Recently Published Tax News in Jefferson City and Central MO

Non-filer tool launched by IRS

The IRS recently announced the launch of web sites for non-tax filers to register to receive their economic impact payment and a new Get My Payment tool. Here is what you need to know.

Background

As a response to the coronavirus pandemic, the government is sending $1,200 to single taxpayers with income less than $75,000 ($98,000 with phaseouts). $2,400 is being sent to married taxpayers with income less than $150,000 ($198,000 with phaseouts). An additional $500 is being sent for each child under the age of 17.

The Problem

The payments are being made based on 2019 or 2018 tax returns. If you do not need to file a tax return, you run the risk of not receiving this payment. Additionally, getting payments out to everyone is technically complex. The IRS must look at both 2019 tax returns and 2018 tax returns PLUS they are directed by Congress to match these tax files against two years of Social Security payments for seniors. Not an easy task!

The Solution

The IRS worked to launch a way to register to receive your payment and to determine the status of your payment. You can find the sites here:

For non-filers: Submit information to receive Economic Impact Payment

Payment status and direct deposit registration: There is also an IRS provided Get Your Payment tool to register to receive your payment via direct deposit.

It can be found here: Get My Payment Tool

This tool will also be used to review the status of your payment.

Who should use

If you fall into one of these cases, you need to review whether it makes sense to use these tools.

Not required to file. If you have not filed a tax return in either 2018 or 2019, using this tool or other tax filings is the only way to receive the payment.

College students. If you are not a dependent on someone else’s tax return, you need to look into using the tool. If you are a dependent, It may also be worth a conversation to see if you can or should change your filing status in 2019 in order to receive this payment.

Non-filer. Even if you know you need to file a tax return, but have not yet done so, consider using the non-filer tool. You will still need to file a tax return, but in the meantime, you can receive your payment.

Seniors. Seniors that do not file tax returns in 2018 or 2019 will eventually receive the payment based upon their form 1099-SA or railroad retirement information. The non-filer site asks you not to register, but you may receive the payment sooner AND protect your identity from would be thieves by filing a tax return.

To check on status or speed things up. Want faster payment? Payment not yet received? Use the Get My Payment tool.

The Economic Impact Payments are now officially being sent out, so the sooner you let the IRS know that your payment should be included, the sooner your payment will arrive.

Taxpayers are beginning to receive their $1,200 one-time Economic Impact Payment plus $500 for each dependent under the age of 17.

First round of payments are underway

Payments have begun hitting the checking accounts of taxpayers who included their bank’s routing and account numbers on their 2019 and 2018 tax returns. So now is the time to starting checking your bank account to see if your payment is processed.

IRS launches new simple filing site

For those who have not filed a tax return for 2019, there is an opportunity to receive your stimulus payment a bit more quickly. There is a new simple filing site with a link to a simple filing form. This will provide the IRS with the information necessary to issue your stimulus check via direct deposit. The alternative is waiting up to several months to get your stimulus payment via mail in the form of a physical check.

Who should use the simple tax filing site

Consider using the simple file site to provide direct deposit information in the following situations:

You have not filed a 2018 or 2019 tax return.

You have not yet filed a 2019 tax return.

You are not required to file either a 2018 or 2019 tax return. In this case, you will never receive your stimulus check unless you use this new simple filing form.

A special note for non-filing seniors

The Treasury has directed the IRS to provide payments to seniors based on Form 1099-SSA reporting as well as tax filings. This creates an added level of complexity for the IRS to figure out who to pay and who has already been paid. While they are requesting SSA-1099 recipients without 2018 and 2019 tax returns to hold off filing a simple tax return, you may still wish to do so if you need your payment more quickly. Remember, this filing also protects your Social Security number from being used by identity thieves! Just be prepared to return an extra payment should your tax filing confuse their systems and create a double payment.

Remember, it is going to take some time for the IRS to process all these payments, especially when their data is constantly shifting as people continue to file tax returns, including their new simple filing form.

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Advanced Tax Solutions

There is confusion regarding whether seniors who receive Social Security have to file a simple tax return to get their $1,200 stimulus check. The answer from the U.S. Treasury Department is NO.

So if you received a 1099-SSA or RRTA in 2019 or 2018, the payment will be automatic….eventually.

The problem

The IRS challenge is to send out one-time coronavirus stimulus payments quickly. Using 2018 and 2019 tax-filing information is the easiest way to do this. So if you haven’t had to file a tax return in either 2018 or 2019, you won’t receive a payment. The IRS solution to this problem is to have you file a simple tax return. Unfortunately, the bill and the Treasury Department state that the IRS must also use form 1099-SSA (Social Security Retirement payment) filings by themselves to automatically send payments.

