Tag: benefits

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How COVID-19 Stimulus Payments will Affect Your 2020 Tax Return

Many taxpayers who received stimulus payments in 2020 wonder how it will be treated when the time comes to file their 2020 tax returns, whether they got the correct amount, or why they did not get it in the first place.

Economic Impact Payments or stimulus payments received in 2020 and early 2021 are not taxable income. Keep notices 1444-B you received regarding your stimulus payments with your 2020 tax records, you will need to provide them to your tax preparer. If you did not keep (or have lost) the notices, you will need to request an Account Transcript for 2020 either online through your IRS “Get Transcripts” account or via phone for mail delivery. It may take several weeks to get transcripts in the mail nowadays, however, your tax preparer can help you obtain transcripts much faster.

Anyone who did not receive stimulus payment(s) or their payment was not the correct amount due to reduced income in 2020, a change in marital filing status, or a change in the number of dependents – including those who are not normally required to file a federal tax return – will need to claim it as a recovery rebate credit on their 2020 federal income tax return. Remember, if you can be claimed as a dependent on someone’s return, you are not eligible for stimulus checks or rebate credit, even if you were not claimed as a dependent.

You may be eligible for a recovery rebate credit if you did not receive a second stimulus payment, and you and your spouse file jointly and only one spouse has a valid SSN. Such couples with a non-immigrant status spouse who has an ITIN or no tax ID, were not eligible for the first round of stimulus payments.

You do not need to complete information about the recovery rebate credit on your 2020 federal tax return if you received the maximum amount of benefits as follows:

  • $1,200 plus $500 for each qualifying child you had in 2020 for the first round and $600 for you and $600 for each qualifying child for the second round, or
  • $2,400 for joint filers in 2020 plus $500 for each qualifying child you had in 2020 for the first round and $1,200 plus $600 for each qualifying child for the second round.

     

    If you received a stimulus payment greater than the recovery rebate credit calculated on the 2020 return (due to increased income in 2020, for example), in most cases you still get to keep the original payment. The excess does not need to be repaid to the IRS. Exceptions include death of the taxpayer or a spouse before receipt of the payment, and nonresident alien status in 2020.

    If you did not receive stimulus payments and instead claim recovery rebate credit on your 2020 tax return, and owe money to the IRS, this credit will first offset your 2020 tax liability, and the remainder, if any, will be applied to your prior tax debt. You will not receive a refund, even though economic impact payments were protected from garnishment and federal and state offset programs.

    If you are not sure how to calculate a recovery rebate credit, find a professional tax preparer to help you out.

    Irina Bobrova is an Enrolled Agent who represents taxpayers before the IRS to resolve their IRS problems.

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Consider the Greek way

Growing up, I often heard my mom, aunt, and older sister talk about the times they spent in their sororities. All the philanthropic events, sisterhood programs, formal and semi-formal dances: There was never a dull moment.

Between the countless leadership experiences available and lifelong friendships, why not consider joining a fraternity or sorority organization? When I started my freshman year of college, I knew I wanted to attend a university that had sorority organizations.

When I first joined my sorority, people around me would always tell me how the organization was not just four years, but it was for life. Now, a year after graduating, I can proudly say they were right.

With all the unfamiliarity that comes with starting college, having an instant connection with individuals like yourself makes the transition alot easier.

Together, you and your sorority and fraternity pledge class will learn the ins and outs of navigating college together while experiencing many firsts.

Greek life can provide many benefits for members, but a primary advantage of being in a sorority or fraternity in college is having a place to call home.

Being miles away from home, it was nice to have a support system through the good times and the bad. For example, if I did well on a test, I knew I had sisters ready to go celebrate. If I did not perform at my best, I had sisters to bring ice cream over and make me feel better.

No matter if you are in a sorority or fraternity, both organizations offer a diverse group of individuals ranging in ages 18-22.

For example, some people were religious, some people were atheists, and some people were in the organization to amp up their social lives. It really depends on the individual.

The two most popular benefits these organizations provide are
professional and social connections.

1987 University of Florida Alumna, Corinne Rosner, believes that being a sorority alumna is a great way to build up a network of professional and personal connections.

“I have had friends for life who have stood by me through it all. Even people with whom I did not stay in contact, when I ran into them/saw them we had an immediate connection and affiliation because of the sorority,” Corinne said.

According to writer Neil Kokemuller from SeattlePi, a local Seattle Newspaper, a sorority or fraternity is a social community where students engage in bonding and fun activities.

“This provides a supportive, homelike environment which helps ease
the transition into school and allows for growth and independence
during school,” Kokemuller said.

1984 Davidson College alumnae, Andy Rock, believes that being in a
fraternity opened up the world for him socially.

“Being in a fraternity allowed me to get to know interesting people from different places, and through them, we got to know the places. I felt like I was being supported through my brothers and the connections we made through the years,” Rock said.

Corinne agrees. “No matter where the person went to school or the year they went, we still have this connection,” She said.

Not only does being in a Greek organization help you socially or professionally, but it allows individuals to stay up to date with the world around them.

“It has enabled me to be in contact with people from the community and resources that otherwise I would not know about,” Rock said.

In my three and half years of being in a sorority, I never thought that it would leave such an impact on my life. Not only was I given multiple leadership experiences and memories for a lifetime, but I have made numerous connections to help me in my graduate and adult life today.

Even though I am miles away from my friends and now working on another degree, I have wonderful memories I hold so dearly.

For families deciding on college choices or if you should be a part of the Greek community at your school, think about all the added benefits and experiences coming your way.

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Medicare plan change window opens October 15

Each year in late September, every Medicare recipient should receive an Annual Notice of Change (ANOC) in the mail, which summarizes their current Medicare Advantage or Part D drug plan changes that will go into effect on Jan. 1st of the following year. Medicare Open Enrollment (Oct. 15th through Dec. 7th) is the period in which you may make changes to your current Medicare plan or your Medicare Drug plan.

Recipients should take the following steps to see if their current plan is still appropriate:

  • Check your prescription drugs to make sure they are still covered. If not, you may need to change to a plan that will reduce the cost of your drugs.
  • Since contracts can change during the year, you will need to ensure your doctors and hospitals are still in the plan; if they are no longer in the plan, you will need to go out of your network to see your usual doctor and this will probably cost more money than you want to spend. If you are currently on an HMO Advantage plan, you might need to change plans so your primary care doctor remains covered.
  •  Medicare Open Enrollment is the time to join a Medicare drug plan because if you select a plan outside of this period, you may encounter a late enrollment penalty; if you wait for future years, coverage will probably be more expensive.

Have you checked the following plan changes to see if they benefit you?

  • Plans sometimes add value items, such as gym memberships, over the counter allowances, meal delivery, and acupuncture.
  • Drug plans also make changes to which pharmacies are included as well as changes to tier coverage, deductibles, co-pays, and sometimes they will no longer cover the cost of a specific drug. Not knowing this information can save or cost you a lot of money. Also, if you went into the coverage gap last year, you need to see if changing plans can help you save money.
  • Some plans are more useful for issues that might be important to you. Aetna, for example, has a generous hearing aid allowance compared to other plans, but co-pays may be higher. And if you have money coming out of your Social Security for Medicare payments, those could be waived depending on the amount you receive from Social Security.

The best way to make sure you’re getting the most out of Medicare is to visit a broker who is familiar with all the plans. There is no charge.

Reneé Gorden is an insurance broker and the founder of Health Choice America in Boca Raton.

By Reneé Gordon

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