Despite what you might think, being a tax accountant is NEVER boring.
We have all kinds of fun amusements that keep us going.
We play little games like: “Guess The New Tax Law That Will Change Returns That Have Already Been Filed” — catchy title, I know, and we get to play it all the time.
For instance, this new Senate version of the third stimulus package, the “American Rescue Plan,” includes provisions that will impact people who have already filed their taxes.
NOW the first 10,200 of unemployment insurance is NOT taxable (until this past weekend, all of it was considered taxable income).
So here’s a live look at the programmers at TurboTax …
The same is happening at the IRS Legislative affairs office.
I pity these poor souls. They are having to make retroactive changes based on legislation that is still being passed. And with many, MANY Chattanooga taxpayers having already filed their taxes … ouch.
Frankly, I pity anyone who is relying upon software to prepare their taxes given this third stimulus package, and who doesn’t have someone to guide them through this mess. (ahem.)
Even within the Chattanooga tax professional community, many of our colleagues are pulling their hair out about all of this. I don’t blame them … but I’ve also gotten used to this cycle (especially this year).
So, If you know anyone in Hamilton County who needs some assistance understanding this third stimulus package, this is truly what we live for around here.
Have them use this to get in touch:
Now … mind you, nothing is final until the bill is passed.
The Senate version has to go through reconciliation with the House bill.
This Senate bill dropped some controversial provisions in the House version, like the federal minimum wage hike, some funding for bridges and railways in NY and San Fran, changes to some of the income threshold for the stimulus payments, etc. Also, it looks like there will be tax free student loan forgiveness included as well.
Again, I’ll be back to break it down once we have actual legislation. Including information about the third stimulus package of 1400 PER PERSON in your household (includes all dependents).
One piece of advice: if your income significantly increased in 2020 versus 2019 (i.e. if it took you OVER the threshold for stimulus), you should WAIT to file your 2020 taxes.
Here are the income limits in the Senate bill (again, these are not yet final):
- Single filers with AGIs of 75 K or less
- Head-of-household filers with AGIs of 112,500 or less
- Married joint filers with AGIs of 150 K or less
The phaseouts happen fast. If your income gets above 160, then you’ll be out of luck.
So again, if your 2020 income takes you over these limits — but you were under them in 2019 — do NOT file your taxes yet.
And if you want to talk about this, we will make time for you:
It’s already been a wild year. Thoughts and prayers for IRS staff, software users (and programmers), and those who don’t have someone in their corner.
But you do. We’re on top of this stuff, so you don’t have to be … and we’ll be in touch again once we have more details to share.
John and Wanda King