So how does the IRS make sure they do not double pay? This could happen since those seniors who DO file a tax return (and receive a 1099-SSA) will already be paid. The answer? A massive undertaking to match two large databases and identify those that STILL NEED TO BE PAID!

Can you image the cost and delays this is going to present to the IRS?

YOUR solution: File a tax return!

If you want to ensure a speedy payment, file a tax return - even if you do not need to do so. This will effectively solve the IRS system problem for your account. The worst-case scenario is you are paid twice and then you simply return the extra payment.

So consider filing your tax return or helping a senior citizen who does not file taxes, file a simple tax return. Plus there is the added benefit of protecting their IRS tax account from potential identity thieves!

A U.S. Supreme Court ruling involving the state of South Dakota vs Wayfair (an online furniture retailer) opens the door for states to impose sales taxes on online retailers located outside their borders.

This will have wide-reaching effects on small businesses and consumers. Here’s what you need to know:

Who benefits?

State governments. States will be able to collect hundreds of millions of additional tax revenue from purchases made at Amazon, Overstock and other online retailers.

Brick-and-mortar stores. Physical stores that are collecting sales taxes will no longer be at a price disadvantage with online competition that hadn't been.

Who loses?

Online businesses. Not only will online sellers likely have to raise their effective prices to pay the state taxes, they now may have to contend with a complex patchwork of state and local tax jurisdictions.

Consumers. Consumers that had been enjoying lower taxes on online purchases are likely to have to pay more after this ruling.

Small businesses. Trying to keep track of 50 different sets of sales tax rules and complying with this ever-changing rate environment will be difficult.

Some background

The federal standard in place since the 1990s is that states can only impose tax collection on businesses that have a physical presence within their borders. Many states try to get around this by imposing “use taxes” on consumers who make purchases from out-of-state retailers. But use taxes collection is hard to enforce and are widely ignored by taxpayers.

In the recent Supreme Court ruling, South Dakota successfully challenged the physical presence standard in favor of “economic presence,” allowing states to require businesses to collect these taxes even if they are located elsewhere.

The small business dilemma

This ruling may be concerning to small business owners who have customers outside their home state. The risk is that small businesses may now have to register and comply with complex tax filings in all 50 states, and maybe even thousands of local jurisdictions as well. But keep in mind that:

The ruling is based on South Dakota’s simplified tax structure, which collects only at the state level, avoiding the complexity of local tax compliance.

South Dakota has a compliance threshold that exempts small businesses with less than either $100,000 in sales or 200 transactions of products or services delivered into the state.

Further events may follow:

State governments will have to put their collection systems in place, which will take time. Some will first need to pass new laws authorizing the taxation of online transactions using the economic versus physical presence standard.

Congress may feel compelled to act with legislation simplifying the tax jurisdiction of state and local governments.

There’s no doubt the Supreme Court ruling has caused the ground to shift for any businesses selling outside their state, and the total effect of the changes is still unknown. Call if you have any questions about this or other tax matters.

The taxation of alimony will change drastically starting in 2019. Here’s what you need to know:

New rules

Any divorce agreement effective after Dec. 31, 2018 will be subject to new rules for alimony, namely:

Alimony is no longer tax-deductible for the payer.

Alimony is no longer taxed as income for the recipient.

That means that alimony will get much less affordable for those paying it, while those receiving alimony will not have to claim it as income.

What the change means

Because a person paying alimony will no longer have a tax break, he or she may not be able to afford to pay as much. This can affect the amount an ex-spouse will receive. That means tax impacts are going to be even more important part of divorce negotiations.

It also means both alimony and child support will be taxed the same way in agreements signed after 2018 (i.e., neither are tax-deductible for the payer). So if you have children, you'll want to review how payments should be split between the two, depending on whether a divorce agreement is effective this year or later.

Remember, these new tax rules only affect divorce agreements completed in 2019. Agreements made before the end of this year or earlier won’t change. Also be aware that some states require a six-month (or longer) waiting period for couples to either file for divorce, or for a divorce to be finalized.

Helpful tips for handling alimony agreements

Divorce can be unpleasant and traumatic. But if it’s inevitable, you need to do two things:

Consider alternatives to traditional alimony payments. This might include a different asset split, setting up an annuity or other ideas.

Get tax help. Because these coming tax changes are so new and so drastic, taxes are going to be front and center in any negotiations with your spouse.

Finally, for those getting married, it may make financial sense to create a prenuptial agreement laying how alimony would be handled in the event of divorce. Note that some state laws forbid any agreement in which spouses to waive the right to future alimony payments.

Call if you have any questions about alimony or other tax matters.

