IRS stimulus payments

Mike Sylvester • April 2, 2020

March 30 th , 2020

This email was added to our website as a blog post on 4/1/2020.

This is the first of three long emails.  These three emails will go out this week.  These emails are being sent out due to the emergency legislation, and you must understand the new rules are not even written yet.  Patience is going to be necessary with us, with the banks, and with all of the government agencies involved.  There is no chance this money will get into people’s hands as soon as The Trump Administration is claiming.  It is impossible, and that is what every expert is saying.

Please read this email entirely before contacting us with questions about stimulus payments.  If you have questions about unemployment and emergency loans, please hold all of those questions until we understand the rules.

The long emails that will come out from us are:

This is the first one, and it will discuss the stimulus checks.  The IRS will be mailing stimulus checks to many taxpayers.  Roughly 75% of our clients will receive stimulus checks.

The second one covers unemployment, and we will try to get this email out by Wednesday of this week.  Congress is ordering the states to expand unemployment benefits massively, and these benefits will flow to many people who were not previously eligible, and the amounts paid will, in many cases, exceed the amount of money workers are paid via their usual jobs.

The third one covers emergency loans, and we will try to get this email out Friday of this week.  Large amounts of loans will be available to small businesses; in some cases, these loans will be forgiven and be considered a free grant.

Before we get to each of these items, we want to remind you of several issues:

Our office hours are 2 PM – 6 PM Monday – Friday only.  Only one set of clients is allowed in the office at a time, and if you are sick or have had a fever in the last three days, please do not come into the office for the safety of our employees.

We are open and want you to drop off income tax returns and other work in our 24-hour dropbox; mail them to us, email them to us, or send them to us via our secure portals.

Five of us are primarily working from home.  A lot is going on, and we ask for your patience; we will not be able to get back to you as quickly as we usually do.  We nowhave to field hundreds of questions about this new legislation, and we will be assisting many people with emergency loan packages.  1 st quarter payroll taxes are due at the end of April, and tangible business personal property tax returns are due May 15 th .    The best way to contact us is to email the person you usually deal with.  The second-best way to reach us is to call us in the office and leave that person a voice mail.  We will get back to you within 3 or 4 business days; however, it will take longer than usual.

These laws are new, and Congress, The Small Business Administration, The Department of Labor, Banks, The Internal Revenue Service, The Indiana Department of Workforce Development, SBS CPA Group, and many other agencies and organizations are still trying to understand the 2,000 pages of legislation and please remember the Government is issuing clarifications and procedures every day.  Everyone has to be patient with not only us but all of the aforementioned agencies.  This is unprecedented legislation and will take longer for the Government to enact and implement than they are claiming it will.

The Government is promising payments, unemployment benefits, and loans; all of these items will take longer to get into the hands of taxpayers than they are saying.

The IRS is mailing stimulus checks to many Americans

First off, the Federal government is claiming they will send checks or directly deposit these payments, and their goal is to have this done around April 17 th , 2020.  Based on past experience, this seems very unlikely, and we expect the stimulus payments will be sent in late April or more likely early May 2020.  They will likely be transmitted over a 2-3 week period based on last name.

The IRS will use your 2019 income tax returns if they are filed already, and they will use your 2018 income tax returns otherwise.   If you are on Social Security and not required to file a Federal income tax return, you will receive a stimulus payment and need not file a 2018 or 2019 income tax return.

This is a refundable tax credit that will be reconciled on your 2020 income tax returns filed in 2021.  If the IRS overpays you, there will be no adverse consequences; you will not have to pay it back.  If the IRS underpays you, the additional amount you are owed will be handled on your 2020 income tax returns filed in 2021.

If the IRS has direct deposit information on file for you, they will use it; otherwise, they will mail you a check.  If you have changed bank accounts, your direct deposit will not go through, and the IRS will send you a check.

The tax credit phases out based on income:  Roughly speaking, 6% of Americans will not get any stimulus payment because their income is too high.   Another 6% will get a reduced stimulus payment.

The rebates are based on Federal adjusted gross income.  This is line 7 of your 2018 1040 or line 8b of your 2019 1040 or 2019 1040-SR.  This is your adjusted gross income before most deductions.

