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How to avoid a tax filing rejection if last year’s return is still pending

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The IRS is backlogged and still sifting through tens of millions of pending returns, including many of last year’s filings. If your 2020 return is part of the pileup, there’s a special step for your 2021 electronic filing.

The agency processed more than 61.9 million returns as of March 11, with the majority filed digitally and roughly half self-prepared, the IRS reported.

When you self-prepare electronically, the IRS validates your filing with the previous year’s adjusted gross income. However, there’s a different process for the millions of filers with a pending 2020 return.

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If last year’s return is still in limbo, you’ll need to enter $0 for your 2020 AGI when filing online, said National Taxpayer Advocate Erin Collins in a hearing with the House Ways and Means Oversight Subcommittee.

“That way you can file electronically, and you don’t have to file a paper return,” she said. “We need to get that message out to taxpayers.”

While these directions only apply to digital filers, the agency urges everyone to file electronically with direct deposit to avoid delays.

Nearly 94.3% of individual tax returns were filed electronically during the fiscal year 2020, according to the IRS.

And there are similar instructions for non-filers, who typically include certain Social Security recipients or those with yearly income below the standard deductions.

If you used the non-filer tool in 2021 to collect the advance child tax credit payments or your stimulus check, the IRS says to put $1 for last year’s AGI.  

“I would think hardly anybody knows about that one,” said certified financial planner Larry Harris, director of tax services at Parsec Financial in Asheville, North Carolina.

If you don’t follow these instructions, the IRS may not accept your electronic return, said Tommy Lucas, a CFP and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

“We’ve seen that from individuals trying to file themselves,” he said, explaining how AGI conflicts may trigger a confusing rejection email from their tax-filing software.  

Missing 2020 returns

Your return may also be pending if you received a CP80 notice about a missing 2020 return.

If you got this notice and it still hasn’t been accepted, you should enter $0 for your 2020 AGI when filing this season, said Lucas.

“They’re going to show $0 in their system, so that’s what I would start with,” he said. 

But if the IRS rejects your return with a 2020 AGI of $0, they may have processed last year’s return after sending the notice, Lucas said, meaning you can refile your 2021 return with your actual 2020 AGI.

While it may be difficult to reach the IRS by phone, you can double-check the status of your 2020 tax return by downloading a free IRS transcript from your online account.

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Trump media company subpoenaed in federal criminal probe of SPAC deal

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Former U.S. President Donald Trump gives the keynote address at the Faith & Freedom Coalition during their annual “Road To Majority Policy Conference” at the Gaylord Opryland Resort & Convention Center June 17, 2022 in Nashville, Tennessee.

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Donald Trump’s media company was subpoenaed by a federal grand jury in connection with a criminal probe, according to the company with which the former president’s firm plans to merge.

Digital World Acquisition Corp. said in a filing Friday that Trump Media and Technology Group received a subpoena from the grand jury in Manhattan on Thursday. The Trump company also received a subpoena from the Securities and Exchange Commission regarding a civil probe on Monday, DWAC said.

DWAC also said some current and former TMTG employees have also recently received grand jury subpoenas.

The filing came days after DWAC said the government investigations could delay or even prevent its merger with Trump’s newly formed company, which includes Truth Social, a social media app intended to be an alternative to Twitter.

Neither TMTG nor a spokeswoman for Trump immediately responded to CNBC’s requests for comment.

The Justice Department and the SEC, which regulates the stock market, are investigating the deal between DWAC and Trump Media. By merging with DWAC, which is a kind of shell company called a special purpose acquisition company, or SPAC, Trump’s firm would gain access to potentially billions of dollars on public equities markets.

Trump established Truth Social months after Twitter banned him for his tweets on Jan. 6, 2021, when hundreds of his supporters stormed the U.S. Capitol in a bid to overturn Joe Biden’s victory in the presidential election. Trump Media’s CEO is former Rep. Devin Nunes, one of the former president’s most ardent loyalists in the Republican Party. Trump is also considering whether to run for president in the 2024 election.

Trump has continued to spread the lie that the election was stolen from him. His alleged involvement in the Jan. 6 insurrection is being probed by a House select committee that has accused the former president of being at the center of a multipronged conspiracy to block the peaceful transfer of power to Biden.

Early criticism of the Trump-DWAC deal came from Sen. Elizabeth Warren, D-Mass. In calling for an investigation, she wrote to SEC Chair Gary Gensler in November, telling him that DWAC “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in [SEC] filing and other public statements.”

DWAC shares are far off their highs, closing Friday at $24.20. The stock had surged above $90 in October, after the deal with Trump’s group was announced.

DWAC on Monday revealed in a securities filing that it learned June 16 that each member of its board of directors received subpoenas from the same federal grand jury.

The grand jury sought documents similar to those the SEC already requested as part of its civil probe, DWAC said. The company itself was served with a subpoena a week ago with similar requests, along with other requests relating to communications, individuals and information involving Rocket One Capital.

DWAC also revealed Monday that a board member, Bruce J. Garelick, had told management that he would quit the board during the previous week. Garelick said his resignation “was not the result of any disagreement with Digital World’s operations, policies or practices,” according to the company filing.

