Be ready for new laws
and new forms!
A copy of our annual newsletter is below.
See what credits and deductions were extended back to 01/01/2018 and/or carry through to 12/31/2020.
Use our newly updated checklists to help you organize your information.
Call us with your questions about tax law changes or withholding adjustments.
Important Info for 2020
HAPPY HOLIDAY SEASON!
First and foremost, we hope you are all enjoying a happy and safe holiday season! It is time again to look ahead to the new year and the new tax season. Let's talk about some things that might be of interest to you.
W-4's/Withholding - The IRS released a new Form W-4 for 2020. It looks completely different from prior years. While you are not required to fill out this new W-4 if you have one on file with your employer already, you may still want to because they are supposed to be more accurate under the current tax laws. You can view and get these new forms by clicking HERE or in person at our office.
Health Insurance - I think many of you will be happy to know that there will be no penalty on 2019 tax returns for lack of health insurance. However, if you DO have health insurance AND you get it from the state health exchange, we are REQUIRED to get your Form 1095-A to do your taxes.
Alimony - Anyone who is paying alimony from a divorce agreement dated 01/01/19 or later will not be able to deduct alimony. Anyone who receives alimony from the agreement will not claim it as income. Agreements dated 12/31/18 or earlier will still fall under the old rules.
Cryptocurrency - Cryptocurrency is a hot button issue with the IRS right now. Please expect us to ask each of you during your drop-off/interview whether or not you have been buying, selling, or otherwise trading cryptocurrency.
Other changes on your 2019 return -
1. The Standard Deduction has increased to $24,400 (married filing jointly) and $12,200 (single). Tax Brackets have also increased for inflation.
2. For those who itemize - the income threshold for deducting medical expenses is now 7.5% of adjusted gross income for all taxpayers. (Corrected from our original newsletter as of the passing of the tax extenders.)
3. Contribution limits for IRA's, 401(k)'s, and HSA's have increased for 2019 and 2020. Contact us if you want help planning for a contribution to one of these accounts.
4. Dependents who are not qualified children as defined by the IRS must have income of less than $4200 in 2019 to qualify as a dependent.
5. There is a new form for the Qualified Business Income Deduction (also known as 199A) that did not exist last year. If you are a business owner, you will see this new form 8995 with your return.
6. For businesses, the deductible rate for business miles is $0.58/mile in 2019, up 3.5 cents from the prior year. (As of the passing of recent legislation, the mileage rate for 2020 is down to $0.575/mile.)
We are still waiting to hear if certain tax deductions and benefits will be passed/extended by the end of December. (They were and more are still pending as of January.) We will keep you updated on our Facebook page and our web site as we learn more.
Important Dates: We will be opening January 13th with our extended hours (see below). You will want to have your paperwork dropped off to us no later than March 31st to guarantee that you will not have to file an extension. Tax season officially ends on Wednesday, April 15th. That means extensions, IRA contributions, HSA contributions, and Quarter 1 estimated payments will also be due April 15th. Our basic checklist will help you get organized. If you need additional checklists, click here.
Our office hours beginning Monday, January 13th will be Monday-Friday 9am to 6pm and Saturday 10am to 4pm. We are looking forward to seeing you again this year!
Tara and Brandy