How much you will receive is as listed below:

Filing Status                            AGI Amount               Stimulus Check Amount

Single                                      $75,000 or less            $1,200

Married filing jointly              $150,000 or less          $2,400

Head of Household                 $112,500 or less          $1,200

Dependents Under 17             N/A                             $500, paid to your legal guardian

The additional $500 per child is not well defined by the IRS yet, and questions regarding this will need to wait until the IRS establishes rules in the next 7-10 days.  If you claim your children as dependents on your income tax return, they do not qualify for their own stimulus payment because they are your dependent.  Further, the way the law is written, the children have to be sixteen years old or younger for their parents to receive an extra $500 payment.  It is currently unclear how this will be handled if the IRS uses a 2018 return or even a 2019 return.  If your child is 16 or under at the end of 2020, it is certain they will qualify for the additional $500 stimulus payment.   It is also unclear how the IRS will handle this for children whose parents are divorced.  It currently looks like parents will not phase-out of the additional $500 for their children who qualify for the $500 payment.

There are phase-outs for higher-income taxpayers.  If you are single and your AGI is $99,000 or higher, you completely phase out of your stimulus payment and get nothing.  If you are Head of Household and your AGI is $135,000 or higher you completely phase out of your stimulus payment and get nothing.   If you are married and file a joint return and your AGI is $198,000 or more you completely phase out and get nothing.

If you are Married Filing Separately the law currently does not address this situation and the IRS will issue further guidance down the road.

Just like the stimulus payments in 2008, this is going to be a mess for the IRS to deal with.  What the IRS is currently saying is:

They will let the public know when the payments are to be sent.  As mentioned earlier we feel the payments will come out in late April or early May; however, the Trump Administration is claiming the payments will go out sooner.

They are not accepting any questions from the public or tax practitioners regarding the payments.  They are telling the public to be patient.

The IRS is saying in May or June they will send out letters discussing the stimulus payments to each taxpayer and after you get that letter you can contact the IRS to get more information and they will tell you how to do so.

The IRS has made it clear that they are going to focus on getting as many of the stimulus payments sent as they can and then deal with questions and problems later.  Unfortunately, if you do not get your stimulus payment when you expect to you will have to be patient and wait until you get a letter from the IRS and wait until they issue further guidance.

There are already scams trying to convince tax payers to make various payments in order to get their stimulus checks.  These are scams.

This email was long in an effort to ensure you understand what your stimulus payment will be.

Two more emails will follow later this week.

SBS CPA Group

Mike Sylvester, CPA

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SBS CPA Group is Hiring a Senior Staff Accountant

By Mike Sylvester • September 16, 2025
SBS CPA Group is hiring and looking for a great Senior Staff Accountant! Our full-time employees work 1904 hours per year. Our employees work significantly less than is typical at public accounting firms. We allow a hybrid work schedule after initial training is complete. Our pay is in the top 25%; our benefits are in the top 25%. We are looking to hire someone with a four-year degree who is a CPA or CPA eligible. The more experience the better! Experience preparing a wide variety of income tax returns is a must. The ability to use technology is a must. Please reach out to Mike Sylvester at Mike@SBSCPAGroup.com with your resume! Mike Sylvester, CPA

SBS Staffing Changes

By Mike Sylvester • September 11, 2025
Nathan Skinner, one of our four Senior Staff Accountants, is moving back home to Dayton, Ohio. Nathan has been with us for four years since he graduated college in 2021. We wish Nathan success in all of his future endeavors, and we will miss him greatly! His entire family is in Dayton, and we think this move will be great for his family. Nathan's last day at SBS will be either September 18 th or 19 th . If you normally work with Nathan, you will get an email from us letting you know who you will be working with moving forward! If you need something before you get the email; please call Nikkie Reyes at 260-407-5000 and she will connect you to the right person!  SBS CPA Group is hiring, and we will be posting our job opening on Indeed and on our company blog in the next few days. If you know someone looking for a great job in public accounting in Fort Wayne, Indiana, please reach out to Mike Sylvester at Mike@sbscpagroup.com!

