Stimulus Payments and what you need to know
As America toil and rile under the pandemic’s spell, relief packages worth billions have started to find their way into everyone’s bank accounts. Some have started tasting their share of peace from the checks while some still find themselves scrambling to get their payment confirmed before pending bills and liabilities reach their dreaded due dates.
As shopkeepers, salons, and hoteliers slowly crawl back to business, stories of hurdles appearing in their way to checks have emerged, and honestly, it has given a waking jolt to many still in line. If anything is to be understood from their struggles, it is to stay updated with the guidelines and know what documents must be kept ready.
Paperwork and the prescribed way of applying
If you are in a fix after trying the IRS site, then you are not alone. The improvements in the site’s working have been a halt over the months, but filling out the address form still seems to be a task for many.
It so happens that you are bound to have problems if you have entered an address that differs from your previous tax returns. So keep your tax return documents at the ready to avoid any hassles. The site usually updates all information after midnight. If you have never filed returns due to your income being below $12,200 or $24,400 as a married couple, you are still eligible for the payments, but you should get in touch with the IRS and assist them as they take you through the process. The same is advised for those who do not have a bank account or social security number, mostly children under the age of 16 who are currently experiencing time consuming procedures while applying. In such cases, the government has to spend considerable time scanning Social Security and VA databases.
Due to the unpredictable shutdown of various industries worldwide, American citizens who have been abroad for a long are eligible for the paycheck as long as they have a Social Security Number and are not registered as dependent by another taxpayer. Citizens from US territories are advised to check with their local tax authorities regarding the best ways for claiming the check.
Suppose any payment is received for a deceased citizen. In that case, the family or person who has received the check at the registered address is required to return the payment check by following the necessary guidelines on the IRS portal.
Options for Small Business Owners and employees
If your business establishment has fewer than 500 employees, the Small Business Administration has a few loan programs that provide grant money.
PPP or Payment Protection Program is currently the most popular option as a loan at an attractive 4 percent interest. It is mainly aimed at supporting small business owners with the payment of employees. The amount received is calculated as 2.5 times the average payroll for the month to cover two and a half months of employee paychecks, including healthcare bills and paid sick leave. The limit of this provision is 10 million dollars. One should be careful if they have plans to reduce their employee numbers after applying for PPP. The termination laws and inquiries that follow are simple inconveniences that a business owner would not want to wade into. If the reduction has to be done within the framework of the law, the payment received after will have the adequate cuts.
EIDL or Economic Injury Disaster Loans are another federal stimulus package under the CARES act for declared disasters. If your business is registered as an ESOP or tribal small business and has under 500 employees, the SBA will initiate loan disbursements of $15,000 and follow with a payment of $10,000 that does not need paying back if used on certain prescribed expenses. If a business owner is allowed payment under both PPP and EIDL, then a grant amount will be taken off their PPP as forgiveness cut. Sole proprietors, independent contractors, and most non-profit owners are eligible to apply for EIDL.
Other federal programs under the CARES act deal with paid and family leave along with tax credit provisions to help businesses.
Avoiding panic if payment is stuck or delayed
If your tax returns in 2018 or 2019 were processed through a third-party company, the chances are that they had filed returns on your behalf using temporary accounts. This procedure, called refund anticipation loan, could have led the IRS to store information about your last returns based on the aforementioned temporary account. In such a scenario, the stimulus payment could find its way to these accounts. Unfortunately, due to the current situation, much of the bank account information might experience remittance issues. Users of Republic Bank have mostly faced such situations where some taxpayers had their previous year tax returns paid through Republic Bank. In such cases, the IRS sends paper checks to the address on your tax returns or the registered address in the U.S. Postal Service. Now that social distancing norms are to be strictly followed by federal agencies; the IRS will be depending on direct deposits to make things easier for you.
As many of us know, the IRS will not have updated or tracked changes in addresses due to a common practice of not letting the tax agency anywhere near their account information or deposit and transfer history. They usually pay their tax bills and get their refunds through paper check procedures. If you are looking forward to changing your approach and getting your payments quickly, you can head over to Get My Payment tool to understand how your checking account information is being carried out by the government. As we understand, getting your payments on your prepaid card is not an option unless registered on the Get My Payment tool, which has its provisions if you wish to direct your payments that way.
With a mind-boggling amount of money flowing, the risk of fraud increases multiple folds. The IRS tries to check any malpractice by anyone in the country by releasing payment confirmation letters within 15 days of payment processing. If your payment has not reached you despite crossing the prescribed number of days, now might be the time to inquire about the check’s status and whereabouts.
For the ones out there who are worrying about any prior liabilities that they owe to the IRS, guidelines indicate that any of such back taxes would not be deducted from your stimulus payment. The IRS has put up their FAQ pages for people who still find the process confusing, along with steps to help you calculate your returns on your own.
For more information related to our highly effectual tax planning or for an expert’s guidance in filing your tax returns, do contact us at https://ubos.pro/contact/. At UBOS, we assure you that we won’t let you down with our stellar tax-saving strategies. To know more, about our tax planning strategies visit https://ubos.pro/tax-planning/.