Happy Lemming Posted April 11, 2020 Share Posted April 11, 2020 2 hours ago, carhill said: So far no signs of stimulus package payments... Speaking of stimulus payments, do you know if the $1200 payments to individuals will be considered 2020 income?? Or will they consider the funds an advance of your 2020 tax refund and deduct that amount from your 2020 income tax refund?? Will the $1200 have to be claimed as income for your Premium Tax Credit (for ACA health insurance) on Form 8962?? Just trying to figure out if I need to adjust my quarterly estimated tax payments for 2020?? Link to post Share on other sites
Ellener Posted April 11, 2020 Share Posted April 11, 2020 1 hour ago, Happy Lemming said: do you know if the $1200 payments to individuals will be considered 2020 income yes, counts as taxable income ( as do the benefits ) 1 hour ago, Happy Lemming said: trying to figure out if I need to adjust my quarterly estimated tax payments for 2020 I haven't decided whether to claim benefits on offer yet, what is likely to happen with my business is it will go crazy once the lockdowns ease up. Trying to decide if that will be some weeks, especially for my nursing home work. The stimulus payment may be enough to tide me over otherwise. But I plan to pay a minimal payment for estimated tax this week. I've been doing this so long I can usually get my taxes to within $100 either way by the end of the year. 1 Link to post Share on other sites
carhill Posted April 11, 2020 Share Posted April 11, 2020 56 minutes ago, Happy Lemming said: Speaking of stimulus payments, do you know if the $1200 payments to individuals will be considered 2020 income?? Or will they consider the funds an advance of your 2020 tax refund and deduct that amount from your 2020 income tax refund?? Whatever you receive based on your 2018/2019 AGI is a done deal, no effect on 2020 taxes. If your 2020 income puts you over and you otherwise wouldn't have received the stimulus, they won't claw it back. It's yours, not taxable at the federal level. 58 minutes ago, Happy Lemming said: Will the $1200 have to be claimed as income for your Premium Tax Credit (for ACA health insurance) on Form 8962?? Good question. I would count on 'yes' and work the numbers that way. If other, gift. I do know capital gains, even if untaxable, counted towards ACA income when settling that issue. I dealt with it when selling a rental a few years ago and reporting a capital gain on the sale. 1 hour ago, Happy Lemming said: Just trying to figure out if I need to adjust my quarterly estimated tax payments for 2020?? I'd go as normal, leave the 1200 out of the calc, and deal with it next year. 1 Link to post Share on other sites
SincereOnlineGuy Posted April 12, 2020 Share Posted April 12, 2020 (edited) Why are you people misleading others about the $1200 payments? You are borrowing money from yourself. Of course there is no federal income tax on money you are borrowing from yourself. It's like having $1200 in a cookie jar... and you take it out to buy beer and Jujubes. Uncle Sam doesn't come along with his hand out in such a case. It would be like paying Federal Income Tax on your Obamacare premium tax credits. (the monthly premium is $650-ish... and the tax credit is $575-ish) (you don't reach the end of the year, then do your taxes, and decide you owe income tax on the $6900... ) Edited April 12, 2020 by SincereOnlineGuy Link to post Share on other sites
CautiouslyOptimistic Posted April 12, 2020 Share Posted April 12, 2020 11 minutes ago, SincereOnlineGuy said: Why are you people misleading others about the $1200 payments? Nobody is purposefully misleading anyone. And I'm still confused. 1 Link to post Share on other sites
spiritedaway2003 Posted April 12, 2020 Share Posted April 12, 2020 (edited) 7 hours ago, Happy Lemming said: Speaking of stimulus payments, do you know if the $1200 payments to individuals will be considered 2020 income?? Or will they consider the funds an advance of your 2020 tax refund and deduct that amount from your 2020 income tax refund?? Will the $1200 have to be claimed as income for your Premium Tax Credit (for ACA health insurance) on Form 8962?? Just trying to figure out if I need to adjust my quarterly estimated tax payments for 2020?? Speaking of stimulus payments, do you know if the $1200 payments to individuals will be considered 2020 income?? No. Not considered a taxable income. Or will they consider the funds an advance of your 2020 tax refund and deduct that amount from your 2020 income tax refund?? No. It's not an advance. Will the $1200 have to be claimed as income for your Premium Tax Credit (for ACA health insurance) on Form 8962?? Don't know. Just trying to figure out if I need to adjust my quarterly estimated tax payments for 2020?? Probably not. See above. Some people who have direct deposit set up for tax filing can see a pending credit on their banking accounts, to be deposited on 4/15. Edited April 12, 2020 by spiritedaway2003 removed hyperlink 1 1 Link to post Share on other sites
