Monday, April 6, 2020

Remote Tax Preparation in the Age of CoronaVirus

These instructions are provided to assist my current and referred clients (or brand new clients) with preparing taxes remotely using H&R Block's secure Digital Drop Off system.


While you can obviously just email all your documents (see below for list) to my email address at kirk.taylor@tax.hrblock.com, that is not the most secure system.


The best way to do this is to email me at kirk.taylor@tax.hrblock.com and give me your name, phone number and email address. With that, I will have the system send you a link for setting up a MyBlock account which will allow you to upload documents directly to me (see below for list). If you prefer, once you have a MyBlock account you can download the MyBlock phone app and take pictures with your phone directly into your account. If you already have a MyBlock account, I will text you an invite to upload documents to me.


Once you have uploaded documents, the system SHOULD inform me, but send me an email anyway when you are done.


Once I have the documents, I will prepare the tax return and send emails to confirm information, or ask for additional documents. Once I have a good result, I will send them to you with any discussion or additional information, to make sure you are okay with the result and fees. If you aren't satisfied at this point, there is no obligation to pay and you are free to let me know that you will not be filing with me. I will also either ask for your direct deposit information if not already provided, or confirm the last 4 digits of the account number to make sure it hasn't changed.


After you confirm you are ready to go, I will send you an email with a brief discussion of the approval process, and my system will send you a link to remotely pay for and approve the tax return. Again, the system SHOULD inform me when you are done, but send me an email anyway.


At no point in this process should you go more than 48 hours without getting a response from me if you have sent information, unless I have informed you I won't be available. So if you don't get a response - ping me again.


Here is a fairly comprehensive list of documents to include:
Write up a quick document that summarizes your 2019 life/tax situation - include the name, SSN, birthday and relationship of everyone in the household. You can also include information here that you might have receipts for, but that are too cumbersome to scan, such as charitable donations, car taxes, gas receipts, business/rental expenses, college book costs, list of Goodwill type items donated etc.
Send a picture of your driver's license (and spouses). If you want fees pulled from the refund, I also need a picture of you holding the license near your face so we can verify identity.
A digital copy of your 2018 tax return is helpful. If prepared by H&R Block or our software I should be able to access it.
W-2's for jobs
1099's for investments
1098's for mortgages
1098E's for student loans
1098T for college
Daycare statements
1099MISC for business or rental income
1099SA if you have Health Savings Accounts and spent money from them.
1099R's for pensions or retirement withdrawals.
SSA1099 for Social Security
Car taxes paid
Sales tax paid on cars or boats purchased during the year, if you don't pay state income taxes
For businesses include a summary list of categorized expenses, or a list of all expenses paid.
For rentals, provide rental income and expenses, and I will ask for further information as I need it.







Saturday, April 4, 2020

The BIG Coronavirus Link Post

Just a bunch of tax and non-tax information for those interested. Check back for additional information as I add it:

SuperTaxGenius Master Index (with a Section on the Virus)

Taxes and Stimulus Payments:

IRS.gov Coronavirus Page
IRS.gov Stimulus (Economic Impact Payment) Page
H&R Block's Stimulus Calculator
Treasury Page for Social security recipients about Stimulus Checks
Forbes FAQ on Stimulus Checks
Forbes on Stimulus Scams

Business and Economic Information:

Treasury's Comprehensive Page on Coronavirus Programs
Small Business Administrations Coronavirus Page with Loan Resources
South Carolina SBA and Home Mortgage Broker I Trust

Education and General Information:

Full Text of CARES Act (the big stimulus bill)
Veteran's Administration Coronavirus FAQ's
Centers for Disease Control Coronavirus Page
Trillium Ayurveda Spring Emergency Kits
How Stuff Works Coronavirus Education
WebMD Coronavirus Page

The NERD Section (Thanks to Anthony Crego for much of this):

COVID-19 Projections Website
The Hammer and the Dance
Taiwan and COVID-19 Response
Five Thirty Eight Weighs in on Testing

