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Letter to Abacus Tax Solutions Clients


In light of the extraordinary events currently taking place around the COVID-19 pandemic, we are reaching out to our clients with the hope of dispelling some of the fear and confusion surrounding income tax filing for 2019, and also to provide additional information on some of the recent policies that have been put into effect by the federal government. We also want to share with you the changes we have made to our processes in response to the pandemic.

First and foremost, we hope this finds you and your loved ones safe and well. We are mindful that many of you are currently experiencing a great deal of upheaval and change, whether it be from loss of income due to being temporarily furloughed from work, finding yourself as your child’s primary source of education, or even trying to figure out how to safely buy your groceries. These things alone are enough to cause overwhelm, without the additional burden of having to file your taxes. We understand, and we are right there with you, having to contend with many of the same issues.

We have compiled information in this letter that you may find useful. Much of the content of this letter comes from the questions we have received from clients. Some of the information currently available is in a daily state of flux. We will do our best to keep you updated on policy changes as they take place and ask that you regularly check our Facebook page (www.Facebook.com/MaineTaxPreparer/ ) and the homepage of our website for these updates, or use the other links we have provided in this letter to the IRS and US Dept. of the Treasury’s COVID-19 web pages.

As you can imagine, our office has received numerous phone calls and emails regarding this ever-evolving situation; we continue to make every attempt at being responsive in a timely manner. For those who are wondering – yes – we are running behind. Despite the fact that it continues to be tax season for us, we have had to take the necessary time to research and sometimes interpret the information that is available and included in this letter, while also making sure what we are conveying is the most recent and accurate. This, along with trying to keep ourselves and our family safe and healthy, has slowed our typical filing season progress.

In the coming weeks, here is what you can expect from us:

  • We will continue with the preparation of your tax returns, keeping the new 7/15/20 filing deadline in mind. We are committed to continuing to work hard for you, in the most conscientious way. We also know that some of our clients don’t realize that tax season, under the best of circumstances, demands very long hours and little sleep for tax preparers. In light of the current pandemic, we want assure you that are doing our best to provide you with the highest quality of service, while trying to strike the balance of maintaining good health. Remember – we have a vested interest in your return being completed - we don’t get paid until it’s done!

  • When your return has been completed, you will receive notification from us by phone or email that it is on its way. You can expect that it will be delivered to you via USPS first class or priority mail. We will not be meeting with clients in-person to deliver or review returns this year due to the Coronavirus. If you would like to review your return with us, please call or email our office to schedule a phone conference to do so.

  • We ask that, once you receive your completed return, you follow the instructions in the cover letter that is included, and sign and mail back your e-file authorization form and tax preparation payment in the pre-stamped, self-addressed envelope we have provided, as soon as possible. Payment is due upon the completion and delivery of your return, unless other arrangements have been made with our office in advance.

  • Keeping in mind that we are working diligently for you, we also ask that you try to limit any unnecessary phone and email communication at this time. The time it takes to respond to a “just checking in” inquiry is time that can’t be spent on preparing your tax return.

  • If, for any reason, you decide that the changes we have made to our processes in order to navigate the extraordinary circumstances we all are facing don’t align with your expectations of our service, please contact our office and will do our best to assist you with transitioning to a new tax professional.

We hope that you find the information we’ve provided helpful and that it has offered you some comfort and clarification during a time when we are being inundated with more news every day. From our family to yours, please be safe and stay well. We will be in touch soon.

Best regards,

David Hanna

President

Abacus Tax Solutions, Inc.

Tammy Hanna

Executive Asst.

Abacus Tax Solutions, Inc.

The following is important information for taxpayers pertaining to 2019 income tax filing and payment changes and recently announced COVID-19 financial relief.

Changes in the 2019 Income Tax Filing, Payment & Extension Deadlines

Regarding changes pertaining to 2019 income tax filing, here is what we know right now:

  • The 2019 federal income tax filing deadline has been extended to July 15, 2020;

  • To the best of our knowledge, all state income tax filing deadlines, including the State of Maine’s, have also been extended to 7/15/20;

  • Payment of any tax due on 2019 income has also been extended to 7/15/20, and will not be subject to fines, late-filing or late-payment penalties, or interest;

  • If you make quarterly estimated tax payments, the due dates for both the 1st and 2nd quarter payments have also been extended to 7/15/20 without penalty;

  • Effective 4/9/20, this relief applies not only to individual taxpayers, but also to trusts, estates, corporations and other non-corporate tax filers who normally have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020; this also includes Americans who live and work abroad;

  • Also effective 4/9/20, the IRS has approved an extension of time to file beyond July 15. Individual taxpayers who need additional time to file beyond the July 15 deadline can request and extension to October 15, 2020 by filing Form 4868 with the IRS. Businesses who need additional time must file Form 7004.

