The purpose of this update is to provide clarity on the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was passed by Congress and President Trump last week. The Act was intended to provide relief to those suffering from the economic fallout of the Coronavirus.
The amount of money each person will receive from the federal government will vary depending on your income, marital status and number of children.
Individuals are eligible for up to $1,200 - plus $500 per child under the age of 17
Couples are eligible for up to $2,400 - plus $500 per child under the age of 17
Payments phase out for individuals with adjusted gross incomes of more than $75,000 and for couples with incomes above $150,000.
The phaseout will reduce the payment by $5 for every additional $100 of adjusted gross income above your phase-out threshold.
Individuals making more than $99,000 will not receive anything.
Couples making more than $198,000 will not receive anything.
Income will be based on your 2019 or 2018 tax return.
The White House hopes to begin distributing cash quickly, but said that it may take a few weeks before the majority of the payments go out.
The stimulus checks will be handled by the Internal Revenue Service, and they require you to have filed your taxes electronically to have the money transferred to your bank account via direct deposit. If the IRS does not have your bank account info, it will send out a check to the physical address that was on your last tax return.
If you have filed a paper copy of your taxes or have closed the bank account used to receive previous tax refunds, the government will send a check in the mail. If you have moved since you last filed your taxes, remember to submit a change of address form with the IRS. This normally takes four to six weeks to process, and the IRS needs the correct address in order to have the check reach the correct destination.
The best way to maximize your payment from the government is to have Monotelo prepare your 2019 tax return. If you made less money in 2019 than you made in 2018, we will file the return immediately. If you made more money in 2019 than you made in 2018, we will wait to file the return. However, there is no way to know this without completing the preparation of your 2019 tax return. Once the return is complete, we will let you know what filing schedule is in your best interest.
Taxpayers are supposed to receive a note in the mail informing them of how the payment was made. This notice should arrive no more than a few weeks after the money was disbursed. If you have trouble locating your payment, there will be information regarding how to contact the IRS in the notice.
Please reach out to us if we can assist you during these challenging times.
ECONOMIC IMPACT PAYMENTS FROM THE CARES ACT
Failing to order your affairs to minimize your tax burden could cost you significant money - so don't wait to take action. If you have additional questions or need some planning help, please reach out to us.