Frequently Asked Questions

A. 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. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return. 

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 and up to $500 for each qualifying child.

 A.  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. To schedule an appointment with us please call us at 808 946 7297  or email us here. 

  A. 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.  If you filed your 2019 or 2018 tax return but did not receive your refund by direct deposit, your Payment will be mailed to the address we have on file even if you. This is generally the address on your most recent tax return or as updated through the United States Postal Service (USPS). To update your address with USPS click here. 

 A.   Yes. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.

Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.

 READ ABOUT  THE ECONOMIC IMPACT PAYMENT ON THE IRS WEBSITE 

A. Eligible applicants for an EIDL can receive a $10,000 emergency grant within three days of application (through Dec. 31, 2020) There is no obligation to repay the grant. To receive the $10,000 emergency grant, it is not necessary to have an approved EIDL loan. However, if you are able to secure a PPP loan, the $10,000 grant will be subtracted from the forgiveness amount

A.  In our experience there are four types of taxpayers

1. The Owing Taxpayer – This taxpayer wants to owe at least $1,000 on their tax return because they can’t stand the thought of the federal government keeping one extra dollar of theirs during the year.
2. The Break-even Taxpayer – This taxpayer would love if their refund and amount owed were both $0. The financial experts recommend you strive for this. However, tax laws and deductions are always changing and it’s easy to find yourself either owing $500 or getting a refund of $500. This taxpayer is comfortable with either outcome.
3. The Buffer Taxpayer – This taxpayer says they “want to break even” but what they really mean is they want their bank account to at least break even, which means they really just don’t want to have to pay. They’re aware that their refund could be $0, or it could be $2,000. As long as the outcome is- they don’t have to write a check, they’re happy.
4. The Big Refund Taxpayer – This taxpayer uses their tax refund as a quasi-savings account. They know they pay too much federal income tax withholding from their paychecks, but they use that large refund amount to take trips, buy necessary household appliances, vehicles, etc.

Which of these taxpayers is right? The answer is any of them. They each make decisions for themselves and accept the outcome. Which taxpayer are you? Is that where you want to be or if you could choose would you be in a different group? You can choose, and our tax professionals can help you!

A.  Filing statuses are actually quite rigid, there is not nearly as much flexibility in which status to choose as many people would have you believe. If you are married by Dec 31st of the previous year, then you only have two options. Married Filing Joint or Married Filing Separate. I cannot begin to tell you the amount of times friends, families, attorneys or even divorce decrees give incorrect information in regard to filing statuses. If you are married, you absolutely cannot file two separate returns as Head of Household and Single respectively. You may file Married Filing Separate, but that comes with some potential downsides. Before making a decision on how to file, you should consult with a competent tax professional. 

 A.  This one depends on many factors, but generally the answer is $0. The maintenance, repairs, renovations and improvements on your primary residence are almost never deductible. That doesn’t mean they won’t help you in the long run, but you cannot write them off as an itemized deduction on your tax return. Instead, the amounts are used to increase your basis in your home. Basis is a running calculation to determine what you’ve paid for your home. In some cases, how much you’ve paid for your home, both the original purchase price and the improvements you’ve made to the home since you bought it, can be used to reduce capital gains tax on the sale of the home. Basis also matters for many other cases, such as the 2017 Hurricane Harvey Safe Harbor calculations.