I have had lots of questions regarding the Stimulus Package. My answers have been pretty generic thus far because it was not law. Now my answers may be that I don’t have all of the answers yet. Once a bill becomes law, then all of the pieces must be implemented. We will be waiting on IRS guidance on may of the items in this bill, but here is the summary.
- $1,200 to individual filers with AGI below $75,000. It will phase out between $75,000 and $99,000
- $1,200 to Head of Household filers with AGI below $112,500 It will phase out between $112.500 and $136,500.
- $2,400 for joint return filers with AGI below $150,000. It will phase out between $150,000 and $198,000.
- The credit will be advanced by direct debit or check based on the 2019 tax return (1st), 2018 tax return (2nd), or Forms SSA-1099/RRB-1099.
- Coronavirus-related distributions up to $100,000 are not subject to 10% additional tax.
- Coronavirus-related distributions can be paid back for a 3-year period starting the day after distributions were made.
- Coronavirus-related distributions can be included in income equally over 2020, 2021, and 2022.
Required Minimum Distributions(RMD)
- All RMD distributions have been suspended for the tax year 2020. You are not required to take these distributions for 2020 only.
- Even if you take the standard deduction, you will now be able to take up to $300 income adjustment for charitable contributions
These are most of the individual benefits. There is a lot to this new law. There are many more benefits for Businesses and Self-Employed, but it is way too much to cover in one post.
Feel free to reach out to our office if you have any questions or concerns and we will do our best to answer them.