Frequently Asked Questions

Covid Stimulus FAQs

Are stimulus payments taxable?

Stimulus or economic impact payments you received aren’t includable in your gross income, thus they are not taxable.

Who qualifies for a recovery rebate?

You are eligible if in 2020:

  • US Citizen, resident alien and have a valid social security number.
  • Weren’t a dependent of another taxpayer
  • Your income doesn’t exceed $150,000 for married filing joint, $112,500 for head of household or $75,000 for single or married separately

If I didn’t get my stimulus payments can I get them on my 2020 tax return?

Yes, the recovery rebate is based on your 2020 tax return. If you didn’t receive either of your payments, they will be added to your 2020 refund.

What if you received too much stimulus based on their 2018 or 2019 tax return?

No action is required if payments exceed the amount they qualify for. You can keep the overpayment.

How is the stimulus payment calculated?

Eligible individuals receive $1200 or $2400 for married couples. Also add $500 for each qualifying child.  Subtract 5% for each dollar above the income threshold.

Tax Preparation FAQs

What can the IRS do to collect money you owe?

If you do not pay taxes you owed to the IRS, they are legally entitled take  one or more of the following collection actions:

  1. Filing a Notice of Federal Tax Lien against your property. A federal tax lien may appear on your credit report. Once a lien is filled you won’t be able to sell or otherwise dispose of the property until the lien is released.
  2. Notice of Levy. The IRS may levy assets such as your wages, bank accounts, Social Security benefits, retirement income and seize property you own.
  3. Offsetting a refund. If you are entitled to tax refund, the IRS can take the refund to pay off tax debts you owe.
  4. Garnishments. The IRS can garnish your wages. They have the right to tell your employer to send part of your wages to them to pay off tax debts.

Are unemployment benefits taxes?

Most unemployment benefits are taxable on both federal and state levels. Unemployment benefits are reported to the IRS on Form 1099-G showing the amount paid to you and whether taxes were withheld.

I received form 1099-C for amounts unpaid amounts when my credit card was cancelled. Do I have to pay taxes on it?

if you have cancellation of debt income because your debt is canceled, forgiven, or discharged for less than the amount you must pay, the amount of the canceled debt is taxable, and you must report the canceled debt on your tax return for the year the cancellation occurs. There are certain exceptions on a case-by-case basis which may reduce or eliminate the amount of taxable income.

What forms do resident aliens use to file US taxes?

U.S. resident aliens you use the same forms and mailing addresses as U.S. citizens. If you are a resident alien for the entire year, you can use the same filing statuses available to U.S. citizens and claim the same deductions allowed to U.S. citizens.

Are Social Security benefits taxable?

Your social security benefit statement form SSA-1099 should have been mailed to your in January. If you didn’t get your copy, you can download a copy by logging in to “my social security account”. SS benefits may be taxable depending on your age (have you reached your normal retirement age), marital status and how much other income you have such as pensions, retirement accounts, or part-time work.  The government taxes as much as 85% of Social Security payments for seniors who earn more than $34,000 ($44,000 married).

Do I have to claim my child as a dependent to quality as Head of Household for taxes?

To qualify for head of household filing status, you must have a qualifying child or a dependent who is a close relative living with you who you support. However, a custodial parent may be eligible to claim head of household even if they released a claim to exemption for the child. Also, if a parent qualifies as your dependent, they don’t have to live with you.