Local Buzz covers new businesses, restaurants, closures, local politics, goings on around town and other buzzworthy items in the Conejo Valley and Greater Ventura County. Have a lead? Contact us. Click here for an archive of Local Buzz postings.
Local Buzz covers new restaurants, closures, local politics, goings on around town and other buzzworthy items in the Conejo Valley and Greater Ventura County. Have a lead? Contact us. Click here for an archive of Local Buzz postings.
Post other items directly to the Community Announcements section of the site.
The IRS announced yesterday that the tax filing deadline has been moved from April 15th to May 17th for individual tax returns. The State of California has conformed to this change.
You can still file an extension to file your returns as late as October 15th, though you are required to pay your taxes, by May 17th or risk penalties and interest. www.irs.gov
There's another round of "Economic Impact Payments" that many of you may have already received in January via direct deposit. Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible.
You'll automatically receive payments of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child.
Generally, if you have adjusted gross income (AGI) on your 2019 federal income tax return up to $75,000 for individuals, $112,500 if filing as head of household and $150,000 for married filing joint returns, you will receive the full amount.
Payments are reduced if your income is more than that, phasing out 5% of the amount your AGI exceeds the amounts shown above. They phase out completely at an AGI of $87,000 for single or married filing separately, $124,500 for head of household and $174,000 for married filing joint taxpayers.
Question: My income precludes me from getting an Economic Impact Payment based on my 2019 tax return but it dropped in 2020. Do I still get a payment?”
Answer: YES! According to the draft IRS Form 1040 Instructions published December 31, 2020, “The recovery rebate credit was paid out to eligible individuals in two rounds of advance payments called economic impact payments. The economic impact payments were based on your 2018 or 2019 tax year information. The recovery rebate credit is figured like the economic impact payments except that the credit eligibility and the credit amount are based on your 2020 tax year information. If you didn’t receive the full amount of the recovery rebate credit as economic impact payments, you may be able to claim the recovery rebate credit on your 2020 Form 1040 or 1040-SR.”
So in other words:
The first two payments in 2020 and 2021 were called Economic Impact Payments
They were based on your 2019 or 2018 tax information.
If you did not receive them or did not receive the full amount, you can recalculate the payments on your 2020 tax return based on your 2020 adjusted gross income.
The refundable credit for this stimulus on your tax return is called “Recovery Rebate Credit.”
If you are indeed eligible for a payment based on your 2020 AGI and did not previously receive a full payment, you will receive a refundable credit on your tax return that you can either apply to any taxes due or, if no taxes are due, receive a refund.
Tax credits can help offset the cost of higher education
Whether it’s online, in-person, part-time or full-time, higher education can be expensive. The good news is there are tax credits that can help offset these costs. These credits reduce the amount of tax someone owes. If the credit reduces tax to less than zero, the taxpayer could even receive a refund.
Taxpayers who pay for higher education in 2020 can see these tax savings when they file their tax return next year. If taxpayers, their spouses or their dependents take post-high school coursework, they may be eligible for a tax benefit.
There are two credits available to help taxpayers save money on schooling, the American opportunity tax credit and the lifetime learning credit. Taxpayers use Form 8863, Education Credits, to claim the credits.
To be eligible to claim either of these credits, a taxpayer or a dependent must have received a Form 1098-T from an eligible educational institution. There are exceptions for some students.
Here are some key things taxpayers should know about each of these credits.
The American opportunity tax credit is:
Worth a maximum benefit of up to $2,500 per eligible student.: 100% of the first $2,000 in qualified expenses; 25% of the next $2,000 of qualified expenses.
Only for the first four years at an eligible college or vocational school.
For students pursuing a degree or other recognized education credential.
40% of the credit is refundable for most taxpayers.
The catch: The credit is phased out at modified adjusted gross income of $160K to $180K (married filing jointly) or $80K to $90K (filing single). You can’t claim the credit if you are claimed as a dependent on another person’s tax return.
The lifetime learning credit is:
Worth a maximum benefit of up to $2,000 (20% of the first $10K of qualified expenses) per tax return, per year, no matter how many students qualify.
Available for all years of postsecondary education and for courses to acquire or improve job skills.
Available for an unlimited number of tax years.
The credit is non-refundable, meaning, if you only receive the credit to the extent you owe taxes.
The catch: The credit is phased out at modified adjusted gross income of $116K to $136K (married filing jointly) and $58K to $68K (filing single). You can’t claim the credit if you are claimed as a dependent on another person’s tax return.
More information about these and other federal tax credits at www.irs.gov/credits-deductions-for-individuals.
13.9 million Americans to receive IRS tax refund interest; Taxable payments to average $18
This week the Treasury Department and the Internal Revenue Service will send interest payments to about 13.9 million individual taxpayers who timely filed their 2019 federal income tax returns and are receiving refunds.
The interest payments, averaging about $18, will be made to individual taxpayers who filed a 2019 return by this year’s July 15 deadline and either received a refund in the past three months or will receive a refund. Most interest payments will be issued separately from tax refunds.
In most cases, taxpayers who received their refund by direct deposit will have their interest payment direct deposited in the same account. About 12 million of these payments will be direct deposited.
Everyone else will receive a check. A notation on the check − saying “INT Amount” − will identify it as a refund interest payment and indicate the interest amount.
By law, these interest payments are taxable and taxpayers who receive them must report the interest on the 2020 federal income tax return they file next year. In January 2021, the IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10.
