Dear Clients, Family and Friends:
Wow, what a year 2020 has been! We would like to take a moment to express our sincerest apologies to those of you that had to wait longer than you should have for your tax returns in the 2020 tax season. This year threw things at us that we never expected: COVID-19 complications, employment issues, the inability to contact any State or Federal agency - - the list goes on. Now that 2020 is ending, it’s time to start thinking about getting your taxes taken care of.
Didi is our newest Serenity team member, and she is here to be your point of contact. If you would like to set up a prescheduled appointment, Didi is your gal! You can reach her at 218.464.1510 or at email@example.com.
Of course, Deni, Dani, and DJ are all here to assist you in all things tax, while Sheri is here to keep the office running smoothly and keep us all in line (this is a BIG job).
Visit our Facebook page and Website (www.serenityduluth.com) for updates on all things tax, bookkeeping, and payroll. You can also contact us with questions or to request information in both places.
We are going to be doing things a little differently this year,
please read the following carefully!
Our Tax Season hours begin January 25, 2021
Monday – Thursday 8:30 a.m. to 8:00 p.m.
Friday - Saturday 8:30 a.m. to 5:00 p.m.
While we are “OPEN” during these hours, our interior office door will be locked. The drop bin that was implemented will still be in the entry area.
We will NOT be taking any in-person appointments this year, but we will still be able to help you complete your taxes. We are all disappointed that we will not be able to have our face-to-face interactions this year, however, our priority is the health and safety of our employees and clients. We appreciate your understanding.
There will be a learning curve in all of this, and we ask for your patience as we all figure it out together. While the way we take tax appointments has to change this year, the process of completing your return has not changed.
Here is a step-by-step list of what we will be doing:
Please note – if you make an appointment and do not have your information here at least 3 days prior, your appointment will be rescheduled once we receive your documents. The new appointment could be affected by availability of your preparer. In a normal year we schedule appointments close together, this year we will be allowing more time between appointments to allow for (possible) completion of returns.
If you normally drop off your information without an appointment, please feel free to do the same this year. These returns are processed in the order they have been received.
Some notable facts for the 2020 Tax Season:
Business .575 .56
Charity .14 .14
Medical .17 .16
Dependent credits are the same as last year:
Child Tax Credit $2,000
Other Dependent Credit $500
The Child Tax Credit is for your child ages 16 and under. The Other Dependent Credit is for your child who is 17 or older, and other dependents that are not your child (ask your preparer for more information on determining if someone qualifies as an Other Dependent)
Unemployment benefits ARE taxable income, including the extra Federal $600 per week if you received it. This could result in a tax due if you did not have enough withholding. When MN first started distributing the extra $600, they were not able to take withholding from it, even if you had it set up to have withholding from your regular unemployment. We are unsure if this was corrected for the new unemployment extension.
401(k) contribution limits: $19,500 (+ an additional $6,000 catchup for over 50)
IRA Contributions: $6,000/person (+ an additional $1,000 catchup for over 50)
Distributions that are COVID-19 related:
The 10% early distribution penalty will not apply for 2020
You may also opt to pay the general income tax because of your corona virus-related distribution over the next 3 years, or you can pay it in 2020. (Basically, if you had a distribution of $9000, you may choose to have $3000 reported as income in 2020, 2021, and 2022)
If you have other questions regarding your retirement plans, we recommend speaking with your financial advisor.
If you have a dependent that is a student, that also files a tax return, make sure they mark their return that they CAN be claimed as a dependent on another’s return. If they don’t, you will not be able to claim the student, or the credits that go along with them.
Married, but thinking about filing separately?
There are disadvantages.
The following is a list of credits/benefits that you do not get if you file separately
Premium Tax Credit (health insurance):
There is still no penalty for not having insurance.
If you get a reduced insurance premium through your state (Affordable Health Care) You still need to claim it on your tax return. Be sure to bring in your 1095-A, not having it can delay refunds or cause you to pay in.
You will receive a form – Notice 1444 from the IRS stating what you received for stimulus payments in 2020. If you did not get the amount you should have gotten, either too little or too much; this will be adjusted on your 2020 tax return, depending on IRS instructions still being drafted.
