You can use high-deductible health plans (HDHPs) to pay for 2019 Novel Coronavirus (COVID-19)-related testing and treatment, without jeopardizing their status and you may continue to contribute to a health savings account (HSA).

Health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met. Furthermore, as in the past, any vaccination costs continue to count as preventive care and can be paid for by an HDHP.

Finally, the CARES Act signed into law in late March of 2020, amended legislation to allow HDHPs to cover telehealth and other remote care services without charging a deductible.

Please note that this information relates only to HSA-eligible HDHPs. Employees and other taxpayers in any other type of health plan with specific questions about their plan and what it covers should contact their plan administrator.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, the stimulus bill that was signed into law on March 27, 2020, contains legislation to stabilize the economy during the coronavirus pandemic. These measures include economic recovery checks for taxpayers, as well as several other tax provisions affecting individuals.

Let’s take a look at a few of the highlights:

Economic Impact Payments

Economic impact payments “recovery checks” will be sent to taxpayers in the next three weeks and will be available throughout the rest of 2020. For most people, they will be distributed automatically and no action is required. Taxpayers might have questions about economic impact payments and answers to some of these questions are provided below.

1. Who is eligible?

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.

2. Where will the IRS send my payment?

Most 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.

If the IRS does not have direct deposit information. The Get My Payment tool on IRS.gov allows taxpayers to check the status of their recovery payment. It also allows them to provide banking information once their return has been processed so that individuals can receive payments immediately as opposed to checks in the mail. Please note, however, that the Get My Payment tool does not allow people to change bank account information already on file with the IRS.

3. What if I have not filed my 2018 or 2019 tax returns yet?

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 and include direct deposit banking information on the return.

If you typically are not required to file a tax return. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019. Each person would receive $1,200 per person, without the additional amount for any dependents at this time and includes senior citizens, Social Security recipients (including Social Security Disability Insurance (SSDI) recipients) and railroad retirees who are not otherwise required to file a tax return.

• Social Security, Railroad retirees and SSDI who have qualifying children will need to take an additional step to receive $500 per qualifying child.
• Other individuals such as low-income workers and certain veterans and individuals with disabilities who aren’t required to file a tax return are also eligible for an Economic Impact Payment, but in some cases, may need to file a tax return.

Early Withdrawals from Retirement Plans

Taxpayers affected by the coronavirus are able to withdraw up to $100,000 and will not be subject to the 10 percent penalty for early withdrawals. Distributions can be taken through December 31, 2020. The amount withdrawn is considered income, however, and taxpayers have three years to pay the tax on the additional income and replace the funds in-kind. If you need to withdraw funds from a retirement plan, please call a tax and accounting professional to discuss how it could impact your financial situation.

Eligible taxpayer. Anyone who has been diagnosed with SARS-CoV-2 virus or COVID-19 disease or whose spouse or dependent has been diagnosed with the same. In addition, any taxpayer experiencing financial hardship from any of the following situations:

• Quarantined
• Furloughed
• Laid off
• Work hours reduced
• Unable to work due to lack of child care

Required Minimum Distributions (RMDs)

Required minimum distributions are suspended for tax year 2020.

Charitable Deductions

For tax year 2020, there is now an above-the-line charitable deduction of up to $300. In addition, the limitation on adjusted gross income (AGI) for charitable contributions (2020 tax year only) increases to 100 percent of AGI for individuals. Food contribution limits also increase to a maximum of 25 percent.

Questions?

Don’t hesitate to call and speak to a tax and accounting professional today.

Relief for taxpayers facing the challenges of COVID-19-related tax issues is now available through the IRS People First initiative. The projected start date will be April 1 and the effort will initially run through July 15, 2020. During this period, to the maximum extent possible, in-person contact will be avoided; however, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations.

Some of the highlights affecting taxpayers include:

Installment Agreements

Existing Installment Agreements. For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020, are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Deposit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, during this period, Installment Agreements will not be defaulted on. By law, interest will continue to accrue on any unpaid balances.

New Installment Agreements. Taxpayers unable to fully pay their federal taxes can resolve outstanding liabilities by entering into a monthly payment agreement with the IRS. Please contact the office if you need assistance with this.

Offers in Compromise (OIC)

Several steps are available to assist taxpayers in various stages of the OIC process:

• Pending OIC applications – Taxpayers have until July 15, 2020 to provide requested additional information to support a pending OIC. In addition, any pending OIC request before July 15, 2020, will not be closed without the taxpayer’s consent.
• OIC Payments – Taxpayers have the option of suspending all payments on accepted OICs until July 15, 2020, although by law interest will continue to accrue on any unpaid balances.
• Delinquent Return Filings – The IRS will not default an OIC for those taxpayers who are delinquent in filing their tax return for tax year 2018. However, taxpayers should file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.
• New OIC Applications – Taxpayers facing a liability that exceeds their net worth can resolve outstanding tax liabilities through “Fresh Start.” Don’t hesitate to call if you have questions about this.