IMPORTANT REMINDER: An extension to file is NOT an extension to pay any taxes owed. Taxpayers requesting additional time to file beyond this year’s July 15th deadline need to estimate their tax liability and pay any taxes owed by the July 15, 2020 deadline to avoid additional interest and penalties.

Economic Impact Payments (i.e. Stimulus Checks)

With regard to the stimulus package that has been in the news, here is what we know:

On March 30, 2020, the federal government passed the CARES Act. One component of the Act is that the IRS will be issuing Economic Impact Payments (stimulus payments) to those that qualify.

Who Qualifies

Single filing tax payers with adjusted gross income (AGI) of less than $99,000 and joint filers with an AGI of less than $198,000 will receive payment.

How Much You Can Expect to Receive

Individual filers with an AGI of less than $75,000 and joint filers with an AGI of less than $150,000 will receive full payment, which is currently set at $1200 for individuals, $2400 for married couples and up to $500 for each qualifying child;

For those whose income is over $75,000/$150,000 but under the $99,000/$198,000 thresholds, you will receive an adjusted payment that will be reduced by $5 for every $100 that you are over $75,000/$150,000;

How to Determine Whether Your Child will Qualify

For a child to qualify for the $500 Economic Impact Payment, they must have been claimed as your dependent on your most recently filed tax return {2018 or 2019} and been eligible for the Child Tax Credit.

How You will Receive Your Payment

For those who have filed a 2018 or 2019 federal tax return, were due a refund and provided direct deposit information at that time, your Economic Impact Payment will be direct deposited to the bank account you indicated at the time you filed your return.

If you have filed but were NOT previously due a refund, and the IRS does not currently have your direct deposit information, the IRS’s website indicates they are developing an online portal for taxpayers to provide their direct deposit information. Our initial letter dated April 11, 2020 stated that "as of today’s date, we find that the IRS’s portal is not yet live." Over this past weekend, the IRS did launch its online portal; however, currently only non-filers are able to provide direct deposit information.

If you DO NOT provide direct deposit information to the IRS, you will receive a payment by check to the last known address they have for you.

Additional Useful Information

Social Security Recipients

Social Security recipients DO qualify for Economic Impact Payments. Your payment will be direct deposited to the same account that your Social Security check is deposited to, and you do not need to file a tax return to receive your payment.

If You Don’t Typically have a Filing Obligation

If you do not typically have an income tax filing obligation, you may still qualify to receive an Economic Impact Payment. As an adult filer, you must not have been claimed as a dependent on anyone else’s most recently filed tax return (2018 or 2019) to qualify.

Over this past weekend, the IRS launched its online portal; non-filers are now able to provide direct deposit information here

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

Will the IRS Deduct Back-owed Payments from My Economic Impact Payment?

With the exception of outstanding child support obligations, the IRS will not deduct back-owed payments from your Economic Impact Payment.

For more information on Economic Impact Payments, we encourage you to visit the IRS’s webpage at

https://www.irs.gov/coronavirus/economic-impact-payments

COVID-19 Relief for Individuals, Businesses and Tax-Exempt Organizations

For those who wonder if they qualify for Coronavirus paid sick leave, we invite you to read an excellent article written on March 24, 2020 by Geoff Williams of the U.S. News & World Report. The information he provides is accurate and easy to digest. You can find this article at

http://www.msn.com/en-us/money/careersandeducation/do-you-qualify-for-coronavirus-paid-sick-leave/ar-BB11ENoA?srcref=rss .

**Full credit for this article is given to its author Geoff Williams and the U.S. News & World Report.

For our business and tax-exempt clients, you may be eligible for COVID-19 relief. There are currently two new employer credits – the Credit for Sick and Family Leave and the Employee Retention Credit. We invite you to visit the IRS’s website for more information on these credits at https://www.irs.gov/coronavirus/new-employer-tax-credits .

The U.S. Dept. of the Treasury also offers assistance through the new Paycheck Protection Program. Additional information on this program can be found at

https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses

with a program outline shown at https://home.treasury.gov/system/files/136/PPP%20--%20Overview.pdf

Stay safe and be well!

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