Color of Money
One of the rules for getting a payment is that you can’t be claimed as a dependent. But it’s not just a matter of if you were claimed but “can” you be claimed by your parents, for example. The question turns on whether the person is self-supporting. It’s possible this may be the case for a recent college graduate. But if you are providing more than half of the support for someone 17 and older, that person cannot get a payment under either of the stimulus relief laws from last year. There are provisions for payments of $500 in the first round and $600 in the second round for eligible children under 17, up to a total of $1,100 for a dependent child.
Free File: The IRS has a partnership with the Free File Alliance, a group of tax software providers who have agreed to make their federal taxreturn products available at no cost to taxpayers whose adjusted gross income was $72,000 or less in 2020. In some cases, you may also be able to have your state return filed free, as well. To ensure you are directed to this free service (and not to paid products by the same companies), go to irs.gov/freefile.
Although the start of the tax season is delayed, taxpayers can begin filing returns now through IRS Free File partners, who are accepting tax filings in advance. The returns will be held and then transmitted to the IRS starting Feb. 12.
If you earn too much to qualify for the Free File program, you can still file your returns at no cost via Free File Fillable Forms, which is an electronic version of IRS paper forms. This service will only be available starting Feb. 12.
Identity theft: Some taxpayers have found themselves fighting for their own refunds after identity thieves have filed fraudulent tax returns using stolen personal information. Taxpayers whose identities were used to file fraudulent returns generally are eligible for a special Identity Protection PIN (IP PIN), which is a six-digit code known only to them and the IRS. Starting this year, the IRS said anyone who wants to lock their tax account can request an IP PIN, provided that they can pass a “rigorous identity verification process,” the agency said. If interested, go to IRS.gov/ IPPIN and use the Get an IP PIN tool.
“Electronic returns that do not contain the correct IP PIN will be rejected, and paper returns will go through additional scrutiny for fraud,” said IRS Commissioner Chuck Rettig in a statement about the expansion.
There’s a lot going on this tax season. I’d suggest you bookmark irs. gov and visit the site often for updates on what is likely to be a tax season with a lot of issues.
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