Federal Tax

Federal Tax

 

Tax Day for Individuals Extended to May 17, 2021:

Treasury, IRS Extend Filing and Payment Deadline

WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days. Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17, 2021.

Third Stimulus Check Information

The third round of Economic Impact Payments (EIP3) will be based on the taxpayer’s latest processed tax return from either 2020 or 2019.

This includes anyone who successfully registered online at IRS.gov using the agency’s Non-Filers tool last year, or alternatively, submitted a special simplified tax return to the IRS. If the IRS has received and processed a taxpayer’s 2020 return, the agency will instead make the calculation based on that return.

In addition, the IRS will automatically send EIP3 to people who didn’t file a return but receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Affairs benefits. This is similar to the first and second rounds of Economic Impact Payments, often referred to as EIP1 and EIP2.

For those who received EIP1 or EIP2 but don’t receive a payment via direct deposit, they will generally receive a check or, in some instances, a prepaid debit card (referred to as an “EIP Card). A payment will not be added to an existing EIP card mailed for the first or second round of stimulus payments.

Under the new law, an EIP3 cannot be offset to pay various past-due federal debts or back taxes.

The IRS reminds taxpayers that the income levels in this new round of stimulus payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly.) The reduced payments end at $80,000 for individuals ($160,000); people above these levels are ineligible for a payment. More information is available on IRS.gov.

New payments differ from earlier Economic Impact Payments

The third round of stimulus payments, those authorized by the 2021 American Rescue Plan Act, differs from the earlier payments in several respects:

  • The third stimulus payment will be larger for most people. Most families will get $1,400 per person, including all dependents claimed on their tax return. Typically, this means a single person with no dependents will get $1,400, while a family of four (married couple with two dependents) will get $5,600.
  • Unlike the first two payments, the third stimulus payment is not restricted to children under 17. Eligible families will get a payment based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents and grandparents.

Additional information is available on IRS.gov

 

How to Get Help

Legal Aid Society of San Diego welcomes walk-ins.  For faster service call 1-877-LEGAL AID (1-877-534-2524).
TTY 1-800-735-2929​
If you wish to come to an office, we have 3 locations:
Southeast San Diego Office
Midtown San Diego Office
North County San Diego Office

What We Do

The Low Income Taxpayer Clinic (Tax Clinic) can help individuals and their unincorporated businesses with the following kinds of problems:

  • I filed my tax return, but did not get my refund.  For instance, if you filed a tax return and claimed certain deductions or credits, such as the EITC, and the IRS has not paid you your refund, contact the Tax Clinic to see if we can help.
  • I have been told that my tax return is being audited: The IRS has told you that they are looking at your income tax return or have told you that they plan on changing your tax return, increasing the tax you owe, or reducing your refund.
  • I have not filed past years tax returns: The Tax Clinic does not prepare tax returns. However, we may be able to assist you with the preparation of a return if it helps you to resolve a probable dispute with the IRS that will happen when you file.  For instance, if you have not filed tax returns for one or more years because of what you think the IRS will do, and need some help filing them and paying any tax that might be owed or getting any refund you are entitled to, then we may be able to help.
  • I owe taxes: You have been getting bills from the IRS and want help in finding out what your options are for paying the taxes. Or, after you get a tax return prepared and filed you owe tax, we can counsel you as to your options for paying that tax.
  • I want to petition the Tax Court, I have filed a Tax Court petition, or I am scheduled for a trial at the Tax Court: If you want to file a petition with the United States Tax Court or you have filed a petition, we may be able represent you before the Tax Court.  If you have a date of trial, contact the Tax Clinic immediately to see if we can help.
  • I overpaid my taxes and want to get a refund. You want to sue to get back federal taxes you paid but you now wish to dispute. We can represent you before the IRS and the United States District Court in a refund action.
  • If we are helping you with your IRS tax problem, we can then help you with any related California tax problems.

Walk In Clinic

Subject to eligibility, a walk-in tax clinic is available at the San Diego County Law Library from 12:30 to 3:00 pm on the last Wednesday of every month.  Services are given on a first come first served basis.

Assistance for Related Problems

While we do not help people prepare and file returns, we can usually connect you to a free organization to help you.  During the regular tax filing season, we can direct you to a volunteer income tax assistance (VITA) site.

The local Taxpayer Advocate Service (949-389-4804)  is an independent IRS office that assists taxpayers with their IRS issues.  Taxpayer Advocate Service

If your only tax problem is with the State of California, you may contact the University of San Diego School of Law State Income Tax and State Sales and Use tax Clinics at 619-260-7470.
 
If you are dealing with the IRS, you should know your rights, and the standards they are held to: Taxpayer Advocate Service - Taxpayer Bill of Rights Brochure

Self Help Forms

Many times, the IRS will want your current financial information in order to assist you. They will ask you to use this form, IRS 433-F the Collection Information Statement.

Common Tax Problems

Social Security:

  • If a single tax payer is receiving social security income, do they have to file a return?

Answer:

  • Generally, if social security benefits were your only income, your benefits are not taxable. Taxpayers who receive little or no income in addition to their Social Security Benefits would typically not need to file a tax return.
  • If you received income from other sources, your benefits may or may not be taxed depending on the source and amount of the income used in a calculation the IRS will make to see what part of your income is taxable.  If this is your situation you should speak with a tax advisor.

Retirement:

Exceptions to the 10% penalty on early distributions from retirement

                 Generally, there is a 10 percent additional tax on early distributions from qualified retirement plans.  However, the additional tax does not apply to the following situations:

1.  Medical Expenses

2   Payments under a qualified domestic relations order

3.  Distributions to unemployed individuals for health insurance premiums

4.  Distributions for higher education expenses

5.  Distributions for first home purchases

6. Distributions when called to active duty

Videos

This video explains what will happen in an audit.  It is far more accurate than the scare ads you hear or see on radio and TV.

Links to Youtube TAS videos starring Nina Olsen -- Consumer Tax Tips: IRS Audits - YouTube

What to do for your appointment

When you come to our office, make sure to bring:
  • tax returns you filed or had prepared for year(s) in issue, including your most current return.
  • Copies of your most recent pay stubs or documents that show your current yearly income.
  • All correspondence to and from the IRS and Tax Court.
  • Any documents you think relate to your case.

How to Get Information and Training

We can provide general information and training on specific tax issues or problems to community organizations or groups.  We have a special service to provide tax information and training to ESL taxpayers and organizations that work with ESL taxpayers.  If you would like to request a presentation or traininig please click here.

Get Involved

Contact Shahin Rahimi for opportunities to volunteer your time and expertise. We can also always use accountants, lawyers, CPAs and other professionals who are interested in making a difference in their community and lending their expertise.  Click here.