FMW Posted April 12, 2020 Share Posted April 12, 2020 (edited) The way I understand it, it is an advance on a tax credit, so you get the money now instead of having to wait to claim it next year on your 2020 returns. A one-time tax reduction that instead of having it deducted from the amount you owe next year, you get the cash in hand now. You will still get whatever amount you would have gotten anyway based on your normal taxable income as a refund, this won't affect that amount. Edited April 12, 2020 by FMW 1 Link to post Share on other sites
major_merrick Posted April 12, 2020 Share Posted April 12, 2020 From what I understand, the $1200 is not considered taxable. I am suspicious of this money, although I'll take it. Either this is being created out of thin air, or we're borrowing from somewhere. This is one case where having a large family is quite beneficial. With all the adults and kids in my house, my family stands to gain around $15,000. I have direct deposit, and I have yet to see the money. I'm gonna cash it out and save it as soon as it arrives, just in case the Feds decide they want it back. I'm hoping there's some way I'll be able to claim my 4th child who is due in July 😊 Link to post Share on other sites
basil67 Posted April 12, 2020 Share Posted April 12, 2020 It will be come from your federal budget...will simply make the debt bigger. But when spent, it goes back into the economy anyway. I'm sure the Feds won't want it back 😆 Link to post Share on other sites
Art_Critic Posted April 12, 2020 Share Posted April 12, 2020 16 minutes ago, major_merrick said: I'm hoping there's some way I'll be able to claim my 4th child who is due in July 😊 They use the number of dependents that were claimed on your 2019 or 2018 tax return to determine the amount to send you so your unborn baby will not get 500.00 My family is 2 adults and one dependent child that are on the previous years tax returns, so the amount would be 2900.00 There is a way of getting the money if you have not or needed to file those 2 years in returns for whatever reason, like not having any income. IRS.gov has that info Link to post Share on other sites
major_merrick Posted April 12, 2020 Share Posted April 12, 2020 I heard that children born in 2020 would receive a kind of "rebate" on 2020 taxes once those taxes are filed in 2021. But who knows... Link to post Share on other sites
Art_Critic Posted April 12, 2020 Share Posted April 12, 2020 3 minutes ago, major_merrick said: I heard that children born in 2020 would receive a kind of "rebate" on 2020 taxes once those taxes are filed in 2021. But who knows... https://www.irs.gov/coronavirus/economic-impact-payment-information-center Children born in 2020 have never been mentioned so I wouldn't hold your breath that someone who doesn't have a birth certificate can get 500.00 1 Link to post Share on other sites
Ellener Posted April 12, 2020 Share Posted April 12, 2020 8 hours ago, carhill said: 2018/2019 AGI is a done deal, no effect on 2020 taxes I call 2020 taxes the ones I am paying estimated payments towards now and submit in 2021. I thought everyone did. 2 hours ago, spiritedaway2003 said: Speaking of stimulus payments, do you know if the $1200 payments to individuals will be considered 2020 income?? No. Not considered a taxable income. That's incorrect. They will be taxed in 2021 as part of taxable earnings for this year ( 2020 ) for me as a contractor; no idea how it works for employees. The benefits paid also count as taxable income. Link to post Share on other sites
carhill Posted April 12, 2020 Share Posted April 12, 2020 (edited) I'm going to call you wrong, specifically at the federal level, based on Forbe's analysis and we'll see who's right next year. I've been doing taxes since 1976 without audit so I'm pretty good at what I do. It won't impact me either way since I haven't paid federal taxes in over 20 years, legally. Edited April 12, 2020 by carhill Link to post Share on other sites
Ellener Posted April 12, 2020 Share Posted April 12, 2020 1 hour ago, carhill said: I haven't paid federal taxes in over 20 years, legally. Blimey. Is that a good thing? Link to post Share on other sites
carhill Posted April 12, 2020 Share Posted April 12, 2020 Ask corporate America, I learned everything I know from them 👍 Link to post Share on other sites
Art_Critic Posted April 12, 2020 Share Posted April 12, 2020 6 minutes ago, Art_Critic said: https://www.irs.gov/coronavirus/economic-impact-payment-information-center Children born in 2020 have never been mentioned so I wouldn't hold your breath that someone who doesn't have a birth certificate can get 500.00 Actually I did see something that said that when you file your 2020 taxes in a year that if you have more dependents then you can get the 500.00 at that time for them, so in a way you can just in the tax year for 2020 Link to post Share on other sites
carhill Posted April 12, 2020 Share Posted April 12, 2020 As a control, no signs yet of any pending EFT, 83 page 2019 return filed Jan 30, ACA SOC refund received seven days later via EFT and IRS has used the same sweep account for refunds for the last eight years. More problematical in general and perhaps fodder for a different thread is UI through the various EDD's, PPP and -19 CARES support for sole proprietors and small businesses through SBA. There's apparently a lot of hitches in that one's gittalong. Link to post Share on other sites
