Tax Snacks

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The perfect portion of tax news and information.

As a reminder, Taxlete and MyTaxRights.org are not affiliated, associated, authorized, endorsed by, or in any way officially connected with any government entity. External links are provided solely for convenience and informational purposes only. Always check the official government source for the latest information and updates.

Charitable contribution deduction available to all in 2020

Under the CARES Act (enacted earlier this year in response to the COVID-19 pandemic), a taxpayer may now take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations.

New filing requirements to report nonemployee compensation

Do you own a business and pay or receive nonemployee compensation? Starting in tax year 2020, you must complete Form 1099-NEC (Nonemployee Compensation) to report any payment of $600 or more to a payee. Generally, payers must file all Forms 1099-NEC with the IRS by January 31st.

IRS extends EIP registration deadline for non-filers to Nov. 21st

On October 5th, the IRS extended the deadline for non-filers to register to receive an Economic Impact Payment (EIP) to November 21st. The deadline extension applies specifically to non-filers, that is, people who do not normally file a tax return and have not filed a 2019 tax return. The extension also covers only these individuals who have not received an EIP yet.

$500 per Child Catch-up Payment - Deadline Today!

Today is the deadline for individuals who do not typically have a tax filing requirement ("Non-Filers") to register their qualifying children in order to receive a $500 per child catch-up payment. This includes individuals who have not yet received their Economic Impact Payment (Stimulus Check). Non-Filers must use the IRS’s Non-Filers tool to register any qualifying children. Note, though, that individuals who already received an Economic Impact Payment based on their 2018 or 2019 tax return should not use the Non-Filers tool, even if they think they did not receive the full amount. These individuals may be able to claim an additional payment when they file their 2020 tax return next year.

Tax Relief for Hurricane Laura Victims

Those affected by Hurricane Laura may be eligible for certain tax deadline extensions. Affected individuals and businesses now have until December 31, 2020 to file tax returns and pay any taxes that were originally due after August 22, 2020. The relief does not apply to returns and payments that were due on July 15th.

IRS reopens registration for $500-per-child supplement payments

On August 15th, the IRS reopened the registration period for certain taxpayers who did not receive the supplemental $500-per-child amount as part of their Economic Impact Payment. Taxpayers who did not file a tax return in 2018 or 2019 may use the IRS’s Non-Filers tool (https://lnkd.in/dBNJHrB) to enter the information for their qualifying children to receive the supplemental $500 payments. These taxpayers have until September 30th to submit the required information.

IRS unveils "Dirty Dozen" list of tax scams for 2020

The Internal Revenue Service recently announced its annual "Dirty Dozen" list of tax scams with a special emphasis on aggressive and evolving schemes related to coronavirus tax relief, including Economic Impact Payments. Everyone should remain vigilant to these threats during the pandemic and in its aftermath.

IRS temporarily suspends limits on charitable contributions

Under the CARES Act, individuals may now deduct qualified charitable contributions up to 100 percent of their adjusted gross income. Corporations may deduct qualified charitable contributions up to 25 percent of its taxable income. To qualify, the contribution must be: (1) a cash contribution; (2) made to a qualifying organization; and (3) made during the calendar year 2020.

Tomorrow, July 15th, is the deadline to file and pay 2019 taxes!

Taxpayers have until tomorrow, July 15th, to file and pay their 2019 taxes. Remember, if you made under $69,000 in 2019 and have yet to file your return, strongly consider using the IRS Free File program to do so. It's easy, fast, secure, and best of all, FREE! Learn more at taxly.org/free-file.

The SBA reopened the Economic Injury Disaster Loan (EIDL) for ALL applicants.

Yesterday, June 15th, the SBA reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to ALL eligible applicants experiencing economic impacts due to COVID-19. The EIDL program offers long-term, low interest assistance for a small business or non-profit. EIDL assistance can be used to cover costs for payroll, inventory, debt, and other expenses. Additionally, the EIDL Advance provides up to $10,000 ($1,000 per employee) of emergency economic relief to businesses, and these emergency grants DO NOT have to be repaid. Apply through the following link: https://covid19relief.sba.gov/#/

Active duty servicemembers (and recent veterans): if you paid for a tax preparation service using a portion of your tax refund, your legal rights may have been violated

Zuckerman Spaeder, a highly-regarded national law firm, is investigating potential violations of the Military Lending Act involving active duty servicemembers and recent veterans. If you previously used a tax preparation service and experienced issues with receiving your 2020 stimulus check, you may have a case. Learn more on the firm's class action informational page.

Individuals may request coronavirus-related withdrawals from IRAs without 10% tax penalty

Under the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136 (CARES Act), eligible individuals may request withdrawals or loans, up to $100,000, from their qualified employer retirement plans and Individual Retirement Arrangements (IRAs) without being subject to the 10-percent additional tax penalty on early distributions that would otherwise apply.

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