing date to match with IRS extension to July 15, 2020. This extension for Oregon ONLY extends the filing date for Oregon returns and balance due on any 2019 tax filing.

This clearly does not extend the due date of your 1st quarter 2020 estimated tax that may be due. These are still due on April 15, 2020. Please pay these if you can. I am not aware at this time if there will be any forgiveness for not making this payment.

If you don’t think that you can file by July 15th an extension will need to be filed to extend your return to October 15th. All tax liabilities will still be due by July 15th.

Please let us know if you have any questions or concerns.
Our lobby is closed to clients but we are still here via phone and email to answer your questions. (541) 738-4313 or kelly@nwtaxaccountingllc.com

Thank you in advance to all those who are helping fight this virus. We are forever grateful for all that you do for us.

Remember to stay home, wash your hands, practice social distancing, and if you can please support your local business. Many local restaurants are still working hard doing take out orders.

It’s official. IRS is moving the filing date to July 15th what does this mean for you.

Today Secretary Mnuchin announced via twitter that IRS will be moving the April 15th filing date to July 15th due to the Covid-19 virus Notice 2020-18 (Read here n-20-18)

At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.

— Steven Mnuchin (@stevenmnuchin1) March 20, 2020

On March 18th IRS had extended the date to July 15th to pay taxes that were due on April 15th (IRS Update). But today March 20th they announced the due date has been moved to July 15th also.

Now, how does this affect you and me?

We are going to continue to work on all taxes that we currently have in our office.

If you have not brought your documents in yet please try to get them to us as soon as possible.

While the deadline to file might have changed we want to try to get your tax returns worked up to find out if you will owe or have refunds. Because if refunds are coming back we want to get those to you as soon as possible. If you will owe this will give you time to plan for any balance due. If you will owe and you don’t think that you will be able to pay by July 15th we will still need to file for an extension to be on the safe side.

Please call us 541-738-4313 or email kelly@nwtaxaccountingllc.com if you have any questions or concerns.

Thank you in advance

Please stay home, be healthy, wash your hands and practice good social distancing.

Kelly & Nancy