This provision is different from the long-standing 45-day rule, generally requiring the IRS to add interest to refunds on timely-filed refund claims issued more than 45 days after the return due date.
Instead, this year’s COVID-19-related July 15 due date is considered a disaster-related postponement of the filing deadline. Where a disaster-related postponement exists, the IRS is required, by law, to pay interest, calculated from the original April 15 filing deadline, as long as an individual files a 2019 federal income tax return by the postponed deadline − July 15, 2020, in this instance. This refund interest requirement only applies to individual income tax filers − businesses are not eligible.
Interest is paid at the legally prescribed rate that is adjusted quarterly. The rate for the second quarter ending June 30 was 5%, compounded daily. Effective July 1, the rate for the third quarter dropped to 3%, compounded daily.
Where the calculation period spans quarters, a blended rate applies, consisting of the number of days falling in each calendar quarter. No interest will be added to any refund issued before the original April 15 deadline.
For more information, visit IRS.gov.
Economic impact payments:
What you need to know
Check IRS.gov for the latest information: No action needed by most people at this time
The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.
Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.
How will the IRS know where to send my payment?
The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.
For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.
The IRS does not have my direct deposit information. What can I do?
In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.
I am not typically required to file a tax return. Can I still receive my payment?
Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.
How can I file the tax return needed to receive my economic impact payment?
IRS.gov/coronavirus will soon provide information instructing people in these groups on how to file a 2019 tax return with simple, but necessary, information including their filing status, number of dependents and direct deposit bank account information.
I have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?
Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.
I need to file a tax return. How long are the economic impact payments available?
For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.
Where can I get more information?
The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.
The IRS has a reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.
Yesterday, March 20th, via a “Tweet,” Treasury Secretary Steven Mnuchin announced that the April 15 IRS tax deadline will be moved to July 15. So now, both the federal and state returns are automatically pushed to July 15 for both filing and payments.
Here is a press release issued today, March 21st, from the IRS:
The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.
Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment 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.
Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.
The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.
The IRS will continue to monitor issues related to the COVID-19 virus, and updated information will be posted on a special coronavirus page on IRS.gov.
This announcement comes following the President's emergency declaration last week pursuant to the Stafford Act. The Stafford Act is a federal law designed to bring an orderly and systematic means of federal natural disaster and emergency assistance for state and local governments in carrying out their responsibilities to aid citizens. It was enacted in 1988.
Treasury and IRS will issue additional guidance as needed and continue working with Congress, on a bipartisan basis, on legislation to provide further relief to the American people.
The Franchise Tax Board (FTB) today announced special tax relief for California taxpayers affected by the COVID-19 pandemic. Affected taxpayers are granted an extension to file 2019 California tax returns and make certain payments until June 15, 2020, in line with Governor Newsom’s March 12 Executive Order.
“During this public health emergency, every Californian should be free to focus on their health and wellbeing,” said State Controller Betty T. Yee, who serves as chair of FTB. “Having extra time to file their taxes helps allows people to do this, as the experts work to control the spread of coronavirus.”
This relief includes moving the various tax filing and payment deadlines that occur on March 15, 2020, through June 15, 2020, to June 15, 2020. This includes:
• Partnerships and LLCs who are taxed as partnerships whose tax returns are due on March 15 now have a 90-day extension to file and pay by June 15.
• Individual filers whose tax returns are due on April 15 now have a 60-day extension to file and pay by June 15.
Quarterly estimated tax payments due on April 15 now have a 60-day extension to pay by June 15.
The FTB’s June 15 extended due date may be pushed back even further if the Internal Revenue Service grants a longer relief period.
Taxpayers claiming the special COVID-19 relief should write the name of the state of emergency (for example, COVID-19) in black ink at the top of the tax return to alert FTB of the special extension period. If taxpayers are e-filing, they should follow the software instructions to enter disaster information.
The FTB will also waive interest and any late filing or late payment penalties that would otherwise apply.
For tax return procrastinators out there. Did you know...that the IRS has automatically extended the deadline for 2018 tax returns and payments that would normally be due by April 15, to April 30 this year, as a result of the November 2018 Wildfires. This applies to anyone residing within Ventura, Los Angeles and Butte counties, regardless of if you were directly impacted by the fires.
More information on the IRS website at www.irs.gov/newsroom/tax-relief-for-victims-of-november-8-wildfires-in-california.
The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief based on zip codes provided by FEMA. FEMA proclaimed a major disaster as a result of the Camp, Hill and Woolsey fires on November 12, 2018 in DR-4407. See www.fema.gov/disaster/4407 for more information.
The California Franchise Tax Board followed suit . They indicate at www.ftb.ca.gov/individuals/disaster.shtml how to notate your tax return to reflect the fire impacted you.
Conejo Valley Guide covers events, activities and things to do throughout Ventura County and surrounding areas.
Conejo Valley Guide® covers thousands of events, activities and things to do throughout Ventura County, California and surrounding areas.
Conejo Valley Guide is a participant in the following affiliate programs: Amazon Associates, Groupon Affiliates and from time to time other affiliate programs. These affiliate advertising programs are designed to provide a means for sites to earn advertising fees by advertising and linking to the respective eCommerce sites. Some links on the site may be affiliate links. We get paid if you buy something or take an action after clicking one of these links on our site. Learn more at paidforadvertising.com.
