The Internal Revenue Service announced Monday that it will begin sending out the second batch of $1,400 stimulus payments this week, this time via paper checks and prepaid debit cards sent through the mail as well as by direct deposit.
The AICPA welcomed the IRS’s postponement of the April 15 income tax filing and payment deadline to May 17 but said the measure falls far short of needed taxpayer relief.
After IRS Commissioner Charles Rettig, in a congressional hearing Thursday, sought to justify the Service’s limited postponement, AICPA President and CEO Barry Melancon pushed back, arguing the limitation hurts small business owners and calling upon CPAs and others to ask their U.S. senators and representatives to intervene.
The American Rescue Plan waives federal tax on up to $10,200 of unemployment benefits per person in 2020.
The $1.9 trillion Covid relief bill limits the tax break to those with less than $150,000 in modified adjusted gross income.
Anyone pursuing legal claims cares about taxes they may have to pay when they recover. Yet determining how a settlement will be taxed can be tricky. What’s more, in some cases the legal fees you pay to get a lawsuit settlement can't be deducted. Bizarrely, it can mean paying tax on 100%, even if 40% goes to your lawyer off the top.