Ostrem Tax Preparation

02/05/2023

11/22/2021

Lol!

04/01/2021

IRS to recalculate taxes on unemployment benefits; refunds to start in May....

To help taxpayers, the Internal Revenue Service announced today that it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan.
The legislation, signed on March 11, allows taxpayers who earned less than $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly and $10,200 for all other eligible taxpayers. The legislation excludes only 2020 unemployment benefits from taxes.

Because the change occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund. The first refunds are expected to be made in May and will continue into the summer.

For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.

For those who have already filed, the IRS will do these recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns.

There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.

03/13/2021

Good evening friends and clients. I have received guidance from the IRS regarding the new American Rescue Plan. As I am sure that you have heard, those that have already filed a return that included unemployment benefits that now have the first $10,200 of benefits as non-taxable, we have been advised to NOT FILED AN AMENDED RETURN right now. We are to wait for more instructions. They will let the tax software companies know what we have to do soon to finish up the tax returns that have not been filed yet.

Also, the new stimulus for those that are qualified will be $1400 per person for each person claimed on your return, including college students and elderly parents. There is no restriction on the age of the dependents, which is great news.

I will post more information as it becomes available.

11/27/2020

Happy holidays, dear clients. I hope you will enjoy the season ahead and start getting your tax papers together! Ho Ho Ho!

That being said, please know that I will not be accepting any new clients for the 2021 tax season. Because of all of your loyalty and work of mouth advertising, my calendar is full with the clients that I already have. Thank you for your patronage to me for these years and you will be receiving an email from me next month with instructions on how to make your appointment online for this tax season. See you soon!

04/15/2020

https://www.irs.gov/coronavirus/economic-impact-payment-information-center

Check out this page for a plethora of answers to questions about the stimulus payments.

All U.S. residents who are not a dependent of another taxpayer and have a work eligible social security number, will receive the Economic Impact Payment with adjusted gross income

04/15/2020

Ok - here is something new. I owed the Federal this year for my tax return (who would have thought!) but I felt that my account number was on the return (for the auto withdrawal) but there is a new portal out there called GET MY PAYMENT. I entered the information from my return and they responded that they didn't have the information available for a direct deposit. So I entered more information required and they said that I would now get my stimulus check direct deposited.
So - for those of you that owed the government this year (or last year if you haven't filed yet) you should probably go to the link provided here (It really is the IRS) and enter your bank routing number and account number for the deposit.
Use Get My Payment to get information about your payment status and payment type.

Use Get My Payment to get information about your payment status and payment type.

04/13/2020

NOTE: THIS IS NOT FOR ANYONE RECEIVING PAYMENTS FROM THE GOVERNMENT!! Only for those who don't have to file and are not getting social security, SSI or any other payment from the Federal Government. Note the disclaimer on the bottom of this bulletin. Should not apply to many, but it will allow the IRS to have your bank information to direct deposit the stimulus check when you wouldn't normally file.

The IRS launched a solution that allows taxpayers who don’t normally file a tax return (i.e. income is under the filing threshold) to provide the minimum information required for purposes of receiving Economic Impact Payments (commonly known as stimulus checks).

What action should I take?

Users with clients that are not required to file a full 2019 or 2018 tax return because they don’t meet minimal filing requirements and are eligible to receive Economic Impact Payments, should be directed to the following IRS link:

https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

Please note: This process is not for taxpayers that intend to later file a 2019 tax return. Doing so will result in the 2019 return receiving a duplicate SSN e-file rejection.

Steps to receive the Economic Impact Payment if you haven't filed a tax return for 2018 or 2019, and aren't receiving Social Security, SS Disability Income or Railroad Retirement benefits. This payment is also referred to as "stimulus checks" or "coronavirus relief."

03/31/2020

Now, I have received conflicting information about those who are on disability or social security about whether or not they file to actually file a return. One source tells me that the stimulus payment will be deposited in the same account that the SS or VA payments are deposited into without filing a return. LET ME CHECK ON THIS.

Another question folks have - if you owe taxes on this years return or past years - you will receive the entire stimulus check due and they will not apply it to back taxes. Good news on this issue!

Also, it has been determined that the stimulus payment will not be taxable for 202. HOWEVER, the income factors come into play for filing your 2020 return next year. If you qualified for the payment based on your 2019 or 2018 return and you won't qualify due to increased income in 2020, you may have to pay a portion of the check back. The payment rules are as follows: The payment for those with incomes above the $75000/$150000 limit will be reduced by $5 for each $1000 above the threshold up to $99000/$198000 threshold will receive no payment. So this will be calculated based on your 2020 return and the repayment, if any, will be taken out of your 2020 refund. I know this is complicated, but most folks won't have to worry about this. :-)

Hope is information is helpful to you! Take care and stay healthy!

03/31/2020

Here is the guidance from the IRS that we have been waiting for in order to apply and qualify for the stimulus payments. It appears that tax returns will have to be filed to be able to get the payment. Read this:

Breaking News from the IRS
Following is guidance put out this evening from the IRS regarding the stimulus payments. Note, despite prior indications, everyone will be required to file a tax return to receive the stimulus payment (see the 4th question). Stay tuned for further developments.

Economic impact payments: What you need to know
Check IRS.gov for the latest information: No action needed by most people at this time
IR-2020-61, March 30, 2020

WASHINGTON – The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.

Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.

How will the IRS know where to send my payment?
The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.

The IRS does not have my direct deposit information. What can I do?
In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

I am not typically required to file a tax return. Can I still receive my payment?
Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.

How can I file the tax return needed to receive my economic impact payment?
IRS.gov/coronavirus will soon provide information instructing people in these groups on how to file a 2019 tax return with simple, but necessary, information including their filing status, number of dependents and direct deposit bank account information.

I have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?
Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.

I need to file a tax return. How long are the economic impact payments available?
For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.

Where can I get more information?
The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.

The IRS has a reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.

To explain the tax relief for those affected by coronavirus.