We need to be more careful than ever! Scammers and con-artists are at an all-time high due to the worldwide shutdowns. AFS Taxsavers have your back to protect you against IRS scammers by keeping you informed. Call us for any updates or more information @ (734) 464-3660 📞
If you did not have to file a tax return in the last two years visit the site below to make sure you get your stimulus check.
Starting Monday April 13th
- Applications will be in place for the Self-employed, 1099-Contractors, and Gig workers
- These workers will start to receive the State and Federal benefits as early as April 20th
- Self-employed workers, gig workers, 1099-independent contractors and low-wage workers who have previously applied for unemployment benefits and have been denied should login to their MiWAM account to complete the next steps for PUA federal benefits. These steps will also be emailed to workers. They should not file a new claim, as that may delay the time it takes to get their benefits
- The UIA says that every eligible worker will receive their benefits.
- The UIA will be accepting claims and benefit applications back-dated to reflect the date on which the claimant was laid-off due to COVID-19, beyond the previously established 28-day period ($600 federal payment is only retroactive back to March 28).
- Eligible self-employed workers, gig workers, 1099-independent contractors, and low-wage workers will begin receiving their state benefit amount (paid with federal funds) and the $600 federal payment as early as April 20.
Under the legislation, single Americans would receive a onetime payment of $1,200, married couples would get $2,400, and parents would see $500 for each child under age 17.
However, the payments would start to phase out for single individuals with adjusted gross incomes of more than $75,000, and those making more than $99,000 would not qualify at all. The thresholds are doubled for married couples. Gross income will be based on your 2019 tax return. If your 2019 return has not yet been filed, your 2018 tax information will be used.
According to the CARES Act proposal on Monday, payments phase out at a rate of $5 per every additional $100 in income starting at $75,000 in adjusted gross income for singles, $112,500 for heads of household, and $150,000 for married couples filing jointly. For example, a single adult who earns $85,000 would get $700 (a decrease of $500 due to their higher income).
Some will receive nothing. A single, childless adult who earns more than $99,000 would get no money, and childless couples with $198,000 would also be phased out entirely.
Checks will be issued two ways. Direct deposit will be used if the IRS has your banking information in their system. Otherwise, individuals will receive a paper check in the mail. As of today, checks are estimated to arrive in mid-April.
New overtime option? Under a new bill proposed in the House, employers can offer to reward employees with extra time off in lieu of receiving pay at the usual time-and-a-half overtime rate. The choice would be voluntary. Any unused compensatory time at the end of a year would be converted to overtime pay.
Small Business Tax Strategies Vol. 12 No. 7 July 2017
Fantasy sports is sweeping the nation. It can range from casual leagues just for fun to
heavy betting for high stakes.
Strategy: Learn the tax consequences. If you don’t, you could land in hot water with the IRS.
Although the tax law is still evolving, fantasy sports is generally treated as a form of gambling where payoffs are concerned.
Here’s the whole story: To play fantasy sports, you might sign up with an online forum like FanDuel or DraftKings offering winnings based on daily, weekly or season-long performance; or enter into a league of friends or family hosted by websites such as Yahoo and ESPN. Virtually all athletic pursuits are represented.
If you play fantasy sports for money and win, however, the IRS is going to want to get its share. Fantasy sports websites are legally obligated to report annual winnings of $600 or more on Form 1099-MISC. You get a copy of the form, and so does the IRS. So the IRS knows how much you won. If you’re paid through a third-party source (e.g., PayPal), you’ll likely receive a 1009-K instead.
Don’t think that this is being shoved under the rug. IRS computers may flag discrepancies if you don’t report 1099 income on your return. Typically, a fantasy sports entity will calculate your “net profit” as being equal to the amount of your winnings minus entry fee plus any bonuses. For instance, if you hit the jackpot this year with a $25,000 payout and a $5,000 bonus and it cost you a $1,000 entry fee, your net profit is $29,000.
This income should be reported on your 1040 along with other random income like jury duty pay and trustee fees. At least there’s a silver tax lining: Income from gambling activities can be offset by gambling losses, but only up to the amount of your winnings. Thus, if you have losses elsewhere, you might break even taxwise.
In this brief analysis, we’ve presented a general tax outline for casual players. If you’re in the “business” of playing fantasy sports, you’re treated like a professional gambler who can deduct losses on Schedule C. To support your position, you may have to prove that the activity isn’t a hobby, based on nine factors listed in IRS regulations. Notably, you must show that you legitimately intended to turn a profit and generally acted in a business-like manner.
Tip: State laws will govern income taxation on the state level.
Small Business Tax Strategies Vol. 12 No. 7 July 2017
My accountant says my state income tax refund from last year is taxable. Is this possible? H.C., Middlesex, N.J.
Yes. If you claimed state income taxes as an itemized deduction on Schedule A of your 2015 Form 1040, any refund you received in 2016 from the state counts as taxable income on your 2016 return. In essence, you can’t have things both ways if you deducted the full amount that you paid. However, in other cases, the refund isn’t taxable. For instance, this rule doesn’t apply if you deducted state sales taxes instead of income taxes on your 2015 return.
Tip: There’s no tax on a refund received for a year for which you claimed the standard deduction.
Small Business Tax Strategies Vol. 12 No. 4 April 2017