Politics:

The Hill thinks making people who don't normally have to file a tax return file one to get a stimulus check is a bad idea. I'm waiting to see what the "simple" return process is: The Hill's Blog Post about Needless tax Filing to get Checks

AOC thinks young people should file independently to get their stimulus check. I think this is a BAD idea without first checking with a tax professional and their parents. You can't just DECIDE you are independent and the cost may be worse than the benefit. But she's right that there is a donut hole here: https://dnyuz.com/2020/04/04/aoc-offers-advice-for-young-people-to-get-around-stimulus-check-exclusion/

The New York Times loves deficit spending: https://www.nytimes.com/2020/03/27/upshot/stimulus-national-debt-coronavirus.html, Reason hates it, of course: https://reason.com/2020/03/06/no-stimulus-spending-wouldnt-be-an-economic-vaccine-against-the-coronavirus/

In the, "Things Everybody Already Knew" category, China lied about the extent of the virus and hundreds of thousands of people are going to die that didn't need to because of it. See also: No one will hold them accountable: https://www.bloomberg.com/news/articles/2020-04-01/china-concealed-extent-of-virus-outbreak-u-s-intelligence-says?fbclid=IwAR3wEQ2NA1xZJG521ar1liYR4TtUQ_OTaNqzY00Si17l2Gs-NnsxClApsmI

More on China: https://news.sky.com/story/coronavirus-anger-is-growing-at-china-over-covid-19-and-its-apparent-cover-up-attempt-11966539

Ronald Bailey is a regular with fighting panic: https://reason.com/2020/04/03/what-percentage-of-covid-19-patients-are-likely-to-die/

Thursday, April 2, 2020

Master Index of Posts



I've compiled a Master List of my posts for easy reference. Not every post is included, and I have changed the order to put the most important or timely ones on top, and to group some based on categories (Military, Obamacare, Tax Software). I will try to keep this updated and just below the latest post. Please let me know in the comments if I screw up a link :) Some of the posts are OLD so be careful assuming the information is current.

If you have a Kindle, you can get a copy of my entertaining and useful book, The Short, Cheap Tax Book for Everyone for only 99 cents!

For the new tax law, there's The Short Cheap Tax Book for the Trump/GOP Tax Law

If you like the blog, buy my other books: Kirk Taylor, EA Author Page

COVID-19 Pandemic Posts:

BIG Coronavirus Post
Remote Tax preparation in the Age of Coronavirus
Lots of Links!
Coronavirus Stimulus Checks Details
TWENTY Weeks for Mailed Stimulus Checks
Coronavirus COVID-19 and Getting Your Taxes Done

Important or Time Sensitive Posts

Did You Pay an Obamacare Penalty in th Past? There's Hope
Single and 0 No Longer Exist - The New W-4
Late 2019 Changes affecting 2018 Returns
Late 2019 Changes affecting Disaster Areas
The Rest of the Late 2019 Tax Changes (some big ones here)
October Tax Checkup
The $10,000 Question for Students and Parents
My Advice on IRA's
2018 Social Security Warning!
Wants and Needs and Kids
Emergency Fund Advice
Solar Credits and Solar Sales
The Dreaded CP2000 Letter from the IRS
The IRS did NOT Call You!
I Got an E-mail from the IRS!
I Want to Lower my Taxes!
10 Simple Pieces of Tax Advice
10 Things Everybody Should Do
Check Your Withholding

Trump/GOP Tax Law

Post 2018 Tax Season Thoughts on the New Law
Quick Thoughts on the New Tax Law (Post 2017 Tax Season Edition)
2018 Tax Bill Changes
What the New Tax Law Didn't Change (2018)

South Carolina

SC Gas Tax Credit Advice
SC Military Retirement Change (2016)
Obamacare in SC - Something's Fishy