— CNBC’s Kevin Breuninger and Thomas Franck contributed to this story.

This is breaking news. Please check back for updates.

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Walmart is working on a response to the Supreme Court’s abortion decision, CEO says in memo

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Walmart CEO Doug McMillon speaks at the CNBC Evolve conference November 19th in Los Angeles.

Jesse Grant | CNBC

Walmart CEO Doug McMillon told employees on Friday that the company is weighing how to respond to a Supreme Court decision that ended the federal right to an abortion.

“We are working thoughtfully and diligently to figure out the best path forward, guided by our desire to support our associates, all of our associates,” he said in a memo sent to employees on Friday. “We will share details on our actions as soon as possible, recognizing that time is of the essence.”

He did not say what changes the company is considering, such as if it may cover travel expenses for workers who must travel to another state where abortion is available.

The memo was previously reported by The Wall Street Journal.

Arkansas, home to Walmart’s headquarters, is one of several states with severe limits or bans on abortions that went into affect after the high court’s ruling.

Walmart is also the country’s largest private employer. It has about 1.6 million employees across the country, including many who live and work in states across the Sunbelt with abortion restrictions such as Texas, Oklahoma and Florida.

Since the Supreme Court reversed Roe v. Wade, companies across the country have had a mix of reactions. Some, including JPMorgan Chase, Dick’s Sporting Goods and Target, have announced new plans to cover employee travel to other states for abortions. Others, such as Kroger and Apple, said they already cover travel for medical treatments and reproductive health care. And still others have remained quiet.

Amazon, the second-largest private employer in the country, said in May that it would pay up to $4,000 in travel expenses each year for non-life-threatening medical treatments, including abortions.

Walmart already covers employee travel for some medical procedures, such as certain heart surgeries, cancer treatments and organ transplants.

Walmart health benefits cover only some abortions. According to the company’s employee handbook, charges for “procedures, services, drugs and supplies related to abortions or termination of pregnancy are not covered, except when the health of the mother would be in danger if the fetus were carried to term, the fetus could not survive the birthing process, or death would be imminent after birth.”

Plan B, an over-the-counter form of contraception, is covered only if the person gets a prescription. The pill, often called the “morning after pill,” works by preventing ovulation or preventing a fertilized egg from attaching to the womb. It can be taken after unprotected sex or when contraception fails.

Other forms of contraception are also covered with a prescription, including birth control pills, injections and intrauterine devices, or IUDs. Some anti-abortion activists also oppose IUDs because they can stop a fertilized egg from implanting in the uterus.

In Friday’s memo, McMillon said Walmart has gathered input from employees as it decides what to do. He also alluded to the size and diversity of both the company and its customer base.

“We know our associates and customers hold a variety of views on the issue, and this is a sensitive topic about which many of us feel strongly,” he said. “We want you to know that we see you, all of you. No matter what your position on this topic is, we want you to feel respected, valued and supported.”

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FCC authorizes SpaceX to provide mobile Starlink internet service to boats, planes and trucks

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The Starlink logo is seen in the background of a silhouetted woman holding a mobile phone.

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The Federal Communications Commission authorized SpaceX to provide Starlink satellite internet to vehicles in motion, a key step for Elon Musk’s company to further expand the service.

“Authorizing a new class of [customer] terminals for SpaceX’s satellite system will expand the range of broadband capabilities to meet the growing user demands that now require connectivity while on the move, whether driving an RV across the country, moving a freighter from Europe to a U.S. port, or while on a domestic or international flight,” FCC international bureau chief Tom Sullivan wrote in the authorization posted Thursday.

SpaceX did not immediately respond to CNBC’s request for comment on the FCC decision.

Starlink is SpaceX’s network of satellites in low Earth orbit, designed to deliver high-speed internet anywhere on the globe. SpaceX has launched about 2,700 satellites to support the global network, with the base price of the service costing users $110 a month. As of May, SpaceX told the FCC that Starlink had more than 400,000 subscribers.

SpaceX has signed early deals with commercial air carriers in preparation for this decision: It has pacts with Hawaiian Airlines and semi-private charter provider JSX to provide Wi-Fi on planes. Up until now SpaceX has been approved to conduct a limited amount of inflight testing, seeing the aviation Wi-Fi market as “ripe for an overhaul.”

The FCC’s authorization also includes connecting to ships and vehicles like semi-trucks and RVs, with SpaceX having last year requested to expand from servicing stationary customers. SpaceX had already deployed a version of its service called “Starlink for RVs,” with an additional “portability” fee. But portability is not the same as mobility, which the FCC’s decision now allows.

The FCC imposed conditions on in-motion Starlink service. SpaceX is required to “accept any interference received from both current and future services authorized,” and further investment in Starlink will “assume the risk that operations may be subject to additional conditions or requirements” from the FCC.

The ruling did not resolve a broader SpaceX regulatory dispute with Dish Network and RS Access, an entity backed by billionaire Michael Dell, over the use of 12-gigahertz band – a range of frequency used for broadband communications. The FCC continues to analyze whether the band can support both ground-based and space-based services, with SpaceX pushing for the regulator to make a ruling.

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