Minnesota and Wisconsin
There are no significant changes to the MN or WI returns for 2020.
Due to the extra items involved with the 2020 taxes, we will be increasing our base price by $5 per filing location, so Federal and one State will now start at $150.
If your return involves any bookkeeping, including QuickBooks, spreadsheets, or going through receipts/bank statements before the tax return can be completed, this preparation will be billed at $75 per hour in addition to the cost of the tax return.
Tax Planning for 2021, and beyond, will also be billed out at $75/hour.
If we need to make a call to the IRS on your behalf, this could also result in a $75/hour charge, depending on the circumstances of the call.
For those clients that have dependents (children) on their tax return and want Serenity to complete their returns (if applicable), the price will stay at 50% of what the tax return would be priced at if it were not a dependent return.
Start of IRS e-file acceptance: Late January 2021
Federal/State 2020 filing deadline - Businesses: Monday March 15, 2021
Federal/State 2020 filing deadline - 1040: Thursday, April 15, 2021
Non-Profits (990): Friday May 17, 2021
Quarter 1 (Jan, Feb, Mar) April 15, 2021
Quarter 2 (Apr, May) June 15, 2021
Quarter 3 (Jun, Jul, Aug) September 15, 2021
Quarter 4 (Sept, Oct, Nov, Dec) January 15, 2022
**Filing for an extension does NOT extend your payment deadline, so if you need to file an extension, please talk to your preparer about submitting a payment so that you do not incur penalties**
We are still offering our Referral Discount!
Your loyalty, support, and friendship to the Serenity family is why we are here. We appreciate the opportunity to serve all your tax preparation needs. Your faith in us, through your personal recommendation to others, is humbling. As usual, for your personal recommendations to new tax clients, we discount your next year’s tax preparation by $15 as a thank you.
Because of the disruption that COVID-19 caused during the last tax season, referral letters did not get mailed out like they normally would. Rest assured; these discounts will be honored. We do have notes in everyone’s file but if you do not receive the letter we normally send out, and did refer someone for their 2019 tax return, please let your preparer know so that we can apply the discount for you.
Sincerely, Deni Sheri Dani DJ DiDi
What K-12 tax benefits does Minnesota offer?
Two Minnesota tax benefits help families pay their child’s education expenses: the K-12 Education Credit and the K-12 Education Subtraction.
Both benefits reduce your clients’ state tax and could provide a larger refund when filing Minnesota income tax returns. Last year, more than 36,000 families received the K-12 Education Credit and saved an average of $251. Nearly 192,000 families received the K-12 Education Subtraction.
Do my clients qualify for these tax benefits?
To qualify for either the credit or subtraction, both of these must be true:
1 or 2 $37,500
4 or more Add $2,000 for each additional child
What education-related expenses qualify?
Most expenses for educational instruction or materials may qualify, including:
We have gotten confirmation that the extra $600 that many are getting in unemployment, is NOT having tax withheld nor can they fix this glitch.
I am sure you have already seen the full amount being deposited but just keep in mind that if you want MN to withhold tax, they cannot. Our advice is to set aside the amount that would normally be done on your other UI check (if possible). This is generally 10% for Federal ($60) and 5% for State ($30).
Please keep in mind that Unemployment Benefits are taxable so if you do not have any money withheld, you will be paying in those taxes at tax time...ie: if you normally get a refund, it will be reduced or potentially turned into owing money.
2020 Fast Grants - Applications Due April 23!
The Duluth 1200 Fund has established a grant program called 2020 Fast Grants to support small businesses.
This program is to provide immediate financial assistance to businesses who have been negatively affected by the COVID-19 pandemic. The program is also intended to provide gap funding for businesses who have sought the Small Business Administration’s or Minnesota Department of Employment and Economic Development’s loan programs and have had a difficult time obtaining funding. The 2020 Fast Grants program is seeking to provide local support to preserve 1,200 jobs within the City of Duluth during the Covid-19 pandemic. The PDF application can be found online at www.1200fund.com and includes a list of supporting documentation to be submitted with the application.
Applications and questions should be submitted electronically to: firstname.lastname@example.org. If you require the application or other materials in alternate formats, please email or call 218-730-5310.