New Gambling Loss Rules

By Mike Sylvester • August 27, 2025
The gambling rules for tax year 2026 have changed due to the new tax bill. One Big Beautiful Bill Act (OBBB), was signed into law on July 4, 2025 by President Trump. These changes will affect both casual gamblers and professionals beginning in the 2026 tax year. Those who gamble should understand the new rules. The Old Rule (Through 2025) Historically, the IRS has allowed taxpayers to deduct gambling losses—but only to the extent of their gambling winnings. If you won $10,000 but lost $15,000, you could deduct $10,000 in losses, effectively zeroing out your taxable gambling income. The New Rule (Starting 2026) Beginning with the 2026 tax year, gambling losses will be deductible at only 90% of the amount of winnings. While this may sound like a minor adjustment, the impact is significant. Example: You win $100,000 and lose $100,000 during the year. Under the old rule: You would report $100,000 of income and deduct $100,000 of losses, resulting in zero taxable gambling income. Under the new rule: You can deduct only $90,000 of those losses on your federal income tax returns. That means you’ll still be taxed on $10,000 of “phantom income,” even though you truly broke even. This rule applies to all gamblers, whether you buy the occasional lottery ticket or operate as a professional gambler. How Itemized Deductions Work It’s important to understand that gambling losses are deductible only if you itemize deductions on your tax return. Here’s what that means: Standard vs. Itemized Deduction Every taxpayer can take the standard deduction—a fixed amount based on filing status. For 2025, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. Alternatively, you can choose to itemize deductions if the total of your eligible deductions (mortgage interest, charitable contributions, state and local taxes, medical expenses, and gambling losses, among others) is higher than the standard deduction. Where Gambling Losses Appear Gambling losses are reported on Schedule A, Itemized Deductions, not directly against gambling winnings. You must report all gambling winnings in full as income. Losses are deducted separately on Schedule A, up to the allowable limit (100% through 2025, 90% starting in 2026). Recordkeeping Requirements To claim these deductions, you must keep meticulous records—receipts, tickets, player’s club statements, and a diary of gambling activity. Without proper documentation, the IRS may disallow your deduction even if you had genuine losses. Why It Matters The IRS projects that this change will raise more than $1 billion in revenue over the next decade, but it comes at the expense of fairness. Many taxpayers will now find themselves paying tax on income they never actually earned. Professional gamblers, in particular, may feel the heaviest impact, as their livelihoods often involve large swings of wins and losses. Additionally, because gambling losses are only deductible for those who itemize, some taxpayers may find that the standard deduction provides a bigger benefit—even if it means their gambling losses go unused. This makes strategic planning even more important. Planning Ahead For 2025, the old rules remain in effect. If gambling is part of your financial life, I strongly recommend:  Evaluating whether itemizing makes sense in your situation. Keeping meticulous records of all winnings and losses. Budgeting for higher tax liability in 2026 and beyond, even if you expect to break even. Consulting with a tax professional to explore potential strategies for minimizing the impact. At SBS CPA Group, we’re here to help clients navigate these changes with confidence. If you’d like to review your individual situation and discuss strategies for 2025 and beyond, please reach out to your CPA and we’d be glad to assist. Mike Sylvester, CPA

Energy Tax Credits

By Mike Sylvester • August 27, 2025
Valuable tax credits are expiring at the end of this year. Our clients have claimed hundreds of thousands of dollars of federal energy tax credits the last few years! The One Big Beautiful Bill that passed in July changed the expiration date for the Residential Clean Energy Credit and the Energy Efficient Home Improvement Credit to December 31, 2025. Originally designed to expire in 2032, these credits can lead to substantial tax savings. To meet the Residential Clean Energy Credit requirements, you must install one of the following items in your main home or second home. The home can be new or existing. Homes you rent out do not qualify, but renters who improve the property do qualify. The credit is 30% of the expenditure, including labor. The item must be brand new; used items do not count. -Geothermal Heat Pumps -Wind Turbines -Solar Electric Panels -Solar Water Heaters -Fuel Cells (credit limited by the amount of kilowatt hours and only for main homes) -Battery Storage Systems (with equal to or greater than three kilowatt hours) You can claim all of these in the same year if you qualify for them. There are no limits on the amount of credit you can claim, except for Fuel Cells as noted above. To qualify under the Energy Efficient Home Improvement Credit rules, you would need to install one or more of the following items in a house that you live in that already exists. New homes do not qualify and neither do rental houses. The amount of the credit is 30% of the expense, with maximum limits listed below: -Exterior Doors (up to $250 per door, $500 total; must be main home; cannot include labor costs; for homeowners only-not renters) -Certified Home Energy Audit (up to $150; must be main home; for homeowners only-not renters) -Exterior Windows and Skylights (up to $600; must be main home; cannot include labor costs; for homeowners only-not renters) -Insulation and Air Sealing Materials (up to $1,200; must be main home; cannot include labor costs; for homeowners only-not renters) -Central Air Conditioners (up to $600; can be main or second home; you can include labor costs; homeowners or renters can claim) -Natural Gas, Propane, or Oil Water Heaters (up to $600; can be main or second home; you can include labor costs; homeowners or renters can claim) - Natural Gas, Propane, or Oil Furnaces and Hot Water Boilers (up to $600; can be main or second home; you can include labor costs; homeowners or renters can claim) -Electric Panel Upgrade (up to $600; can be main or second home; you can include labor costs; homeowners or renters can claim) --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -Electric or natural gas heat pumps (up to $2,000; can be main or second home; you can include labor costs; homeowners or renters can claim) -Electric or natural gas heat pump water heaters (up to $2,000; can be main or second home; you can include labor costs; homeowners or renters can claim) -Biomass stoves and boilers (up to $2,000; can be main or second home; you can include labor costs; homeowners or renters can claim) The maximum credit per year is $3,200. You can claim up to $1,200 for anything above the line and $2,000 for anything below the line. Also, new for 2025, it must be from a qualified manufacturer with a PIN or QM Code. (Insulation and Air Sealing Materials are exempt from needing a PIN.) As you can see, the credits can provide substantial savings for you at tax time. You can claim both credits on the same tax return and they do not affect each other’s limits. All items for either credit must meet certain standards-just calling themselves energy efficient is not sufficient. Installation of the improvement needs to occur on or before December 31, 2025-simply ordering it or prepaying for it does not count. Both credits are nonrefundable, which means if the credits are bigger than your tax liability, you will not receive the excess as a refund. In the case of the Residential Clean Energy Credit, any unused credit will carry forward to use in future years. The Energy Efficient Home Improvement Credit does not carry forward. If you have already installed energy efficient improvements this year, make sure to let your tax preparer know. If you still plan to install energy efficient improvements, you may want to consult your tax advisor before making your purchase to make sure you maximize your tax savings.  Mike Sylvester, CPA