Military

Military Spouses Residency Relief Act 2018 Change
Military Spouses Residency Relief Act Details and Matrix
Retiring from the Military? Tax Warnings!
Reenlistment Bonus, Social Security, Compensation Repayment and Taxes
2019 Military State by State Tax Guide
2018 Military State Tax Guide
2017 Military State Tax Guide
2016 Military State Tax Guide
2017 Boomer Deduction Worksheet
2016 Boomer Deduction Worksheet
2015 Military State Tax Guide
2015 Boomer Deduction Worksheet

Tax Software

TurboTax Admits That Easy Is Better Than Accurate
Tax Preparation Software Sucks - An Open Letter to H&R Block

Business Guides

Sole Proprietorships are Bad
Avon, Pampered Chef, Party Lites, Amway, etc. MLM Tax Guide
UBER Driver Tax Guide
Tax Guide for Contractors - or - 1099MISC WTF?
Real Estate Agent Tax Guide
Rental Property Guide for Homeowners
Rental Property Sale Worksheet

General Posts

Getting Married? One Piece of Important Tax Advice.
The Dreaded CP2000 Letter from the IRS
Investing and Taxes - A Primer
How Much does it Cost to File Taxes?
Reenlistment Bonus, Social Security, Compensation Repayment and Taxes
Open a Roth IRA Today! And Not For the Reason You Think
Foreign Earned Income Exclusion Warnings - Update
Charity Made Simple
How Fast Can I Get my Refund?
Make Estimated Tax Payments the Easy Way
Depreciation Recapture - an inaccurate description
Don't Touch that 401K or IRA!!
What do you do with that Big Tax Refund?
It's Okay to Get a Big Refund - Really...
Common Tax Return Errors - Updated
Common Tax Return Errors
Mortgage Tax Credit Information
Lesson from the Government Shutdown - Emergency Fund
Don't Pay Capital Gains Taxes if You Don't Have To!
I got a 1099C - Now What?
Cancelled Debt and Insolvency
The IRS, email and privacy...
IRS Checking Facebook?
>$250 Donation Acknowledgement
Drop Box Donations - US Marines
Tax Scams
Taxes and Divorce
Random Thought about Books
Taking Care of the Client
Warning - Tax Resolution Scams
Foreign Earned Income Exclusion - WARNINGS!
IRS.GOV Website Update

Affordable Care Act (Obamacare) Posts

The Affordable Care Act (Obamacare) and People with Health Insurance
Affordable Care Act (Obamacare) for the 2014 Tax Filing Season
Obamacare, Affordable Care Act and Married Filing Separately - Warning
Affordable Care Act, Obamacare update and advice
Healthcare Law, Obamacare, Affordable Care Act Info
Weird Obamacare Strategies and Incentives - 1
Weird Obamacare Incentives and Strategies - 2
Weird Obamacare Incentives and Strategies - 3
Weird Obamacare Incentives and Strategies - 4
Weird Obamacare Strategies and Incentives - 5
Weird Obamacare Strategies and Incentives - 6

Coronavirus Stimulus Checks

This is the post everyone wants to read.
How much am I getting and what do I need to do.

For most people, the answer is $1200 per taxpayer and spouse (each) and $500 for each dependent under age 17 and you don't need to do anything. Specifically, if you filed a 2019 tax return, made less than $75,000 filing Single or Married Filing Separately, $112,500 Head of Household, $150,000 Married Filing Jointly, and had direct deposit to an account that is still active, you will be getting a deposit in short order and don't need to do anything. If the last tax return you filed was 2018, and the above limits were met, you also will get the payment and don't need to do anything.

Who won't get a check:
People 17 or older who are claimed as a dependent.
Single or Married Filing Separately taxpayers who made more than $99,000 and no children under 17.
Head of Household taxpayers who made more than $136,500 and had no children under 17.
Married Filing Joint taxpayers who made over $198,000 and had no children under 17.

