There are countless worries that the coronavirus crisis has brought upon Americans across the country. Learning how to teach, work, and maintain normalcy while under one roof during quarantine comes with a wide range of new challenges. Even more troublesome than social distancing, however, is the economic impact that COVID-19 has brought about. Within a matter of weeks, businesses across the globe have closed their doors, millions of Americans have lost their jobs, and the stock market has plummeted. Despite the stimulus packages that the U.S. CARES Act provided, it will be some time before the economy is revitalized to the state it was before the coronavirus pandemic.

For Americans worried about protecting their finances during uncertain times, there are steps to take, even during quarantine, to safeguard your financial future. If you’re feeling anxious about your finances, apply these steps to alleviate future financial concerns.

Create or Update Your Budget

Even if you have an existing budget, now is an opportune time to assess your spending habits. If your income has been cut back due to COVID-19-related shutdowns, adjust your allotted spending appropriately. Saving at every opportunity will help make ends meet if money is tight in the future.

If you have time, consider making a budget specifically for quarantine to ensure your spending doesn’t exceed your means. While many households are spending more on at-home entertainment and delivery services, it’s still possible to save when eating out, traveling, and other sources of spending are unavailable.

Build an Emergency Fund

After planning a new budget, you may discover prior spending habits that can be reduced to fund emergency savings. If you’ve been setting money aside for travel or non-essential splurging, consider allocating some or all of that balance for an emergency fund instead. Every little bit that you save now to support you and your family during uncertain economic times could be a blessing in the future.

File Your Tax Return If You Haven’t Yet Done So

Tax season was extended in light of the COVID-19 crisis, pushing Tax Day back to July 15. If you haven’t yet filed your 2019 taxes, be sure to file as soon as possible to avoid penalties. If you receive a tax refund, opting for a direct deposit will allow you to receive it as quickly as possible. Consider stashing as much of your tax refund as possible to your emergency fund to protect your future finances better.

Pay Off Any High-Interest Debt

If you have any high-interest debt, like a personal loan, and your income has remained steady during quarantine and business shutdowns, consider paying off that debt now rather than later. While you may feel a slight financial squeeze in the months that follow, this can save hundreds, sometimes thousands, of dollars of interest in the long run.

Should your income change in the future, making minimum monthly payments may not be possible. If you can’t make regular payments, the interest will continue to accumulate along with late fees. Avoid these financial headaches by paying down that debt as much as possible while you’re able to. Even if you can’t pay it off in full, a decreased balance can significantly help you.

Explore Insurance Discounts & Options

Many insurance companies are offering lower rates since the national quarantining measures began. Many auto insurance companies are offering discounted rates, as fewer people are on the road. If you haven’t received an automatic discount, call your insurance companies directly to learn if you’re eligible for discounts or a lower rate. You may find even lower prices with different providers, so take your time to do competitive research.

If possible, consider purchasing a new insurance policy now. Long-term care or life insurance can take months to be approved, depending on the provider. Starting no while you have space in your schedule to research and compare can make the process feel less tense overall.

Schedule a Free Consultation with a Dedicated Tax Debt Attorney in Orange, CA

While having debt of any kind can be stressful on a person’s budget, tax debt involving the IRS or the state can be especially challenging. If you’re trying to handle tax debt by yourself and receiving intimidating letters from the IRS or state, do not delay hiring experienced legal counsel to help you through this difficult time.

Morgan Sebastian Law, PC, is a tax debt law firm in Orange, California, advocating for taxpayers before the IRS in all 50 states. Attorney Becky Rose Sebastian has vast experience negotiating with federal and state tax agencies to help her clients with the best tax resolution possible. To schedule a free consultation and speak with Becky about your tax issue, call (877) 223-6605 today or complete a contact form.

Through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, American taxpayers continue to benefit from stimulus checks mailed or deposited into their bank accounts. This monetary relief is meant to thwart the economic implications of the COVID-19 crisis, as many Americans lost their jobs and income sources.