Clean Vehicle Credit

By Mike Sylvester • August 26, 2025
If you have been planning to buy a clean vehicle, you will want to act soon. Right now, there are tax credits for both individuals and businesses that can make buying an electric vehicle more enticing. However, the One Big Beautiful Bill will end these tax credits as of September 30, 2025! What is a clean vehicle? The IRS says that a clean vehicle is one that gets plugged in (aka an electric vehicle) or a fuel cell electric vehicle. Currently, if you buy a new clean vehicle for personal use, it can qualify you for the Clean Vehicle Credit. If you purchase a new car, the credit can be up to $7,500. Certain used electric vehicles can earn you a credit of up to $4,000. Tax credits are a dollar-for-dollar savings on your tax bill, so these are substantial savings! To qualify for the credit, the vehicle must meet several guidelines. To see if your vehicle qualifies, you can go to fueleconomy.gov. Also, the following income thresholds must be met: For new vehicles: -Modified AGI in the year of delivery (or the year before delivery) is no more than: -$150,000 if single, -$225,000 if head of household, -$300,000 if married filing jointly -Vehicle cost no more than -$55,000 if a sedan, -$80,000 if a SUV, pickup, or van For used vehicles: -Modified AGI is no more than: -$75,000 if single, -$112,500 if head of household, -$150,000 if married filing jointly -Vehicle cost no more than $25,000 In the case of businesses and tax-exempt organizations, the Commercial Electric Vehicle Credit allows a credit up to $7,500 for vehicles under 14,000 pounds and up to $40,000 for vehicles weighing 14,000 pounds or more. There are no income limits or price caps for businesses to qualify, but there are several eligibility requirements that must be met. You can go to fueleconomy.gov to see if your vehicle qualifies. Before taking these credits, you must make sure you did not get a point-of-sale rebate. Instead of waiting to get the tax credit when you file your taxes, you could have taken the option to take the credit at the time you purchased the vehicle which would have reduced the price you paid for the vehicle. You cannot have both a tax credit and a point-of-sale rebate for the same vehicle. Remember, these credits end September 30 th , 2025 so you must purchase and take delivery of your vehicle by then. Ensure you fill out your tax planner correctly so we can ensure you get these tax credits on your 2025 income tax returns.  Mike Sylvester, CPA

The Tax Professional Industry Is Shrinking

By Mike Sylvester • July 31, 2025
The Tax Professional Industry Is Shrinking The number of Certified Public Accountants in the United States is shrinking, and this trend is only expected to continue—and likely get worse. Three hundred fifty thousand more people have left the accounting industry than have joined it since 2020, and this has been caused by: 75% of CPAs are at or nearing retirement age Fewer people are taking and passing the CPA exam Further, many employees are leaving because they do not like the insane hours and want to focus on improving their quality of life. In our area, one or two firms close each and every year. A lot of firms are consolidating and becoming larger. The total number of firms in our area is half of what it was back in 2008. This is expected to continue. Things are very difficult in our industry, and 530 different potential new clients called our firm last year—and we spent nothing on advertising. Realize we have a total of 950 clients today. Considering we do not advertise, this honestly tells you everything you need to know about our industry. A majority of CPA firms today are not taking on any new clients because they are full—or, more likely, overfull. The three most common reasons why new clients contact us are: Prior CPA retired or died Prior firm got bought out and they dislike the new firm They cannot get questions answered We are still taking on new clients; however, we are being choosy who we onboard. Our firm is fortunate. The average age of the ten people at our firm is 41 years old. Compared to other CPA firms, that is extremely young. We already have four CPAs. We have two employees who we expect will be CPAs within the next year and another who will be an Enrolled Agent. It is a great time to be a CPA! We look forward to working with you for many years! Mike Sylvester, CPA