If you don't meet the criteria of the previous two paragraphs, use the calculator from H&R Block to see what you get: https://www.hrblock.com/coronavirus-tax-impact/calculator/

Who needs to do something:
People who did not provide direct deposit or direct debit information on their latest tax return. The IRS says it will provide a portal for updating direct deposit information to get your check faster, otherwise it can take up to TWENTY weeks to get your check. The IRS will prioritize lower incomes for check mailing. I will update with the portal when they provide it.
People who did not file a 2018 or 2019 tax return. File a return as soon as possible to get your tax return unless you receive Social Security and have it direct deposited. In theory, the IRS will use this information to get you your money, but you might want to file a "simple" return using the process the IRS is implementing in the next couple of weeks. Details will be posted here when they provide it.
People who filed a 2018 tax return and made too much money to qualify, or who have kids born in 2019. File a 2019 tax return to make sure you get the full amount of the check.
People who have closed or changed the bank account to which their last tax return was directed: The IRS says it will provide a portal for updating direct deposit information. I will provide details when the IRS provides it.
People without a bank account who have moved: Update your address with the IRS using Form 8822 ASAP!

What if you aren't required to file and don't receive Social Security: The IRS is going to provide a way to file a "simple" return using a process they are implementing in the next couple of weeks. Details will be posted here when they provide it. Alternatively, you might qualify to file a tax return if you have a W-2. In this case, get on it and file. I believe H&R Block is planning on filing these for free, even using an office (via drop-off or online approval in most cases). If you have only non-taxable income such as VA disability, you need to wait for the IRS "simple" system to be implemented.

What to do if you owe for 2019 and haven't filed: File your tax return ASAP and provide direct debit information for the IRS to take the money from your account on 7/15/2020. This will ensure your stimulus payment is dropped to that account and will be available to cover your balance due (or to spend).

What happens if I don't file a 2018 or 2019 tax return, or made too much money on the latest filed tax return to qualify? The payment is truly based on your 2020 tax return, so if you qualify for a payment but didn't get it (or qualify for a larger one) it will be provided on your 2020 tax return.

Is the payment taxable? Do I have to pay it back? What if I make more money in 2020 such that I shouldn't have qualified? The payment IS an advance on your 2020 tax return but the amount is from a brand NEW credit that increases your 2020 tax return. It is not taxable, it does not have to be paid back. I'm not 100% certain, but, every other time they did this, if you qualify for a bigger payment on your 2020 tax return, you get the extra. If you deserve less, they let it go.

The IRS will send you a letter detailing the amount you should have received and how it was calculated.

Weird tricks:
A child over 17 on your tax return gets you $500. Filing independently they could get $1200.
Filing separately if one person has a big income and the other doesn't could get you a stimulus check when otherwise not entitled due to income, but will probably f**k up your tax return.
If your 2018 tax return met the above requirements and your 2019 doesn't, and you haven't filed 2019 yet, you should wait to file until after you get your stimulus payment.

Scams: No one is going to call or email you requesting you provide direct deposit information, personal information or have you pay money upfront to get the payment. The scams haven't started...but they will.

Coronavirus Tax Post - Stimulus Checks and MORE

I'm going to try to consolidate all the Coronavirus stuff that I think is important into one tax post...
A lot of this is very early interpretations of the laws and guidance, and is subject to changing at any time.

First: The IRS is currently not manning their live phone lines. So don't try to call.

Second: You don't have to take your 2020 Required Minimum Distribution from your Retirement Account. This applies to people over the age of 70 and a half who have to take annual withdrawals from their tax advantaged accounts and pay taxes on them. This is an under-reported and under-appreciated big deal. I highly recommend taking advantage of this if you don't need the money from your account. Pulling money out during a dramatic stock market downturn is painful.

Third: You don't have to pay your balance due for 2019 until 7/15/2020. Most states are following suit. You also don't have to make your first Estimated tax payment for 2020 until 7/15/2020, though, ironically, the 6/15/2020 payment is still due on time. If you scheduled a direct debit for 4/15/2020, you can cancel the payment by calling the IRS. Here is what they say about it: "Call IRS e-file Payment Services 24/7 at 1-888-353-4537 to inquire about or cancel your payment, but please wait 7 to 10 days after your return was accepted before calling. Cancellation requests must be received no later than 11:59 p.m. ET two business days prior to the scheduled payment date."