Applications will be accepted NOW through 11:59 PM on Thursday, April 23, 2020. Depending on funding availability, additional grant rounds may occur.
Businesses are eligible if they meet the following criteria:
Other requirements: Grantees who have received the grant must provide a report to the 1200 Fund Board as to how the funding was spent.
U.S. Chamber of Commerce Foundation Offering $5,000 Grants to Small BusinessesThe U.S. Chamber of Commerce Foundation, through its “Save Small Business Fund,” is offering the opportunity for small businesses to receive a $5,000 grant to offset economic hardship experienced as a result of the Covid-19 pandemic.
To qualify businesses must:
1. Employ between 3 – 20 people
2. Be located in an economically-vulnerable community
3. Harmed financially by the Covid-19 pandemic
The application is now live. All you will need to apply is your business’s W-9 form. The application process takes 10 minutes.
To see if a business qualifies, click here.
We are here to help. CONTACT US and we'll have someone contact you as soon as possible.
COVID-19 Resources & UpdatesLatest updated COVID-19 Resources Financial Assistance FAQsNational Resources
Both tools (or web-portals) on IRS.gov are now live. Economic Impact Payments
Tool 1: “Filers: Get Your Payment” -- This is the tool where some people can update their Direct Deposit information.
Tool 2: “Non-Filers: Enter Your Payment Info Here” -- Non-filers means those who are not required to file a tax return.
Get My Payment” is working
The Get My Payment site is operating smoothly and effectively. As of mid-day today, more than 6.2 million taxpayers have successfully received their payment status and almost 1.1 million taxpayers have successfully provided banking information, ensuring a direct deposit will be quickly sent.
IRS is actively monitoring site volume; if site volume gets too high, users are sent to an online “waiting room” for a brief wait until space becomes available, much like private sector online sites. Media reports saying the tool “crashed” are inaccurate.
In situations where payment status is not available, the app will respond with “Status Not Available”. The IRS reminds users you may receive this message for one of the following reasons:
You can check the app again to see whether there has been an update to your information. The IRS reminds taxpayers that Get My Payment data is updated once per day, so there’s no need to check back more frequently.
IRS.gov feature helps people who normally don’t file get payments; second tool next week provides taxpayers with payment delivery date and provide direct deposit information
WASHINGTON – To help millions of people, the Treasury Department and the Internal Revenue Service today launched a new web tool allowing quick registration for Economic Impact Payments for those who don’t normally file a tax return.
The non-filer tool, developed in partnership between the IRS and the Free File Alliance, provides a free and easy option designed for people who don’t have a return filing obligation, including those with too little income to file. The feature is available only on IRS.gov, and users should look for Non-filers: Enter Payment Info Here to take them directly to the tool.
“People who don’t have a return filing obligation can use this tool to give us basic information so they can receive their Economic Impact Payments as soon as possible,” said IRS Commissioner Chuck Rettig. “The IRS and Free File Alliance have been working around the clock to deliver this new tool to help people.”
The IRS reminds taxpayers that Economic Impact Payments will be distributed automatically to most people starting next week. Eligible taxpayers who filed tax returns for 2019 or 2018 will receive the payments automatically. Automatic payments will also go in the near future to those receiving Social Security retirement or disability benefits and Railroad Retirement benefits.
How do I use the Non-Filers: Enter Payment Info tool?
For those who don’t normally file a tax return, the process is simple and only takes a few minutes to complete. First, visit IRS.gov, and look for “Non-Filers: Enter Payment Info Here.” Then provide basic information including Social Security number, name, address, and dependents. The IRS will use this information to confirm eligibility and calculate and send an Economic Impact Payment. Using the tool to get your payment will not result in any taxes being owed. Entering bank or financial account information will allow the IRS to deposit your payment directly in your account. Otherwise, your payment will be mailed to you.
“Non-Filers: Enter Payment Info” is secure, and the information entered will be safe. The tool is based on Free File Fillable Forms, part of the Free File Alliance’s offerings of free products on IRS.gov.
Who should use the Non-Filers tool?