The IRS considers Americans’ wages earned in 2019 or 2018 to determine eligibility. Those

who made an adjusted gross income of $99,000 or less receive the full amount of the stimulus check at $1,200. Those who are married and filed jointly receive the full amount of $2,400, as long as their adjusted gross income did not exceed $198,000. For each dependent under the age of 17, Americans receive an additional $500 per child.

Determining whether you’re eligible to receive a stimulus check seems straightforward enough, but specific circumstances convolute determining the final amount. If you’re wondering whether the IRS or a private company can seize your economic stimulus check, consider the following points.

The IRS May Seize Your Stimulus Check on These Grounds

There are generally very few reasons that the IRS or private company may seize or garnish your stimulus check. Grounds that would grant the IRS permission to confiscate your check include if you owe back child support or have significant debt in collections. The following provides further details on reasons the IRS may seize your stimulus check:

You're Behind in Child Support

You may not see money from your stimulus payment if you’re in the Treasury Offset Program

because of unpaid child support. If you’re past due on child support payments, the IRS will

intercept and offset your stimulus check payment.

You Must Pay a Debt in Collections

Debt collectors may garnish money from your bank account if you have an outstanding debt. Private companies may also garnish your funds if you have a court judgment against you. If you have debt in collections, it’s worth exploring possible workarounds, such as requesting a paper check instead of direct deposit.

You Owe Your Bank Fees

If your bank account is overdrawn and you request a direct deposit for your stimulus check,

nothing prevents the bank from taking out the amount necessary to put your account back in good standing. Whether it’s overdraft fees, monthly maintenance fees, or anything else that puts your account in the red, these bank fees will be deducted from your payment.

The IRS Will Not Seize Your Stimulus Check for These Reasons

The stimulus payment is meant to help Americans financially through these unprecedented

times. Very few grounds, like the ones mentioned previously, will permit the IRS to seize your check. The IRS will not take your stimulus payment for any of the following reasons:

You Owe Taxes to the IRS

The IRS will not seize or offset your stimulus check if you owe taxes to the United States

government. Keep in mind that if you do have tax debt from income made in 2019, the deadline was pushed back to July 15. Taxpayers in California who owe state taxes also have until July 15 to make the payment.

Your Child Turns 17 in 2020

The $500 you receive for your child dependent in 2019 will remain in your bank account, even if it is his or her 17th birthday in 2020. At the same time, if you have a baby in 2020, you should be able to claim that $500 when you file your taxes for 2020.

Your Student Loans Are in Default

Student borrowers have no need to worry if their loans have defaulted. The IRS will not seize

stimulus checks as repayments on student loan obligations. Moreover, the CARES Act supports federal student loan borrowers by pausing payments until September 30.

Contact an Experienced Tax Debt Attorney in Orange, California

There is often a considerable amount of confusion regarding taxes and laws the state and IRS must follow. If you’re facing tax debt or have questions concerning problems with the IRS or state, you could greatly benefit from contacting an experienced tax debt attorney.

Morgan Sebastian Law, PC, is a tax debt law firm in Orange, California, advocating for taxpayers before the IRS in all 50 states. Attorney Becky Rose Sebastian has vast experience negotiating with federal and state tax agencies to help her clients with the best tax resolution possible. To schedule a free consultation and speak with Becky about your tax issue, call (877) 223-6605 today or complete a contact form.

Due to the COVID-19 crisis, the IRS pushed back the deadline for filing taxes to July 15 so that Americans struggling to keep their lives in order could have more time to prepare them. Most states, including California, did the same, pushing back the state tax deadline to the same date, and some even later.

Compared to previous years, IRS audits are noticeably down. In the fiscal year 2019, the IRS audited an estimated 0.5% of individual tax returns. In 2010, almost double that rate of tax returns was scrutinized in an IRS audit. Despite audit rates currently being low, people make mistakes when filing their taxes that often result in a review or a delayed return. To avoid this stressful ordeal, residents in Orange, California, take head and learn from these top 10 mistakes people make when filing their taxes.