Fourth: If you suffered economic impact from the Coronavirus, specifically, you or a family member you care for contracted the disease, or you lost your job or lost business or were laid off, or lost business income due to the virus, you can withdraw up to $100,000 from your retirement accounts without penalty and with the ability to pay the taxes due over three years, or put the money back and pay no taxes. The connection and calculations between the economic impact and the withdrawal amounts are not clearly defined. There are also changes to loan requirements and costs associated with making a hardship withdrawal. I DO NOT recommend doing this unless ABSOLUTELY necessary and only withdraw the minimum amount possible to keep your family alive. In fact, there are so many programs available to defer rent, mortgages and student loan payments that this should not be necessary.

Fifth: Things I don't know jack about: There is greatly expanded ability to get unemployment benefits if you have reduced income vice full job loss, and for self-employed people. There are amazing small business loan opportunities, some of which don't require paying back (go to sba.gov). There are programs that limit the ability to evict people based on non-payment of rent, guaranteed deferment of mortgage payments for government backed loans, and deferment of student loan payments.

Sixth: There are a bunch of useful resources out there. I will have another post with these linked. See the Master Index Coronavirus section to find it.

Seventh: You might have heard that stimulus checks are coming. I'm writing a BIG post on that. See the Master Index Coronavirus section to find it.

Eighth: The IRS has suspended pulling back taxes, delinquent student loans and other debts from tax refunds and stimulus payments. Delinquent Child Support withdrawals are still happening on a state by state basis.

TWENTY Weeks for Mailed Stimulus Checks!


Mailing of stimulus checks could take up to TWENTY weeks (per CNBC) if the IRS does not have your direct deposit information (from a 2019 or 2018 tax return). If you did not provide direct deposit info on your 2019 return, I don't think they will go back to 2018 to get it.

File your 2019 tax return now, even if you owe. Set up direct debit from your checking account to be taken on 7/15/2020.

This is the easiest way to ensure you get a quick direct deposit of your stimulus check.

If unable to do that, the IRS says they will setup a system to update direct deposit information, but I bet this will require setting up an account with the IRS which can sometimes be difficult to do due to ID verification requirements.

Here's the info from IRS:

"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."

Sunday, March 15, 2020

Coronavius COVID-19 and Getting Your Taxes Done

So how do you get your taxes done if you are self-quarantined?
Is it safe to go to an office for tax preparation?

I don't really know the answer to the second question, but the first one is easy.

First, don't panic. If you are getting a refund, the IRS doesn't care if you are late. If you owe money, there's a good chance that relief from penalties will be in the offing.

But if you really need them done...you have options.

At home software (which I hate) is obviously unaffected by quarantining. If your taxes are simple, you have a good understanding of taxes, and you are willing to download appropriate manuals and instructions, then you can probably do a passable job. I do mean DOWNLOAD THE TAX FORM INSTRUCTIONS! Complete reliance on software is a TERRIBLE idea.

But what if you need a professional?
First thing, give yours a call and see what they can do. Many professionals have remote systems established for online exchange of forms and approvals. Those that don't can probably set something up. At the very least they can keep you updated on what the rules are and advise about extensions.

H&R Block has a completely established remote preparation system, though most of their tax professionals will have never used it. Give yours an email and ask if it is available for you.

Last resort...I do hundreds of remote tax returns.
Email me at kirk.taylor@tax.hrblock.com for advice and instructions on remote tax preparation. I'm pretty busy, but I'm making time to help affected people. Most remote tax preparation can be done in 48 hours. Less if you are responding to my emails quickly. That said, there's no way of knowing how the virus is going to shift demand, but I'll always keep you informed.

And DON'T PANIC!
Everything is going to be fine.