This new tool is designed for people who did not file a tax return for 2018 or 2019 and who don’t receive Social Security retirement or disability benefits or Railroad Retirement benefits. Others who should consider the Non-Filers tool as an option, include:
Lower income: Among those who could use Non-Filers: Enter Payment Info tool are those who haven’t filed a 2018 or 2019 return because they are under the normal income limits for filing a tax return. This may include single filers who made under $12,200 and married couples making less than $24,400 in 2019.
Veterans beneficiaries and Supplemental Security Income (SSI) recipients: The IRS continues to explore ways to see if Economic Impact Payments can be made automatically to SSI recipients and those who receive veterans disability compensation, pension or survivor benefits from the Department of Veterans Affairs and who did not file a tax return for the 2018 or 2019 tax years. People in these groups can either use Non-Filers: Enter Payment Info option now or wait as the IRS continues to review automatic payment options to simplify delivery for these groups.
Social Security, SSDI and Railroad Retirement beneficiaries with qualifying dependents: These groups will automatically receive $1,200 Economic Impact Payments. People in this group who have qualifying children under age 17 may use Non-Filers: Enter Payment Info to claim the $500 payment per child.
Students and others: If someone else claimed you on their tax return, you will not be eligible for the Economic Impact Payment or using the Non-Filer tool.
Coming next week: Automatic payments begin
Eligible taxpayers who filed tax returns for either 2019 or 2018 and chose direct deposit of their refund will automatically receive an Economic Impact Payment of up to $1,200 for individuals or $2,400 for married couples and $500 for each qualifying child. Individuals who receive Social Security retirement or disability benefits, SSDI or who receive Railroad Retirement benefits but did not file a return for 2019 or 2018 will automatically receive a payment in the near future.
Coming next week: Get My Payment shows Economic Impact Payment date, helps with direct deposit
To help everyone check on the status of their payments, the IRS is building a second new tool expected to be available for use by April 17. Get My Payment will provide people with the status of their payment, including the date their payment is scheduled to be deposited into their bank account or mailed to them.
An additional feature on Get My Payment will allow eligible people a chance to provide their bank account information so they can receive their payment more quickly rather than waiting for a paper check. This feature will be unavailable if the Economic Impact Payment has already been scheduled for delivery.
Wanted to give all ya'll small business owners, that have applied for the EIDL loans, a bit of information.
Deni actually called today, in query to her own loan, to check on the progress. Let's just say when she called she was # 1,598 in que and it took almost an hour to get to her. If you don't have to call, it is for the best.
Anyway, the only information that can be given at this time (when you call) is that your loan has been received. The folks in the call center cannot see any progress/processing information. Once the application has been processed, an EMAIL (from the .gov site) will be sent out to verify if the loan/grant is still wanted. You must then put in your answer & from there it will continue on the process. She was able to verify that the loan does look at your credit score for part of the approval process. The gal was not able to verify how long this next process is or what type of question(s) are asked. She also was not able to say what other type of info would be given as far as if you are denied and the up to $10K advance. She was able to verify that if anyone does call you in regards to the loan (not likely but entirely possible) that the only way you should give them any info is if they repeat your loan application # to you. This is the confirmation # that you printed/saved once the application was complete.
I know this isn't a lot of information but it is a little something. The take away is, if you call, they won't be able to give you any information so it is best not to waste the hours on hold.
March 30, 2020
Issue Number: IR-2020-61
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.
On March 27, 2020, President Trump signed into law the CARES Act, which provided additional assistance for small business owners and non-profits, including the opportunity to get up to a $10,000 Advance on an Economic Injury Disaster Loan (EIDL). This Advance may be available even if your EIDL application was declined or is still pending, and will be forgiven.
If you wish to apply for the Advance on your EIDL, please visit www.SBA.gov/Disaster as soon as possible to fill out a new, streamlined application. In order to qualify for the Advance, you need to submit this new application even if you previously submitted an EIDL application. Applying for the Advance will not impact the status or slow your existing application.
Victims or targets of stimulus payment scams should report it immediately to the Federal Trade Commission, www.ftc.gov/complaint.
We will provide more information about the IRS’s plans to process stimulus payments as it becomes available.