What Are the Most Frequent Tax Filing Mistakes in California?

According to the IRS website, there are several common errors tax filers make each year during tax season. These errors vary in complexity from simple oversights to significant miscalculations. Some of these mistakes might appear easy to prevent, but they occur frequently enough to warrant a mention by the IRS.

These are the most common tax filing mistakes:

1. Failing to Make a Copy of Signed Tax Returns

Many types of loans, including mortgages and student loans, require copies of signed tax returns and other past tax information. Failing to keep a signed copy of a previous tax return delays the loan process and becomes costly, acquiring necessary copies. While the IRS can send copies of the prior year’s signed tax returns, each one costs $50. Having copies of your signed tax returns will also be helpful in the event of an audit.

2. Providing Incorrect Routing and Bank Account Numbers

This may be one of the more obvious mistakes, but inputting the incorrect bank account information happens reasonably often. When taxpayers don’t provide the correct routing and bank account numbers, the IRS may not be able to issue your tax refund through direct deposit, and your return could be delayed for months. If you owe the IRS, they can’t get paid with a faulty bank account number, so you may face penalties down the road.

3. Sending Your Tax Return to the Wrong IRS Office

Multiple IRS addresses serve different regions in the U.S., along with different kinds of tax documents. That can be confusing for many taxpayers, as this is a commonly-made mistake every year. If you accidentally mail your tax return to the incorrect office, your refund will likely be delayed.

4. Arranging Tax Documents Erroneously

Tax documents must be arranged in a particular order. Something as simple as unsuccessfully preparing documents out of order can result in a delayed refund. Make sure to keep the exact order and use the sequence numbers when submitting tax return documents.

5. Failing to Include All W-2 Forms

No matter how many jobs a person has each year, the IRS requires a W-2 that documents wages to be submitted for each employer. Taxpayers must provide all wages and withholdings combined from each form and report the total on tax returns each year. Failure to report wages and income can result in an audit.

6. Incorrectly Calculating Credits and Deductions

Taxpayers can reduce their taxable income with tax deductions, such as charitable donations. Tax credits, on the other hand, decreases the amount of taxes owed. Failing to calculate these correctly can result in overpaying or paying too little to the IRS.

7. Failing to Declare Exemptions Accurately

There are certain tax benefits from spousal and dependence exceptions that the IRS grants taxpayers in the U.S. However, to receive these benefits, you must provide exact information that details both you and your spouse's gross income amounts and date of birth. To receive benefits for dependents, you must report your relationship to the dependent along with how much financial support you provided.

8. Selecting the Wrong Filing Status

To file your tax return, you must choose a filing status used to establish specified requirements, credit eligibility, and deductions. American taxpayers have five statuses to choose from that include:

  • Single

  • Married filing jointly

  • Married filing separately

  • Head of household

  • Qualifying widow(er) with dependent child or children

9. Failing to List All Dependents Properly

To claim dependents on your tax return, you must list all names and taxpayer identification numbers for each one. When using social security numbers, all names must be spelled exactly the same as they appear on the social security card.

10. Neglecting to Sign and Date Return

The IRS will never accept a tax return that's not signed and dated. Neglecting to make this step while filing or failing to have your spouse sign and date if filing jointly will result in your tax return being sent back.

While many of these mistakes can be avoided by filing electronically, some can still occur if you aren't careful. When it comes to filing your taxes, it's critical to take your time if filing on your own to avoid these mistakes or seek the help of an accountant to avoid any tax audit or delay.

Experienced Tax Debt Lawyer in Orange, California

Receiving anything in the mail from the IRS is never a pleasant experience. If you're getting intimidating letters from the IRS concerning unsettled tax debt or other issues, don't delay in seeking legal counsel from an accomplished legal firm experienced in tax debt, like Morgan & Sebastian Law, PC. To schedule a free consultation with an experienced tax debt lawyer today, call (877) 223-6605 or complete a contact form.

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