The Internal Revenue Service is in Trouble

By Mike Sylvester • July 30, 2025
The Internal Revenue Service will lose 25% of its total workforce in early and mid-2025. Many in Congress want to cut the IRS workforce even more next year. The IRS was already struggling to do its job before so many people were let go. For example: The Fort Wayne office was closed, along with many other offices around the country. The phone system is terrible. It is hard to get an agent on the phone, and disconnections are very common. They are issuing a record number of notices to taxpayers. Most of the notices are wrong. Worse, they have removed much of the information that used to be listed on the notices. This makes it much harder to deal with those notices and requires us to call them more and write them more letters. Their computer systems are, in some cases, 40 years old and slowly failing. The IRS has to deal with the newly passed tax laws, which are extremely complicated and will require many new forms and instructions. We have several clients who have had to wait well over a year for items to be resolved, and we expect that to get worse. The IRS has its fifth Commissioner already this year, and the current Commissioner is completely unqualified for the job. The Indiana Department of Revenue (INDOR) is also declining; however, it is more functional than the IRS. INDOR is issuing more notices and has removed a lot of information from their notices as well. INDOR’s budget has been cut by 5% this year and another 5% the following year. It looks as if they will not be allowed to hire anyone for 27 months. Further, the IRS and INDOR both have an aging workforce, and a large number of employees will retire over the next few years. The taxing agencies are getting harder to deal with, and we expect the IRS will be very difficult to deal with. All of this will be difficult for both you and our firm to deal with it. That being said, we are developing a plan to deal with it!  Mike Sylvester, CPA

One Big Beautiful Bill

By Mike Sylvester • July 29, 2025
Congress passed and President Trump signed into law major changes to the federal income tax code. These changes are very complicated and provide tax planning opportunities. Most of these changes are beneficial to taxpayers. Please ensure you read our email newsletters as we will be discussing many of the major provisions over the next few months. The changes are very complicated and: Some only affect certain years Most of them phase out at specified income levels Some require new forms Many require guidance from the IRS to be issued We will attend a large amount of training on these new provisions and do not expect much of the IRS guidance to be available until October 2025. Karena, Brent, and I can be hired to provide tax planning and help you minimize your income taxes. Please reach out to us in October of 2025.  Mike Sylvester, CPA

Why You’re Getting More Tax Notices

By Mike Sylvester • June 25, 2025
Summer has arrived in Fort Wayne, Indiana. Both the Internal Revenue Service and The Indiana Department of Revenue are sending more incorrect tax notices. Worse both have changed their notices to provide little, or any information, forcing us to reach out to them and talk to them to find out what their notice means. Both agencies are struggling due to budget cuts. We expect this to get worse over the next couple of years. We are happy to help you with tax notices; however, they currently take a long time to resolve, and we charge separately for resolving tax notices. The Internal Revenue Service is in complete disarray due to DOGE cuts and some reports show that the IRS may only answer 16% of phone calls they receive next tax season. Further, we are seeing it take the IRS years in some cases to respond to notices, and it now often takes them 6 to 12 months to process amended returns, old year returns, and returns for those who are deceased.  The tax agencies are much harder to deal with than they were five years ago; and we expect this to get worse due to budget cuts.

TaxDome Implementation

By Mike Sylvester • June 25, 2025
SBS CPA Group implemented TaxDome this year. Our clients really like the easy-to-use portal, and more than half of our clients are using this platform. We expect that number to grow significantly. We like TaxDome and have received great feedback from our clients. A copy of your tax returns is in TaxDome. You can retrieve them yourself any time. If you need help please reach out to Nikkie Reyes at Admin@sbscpagroup.com or call her at 260-407-5000 and she can help you retrieve a copy of your tax returns from TaxDome or, if needed, she can get them to you in another way. If you have not opted into TaxDome, please opt in. Just email Nikkie or call her and she will help you opt in. If you are married and file a joint return both of you need to opt into TaxDome. Opting into TaxDome is not required for current clients next year. We really like TaxDome, and you will too. Please give it a chance. Mike Sylvester, CPA