Despite outward appearances this past year, all things are in balance.
If your reaction to this is, “Whatchoo talkin’ bout, Willis?...”
I feel ya.
It seems like, when it comes to stimulus and tax policy there’s a problem for every solution.
Here’s a good example:
Without mentioning names, I have a client with the cutest little baby.
Baby girl wasn’t born until well after EIP 1.
What we nerds are calling the first round of stimulus in April (-ish) 2020.
So, no soup for her.
EIP 2 rolls around, and still no money because, well, the stimulus amounts are based on the most recently-filed return.
Which, in the first week of January was Tax Year 2019, for EVERYBODY.
They didn’t even accept 2020 e-file until February 12, 2021. Remember?
Now, I remember when they came to me, how happy I was.
I felt like Santa Claus
They were on the nice list, I said, and they get baby girl’s stimulus money in a little thing called the Recovery Rebate Credit.
Credit, as in refundable credit.
Which means you get it whether or not you pay tax.
So, we get 2020 done, but we had to hold it for logistical reasons on their part for a few days.
Nothing wrong, we just had to wait until this week.
See where this is going yet?
EIP 3 got approved last Thursday the 11th, and the money started going out early this week?
Santa Claus money for the baby is now on its way from 2020, but they just missed getting her money this week because of the date of the filing.
How will they get that $1,400?
More importantly, when?
There’s talk of automatic payments for the non-taxable portion of the Unemployment Exclusion
(More on this in a minute…).
Can they pull that off with the missed stimulus this year as well?
Or will my newest bestest infant friend have to wait for mommy to file in 2022?
Honestly – the IRS really doesn’t know yet either.
I’ll tell you why, now.
Segue, back to the Unemployment Exclusion thing.
The wisdom from on high right now is they’re saying in strenuous certain terms…
…do NOT file an amendment for the non-taxable portion of unemployment benefits they just passed last Thursday.
There is some speculation, from them and industry experts…
…that they may be figuring out a way to automatically calculate the tax savings and send people checks for the difference without a separate filing.
If it’s true.
The experts I reference believe the IRS has the data, and the capability to mine it.
I like unicorns, too.
I mean, they’ve had a hard year, too, but they kind of have a reputation, know what I mean?
Whatever the heck is going on, there’s another month to figure it out.
We have until May 17th to file Form 1040 individual and family income tax.
I believe most, if not all, of the states with an income tax (42 of them) will follow suit.
My home state, Colorado, already has.
It’s ostensibly to ease people’s financial burdens.
Quite frankly, I believe the nice IRS people are probably also reveling in the extra time to get their collective poop in a group as well.
Use it wisely! And remember…
If you’re getting a refund don’t wait – file!
They’re enjoying YOUR money every day they have it.
More importantly, you’re NOT.
We are taking advantage of the extra time here to be as thorough for existing as well as new clients as possible.
And we are still taking new clients, as of today anyway.
Let us know if we can help, and continue to have a happy and healthier 2021!