Non-Filers

If you have not filed a return for tax years before 2019, it is in your best interest to file any delinquent returns as you may be owed a refund. More than 1 million households that haven’t filed tax returns during the last three years are actually owed refunds and there is still time to claim these refunds. Once delinquent returns have been filed, anyone with a tax liability should consider taking the opportunity to resolve any outstanding liabilities by entering into an Installment Agreement or an Offer in Compromise with the IRS to obtain a “Fresh Start.” Please call if you need help filing delinquent tax returns.

Field, Office, and Correspondence Audits

During this period, generally, no new field, office and correspondence examinations will be started and the IRS will continue to work refunding claims where possible. New examinations may be started, however, where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations.

In-Person Meetings. In-person meetings regarding current field, office, and correspondence examinations will be suspended. Even though IRS examiners will not hold in-person meetings, they will continue their examinations remotely, where possible. Taxpayers are encouraged to respond to any requests for information they already have received – or may receive – on all examination activity during this period if they can do so.

Unique Situations. There may be instances – particularly for some corporate and business taxpayers – where the taxpayers desire to begin an examination while people and records are available and respective staff are available.

General Requests for Information. In addition to compliance activities and examinations, taxpayers are encouraged to respond to any other IRS correspondence requesting additional information during this time if possible.

Help is Just a Phone Call Away

Specific information about the implementation of these provisions is forthcoming; however, if you have any questions or if any of these situations affect you, please call.

Accounting Service : As a business owner in New Jersey, you know how hard it is to start your brand. What’s even harder is to prevent it from falling. What’s more? 75-80% of start-ups in the States fail within the first year of their inauguration. This is not a joke; due to several factors, many start-ups and brands just fail to make an impact. 

One such reason is the lack of proper financial management. You see many times; new entrepreneurs do not take the initiative to hire a business startup services New Jersey. Rather, they take it upon themselves to handle the finances of their company and this isn’t always such a smart idea.

Now, we aren’t saying that brand owners aren’t capable of monitoring and handling finances. However, most of these people are new to managing businesses. Therefore, these entrepreneurs should focus on their business growth and leave the finance handling part to trusted accountants. 

A good accountant has years of experience, work ethics and insight on the right way to handle and monitor finances. As a result, these accountants can prevent a company from spending excess money and channel it towards profitable growth. Want to know other ways in which an accounting firm can help you out.

Let us tell you! We are Thomas Ross Financial Group, one of the best business startup services New Jersey that provide accounting and business valuation services. 

Today, we are here to highlight a few reasons why hiring accounting services can benefit a brand in many ways.

1. Taking the Burden off

Hiring reputed accounting services will mean entrepreneurs have to pay extra money to accountants. This is one of the prime reasons why businesses do not hire entrepreneurs. However, when the CEO’s take the burden of financial management on their plate, they fail to fully focus on their business. 

Therefore, even if the cost of hiring an accountant might seem big, it is better entrepreneurs do so. These accountants are experienced and smart; as a result, when it comes to saving money, these accountants can help the entrepreneur in an invaluable way. 

2. Perfect Future Planning

One of the best reasons to invest in an accounting service is that your accountant will help you with optimal future planning.  

As your accountant collects data and makes financial reports, you can go over these with him/her. These statements and reports will help you plan your future finances optimally and steer your company towards profitable growth. 

3. Get Tax Deductions Timely

Entrepreneurs are on their guard on tax-season. Most are trying their best to save up money during tax deductions. However, most end up waiting till the end of the year to save up, and this is where they mess.

Often when they wait till the end, the opportunity to save up money is gone. However, if these entrepreneurs hire trusted accounting services New Jersey they can solve this issue. Experienced accountants monitor finances all year long. As a result, they know exactly where to hit to save finances.

The reason being these accountants keep track of excessive expenses and depreciation that help them understand a company’s finances. Therefore, based on collected data these accountants help in availing tax deductions timely.

4. Prevent Succumbing to Fraud

One of the biggest threats faced by brands is becoming a victim of fraud. Many times when a brand owner is busy monitoring other aspects of business there can be unscrupulous people at work who secretly deplete the company finances.

This is something an accountant can prevent. How? Well, your accountant is continually monitoring your finances all year long. Therefore, if he witnesses any suspicious activities, he will instantly report it to you. After that, your accountant will make sure to take the steps necessary to protect your finances from unethical frauds.

5. Quick Decision Making

Often business entrepreneurs face a predicament that involves decision making. There are so many choices to pick from and taking a wrong decision means hampering the company finances. This is why entrepreneurs should opt for hiring accounting services New Jersey.  

Skilled accountants are very good at giving financial advice to clients. The reason being they monitor the company finances all year long. So, they know exactly how much a company can profit and what are its shortcomings.  

Therefore, the advice given by accountants is invaluable. Firstly, they will save you money, and secondly, these accountants will prevent you from investing too much in unnecessary things. 

On that note, now that you’re aware of the many perks of hiring reputed accounting services, why don’t you consult us at Thomas Ross Financial Group? We have some of the best accountants in New Jersey who can help your brand reach new heights. We also offer business start-up services and more. So, hurry! Contact us today and let us protect your finances the smart way.