major_merrick Posted April 12, 2020 Share Posted April 12, 2020 (edited) 17 minutes ago, Art_Critic said: Children born in 2020 have never been mentioned so I wouldn't hold your breath that someone who doesn't have a birth certificate can get 500.00 If it sounds too good to be true, it probably is LOL. Just something I heard on the radio. We'll find out in a year... Edited April 12, 2020 by major_merrick Link to post Share on other sites
CautiouslyOptimistic Posted April 12, 2020 Share Posted April 12, 2020 Anyone know what the "cutoff date" is for using your 2018 tax return vs. 2019 tax return? Doing my taxes tonight and not sure I want to hit "send" yet because I made more in 2019 than I did in 2018..... Link to post Share on other sites
carhill Posted April 12, 2020 Share Posted April 12, 2020 Info on stimulus payment schedule and portals from Forbes: https://www.forbes.com/sites/zackfriedman/2020/04/11/stimulus-check-irs-faster/#39e544f019cc 3 hours ago, CautiouslyOptimistic said: Doing my taxes tonight and not sure I want to hit "send" yet because I made more in 2019 than I did in 2018..... You can delay 2019 taxes, both filing and any payment, until July 15, 2020. If you think 2019 will be higher and reduce or eliminate stimulus payment, I'd delay. Payments are going out now based on what IRS has, so they have 2018 and will go on that. They won't claw it back if higher in 2019 2 Link to post Share on other sites
CautiouslyOptimistic Posted April 12, 2020 Share Posted April 12, 2020 5 hours ago, carhill said: Info on stimulus payment schedule and portals from Forbes: https://www.forbes.com/sites/zackfriedman/2020/04/11/stimulus-check-irs-faster/#39e544f019cc You can delay 2019 taxes, both filing and any payment, until July 15, 2020. If you think 2019 will be higher and reduce or eliminate stimulus payment, I'd delay. Payments are going out now based on what IRS has, so they have 2018 and will go on that. They won't claw it back if higher in 2019 Yes, I think I will do that. I have it all done and saved in TaxAct and just have to hit file. The hard part is done. Link to post Share on other sites
introverted1 Posted April 13, 2020 Share Posted April 13, 2020 On 4/11/2020 at 9:11 PM, FMW said: The way I understand it, it is an advance on a tax credit, so you get the money now instead of having to wait to claim it next year on your 2020 returns. A one-time tax reduction that instead of having it deducted from the amount you owe next year, you get the cash in hand now. You will still get whatever amount you would have gotten anyway based on your normal taxable income as a refund, this won't affect that amount. Yep. According to the Tax Foundation "Technically, these rebates are a refundable tax credit for tax year 2020 (the tax return you file in April 2021). However, they are being paid out in advance based on your most recently filed tax returns (2018 or 2019 tax year) to get them to you immediately. It is not an advance on any existing credit, or on your 2020 tax refund; it’s a new credit, tied to 2020 taxes, being paid out in advance." On 4/11/2020 at 10:05 PM, major_merrick said: I heard that children born in 2020 would receive a kind of "rebate" on 2020 taxes once those taxes are filed in 2021. But who knows... Yep again. Also from the Tax Foundation: "some people will have children to claim on their 2020 tax returns that weren’t around to be claimed previously, entitling them to a larger benefit. Here too, the difference can be claimed as a refundable credit in 2020." That said, there is apparently some anomaly in some states' tax rules that can cause the money to be taxable at the state level. 1 Link to post Share on other sites
carhill Posted April 13, 2020 Share Posted April 13, 2020 Yes, taxation at the state level varies. The effects on ACA remain to be seen. If the payment is treated as a refundable credit of federal tax not subject to claw-back, then IMO it will not affect ACA since it isn't earned or unearned income. However, that nuance will only impact those who have received or are receiving any form of premium subsidy through the ACA program and only to the extent of how much the payment increases their income relevant to the ACA thresholds. Bla, bla, IMO don't worry about it. However, if it's not a one time payment, meaning .gov decides to send out more, it could become relevant, especially for those on heavy subsidies and with large families getting a big payment. 1 Link to post Share on other sites
Author Happy Lemming Posted April 13, 2020 Author Share Posted April 13, 2020 3 hours ago, introverted1 said: It is not an advance on any existing credit, or on your 2020 tax refund; it’s a new credit, tied to 2020 taxes, being paid out in advance." So does that mean that the $1200 will be some sort of income (taxable income, line 11b on Form 1040) for 2020 (when I file in April, 2021) or will it be part of my actual tax liability that is calculated (lines 12a thru line 16 on From 1040)?? I wonder if the IRS will add a line to the 2020 Form 1040?? Please and Thank You! Link to post Share on other sites
Recommended Posts