Mileage Type 2020 -    2021

Business miles 57.5¢ per mile 56¢ per mile

Medical and moving miles*-17¢ -   16¢ per mile Charitable miles 14¢ per mile 14¢ per mile

* Miles deducted as a moving expense are limited to a permanent change of station for military purposes only.

The Federal Reserve announced a Main Street New Loan Facility among several actions aimed at pumping in another $2.3 trillion of financing into U.S. businesses.

Here are the highlights of two lending programs aimed at small businesses:

1. Main Street New Loan Facility (MSNLF)

Eligibility

Businesses with up to 10,000 employees or $2.5 billion in 2019 annual revenues

The business must be created or organized in the United States with a majority of its employees based in the United States

Eligible borrowers that participate in the program may not also participate in the Main Street Expanded Loan Facility lending option (see below)

Lending limit

The minimum loan size is $1 million. The maximum loan size is the lesser of $25 million or a more complicated calculation using several of the business’s financial indicators

Loan payments can be deferred for one year

The loan must be repaid within 4 years

2. Main Street Expanded Loan Facility (MSELF)

The MSELF is essentially the same loan program as the MSNLF except for the maximum amount a business can borrow. Businesses in the MSELF program can borrow up to the lesser of $150 million or a more complicated calculation using several of the business’s financial indicators.

The application process is under development

The Federal Reserve is finalizing details of the program, which will be administered through banks and other lending institutions. Stay in touch with your banker to find out how to apply once the Fed makes the application form available.

Action items:

April 3, 2020. Beginning application date for the new coronavirus business loan program. Sole proprietors and independent contractors can begin applying April 10.

Time is of the essence. If used properly, some or all of these loans can be forgiven (free money?), but demand will be high.

Contact your bank or lending institution ASAP. This loan process is being handled by banks set up to handle SBA loans.

Go to www.sba.org to get details and application information.

Starting Friday, April 3, small businesses in the U.S. can apply for loans through the Small Business Administration (SBA) to help stay afloat during the COVID-19 pandemic.

The Paycheck Protection Program (PPP) provides loans of up to $10 million to qualified small businesses. Better still, some or all of the PPP loans will be forgiven if a business meets certain criteria.

Who Qualifies

If your business was open on or before February 15, 2020 and has 500 or fewer employees or independent contractors for whom the business paid salaries, compensation and payroll taxes, you qualify. Businesses with more than 500 employees are eligible in certain industries. One such example is the hospitality and food sectors that have multiple locations. These companies can have up to 500 employees per physical location.

Good faith certification required

In addition to the aforementioned qualification criteria, in order to participate in the PPP program a business is required to certify the following:

That the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient;

Acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments;

That the business does not have an SBA 7(a) loan pending for the same purpose and duplicative of amounts applied for or received under a covered loan;

During the period beginning on February 15, 2020, and ending on December 31, 2020, the business has not received amounts under the Paycheck Protection Program for the same purpose or duplicative amounts applied for or received under a covered loan.

Attractive loan provisions

This loan has very few strings attached compared to other SBA loans.

No collateral is required.

No personal guarantees are required.

No up-front or back-end loan fees are applied.

If you keep your employees on payroll, some or all of the loan is forgiven.

The forgiven portion of the loan is NOT considered taxable.

For the portion of the loan that is not forgiven, repayment terms are up to 10 years at not more than 4% interest.

Initial loan payments are deferred for a period of six months to one year.

There is no prepayment penalty.

You can borrow up to 2.5 times your average monthly payroll costs, excluding pay over $100,000 to any one person.

How funds are used is important

These loans are meant to help your business stay afloat during the pandemic. In addition to using the funds for payroll you can use them for:

Health care benefits; paid sick, medical or family leave; and insurance premiums;

payments of interest on any mortgage obligation;

rent;

utilities and

interest on any other debt obligations that were incurred before the covered period.

Loan forgiveness is the key

What makes this loan unique is that if you keep your employees hired, some or all of the loan will be forgiven. There are many parts to the calculation of the forgiveness, but the primary two are employee retention and at least 75% of the forgiven loan amount must be used for payroll.

But even if you lay off employees, there are clauses that allow you to rehire those employees.

Check with the source!

The rules and application of the rules is rapidly changing. So check with your bank and visit Small Business Administration paycheck program for more up-to-date information.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act recently signed into law provides a one-time payment, among other items, to individuals to help ease the economic strain caused by the coronavirus epidemic.

Here are the details of the stimulus payment initiative.

WHO QUALIFIES TO RECEIVE A PAYMENT? A one-time payment of $1,200 will be sent to most adults. For every qualifying child under age 17, families will receive an additional $500. Retirees and people on disability are also eligible to receive a payment.

WHEN WILL I GET MY PAYMENT? The IRS hopes to get the first batch of payments out the week of April 6. It may take some time for everyone to get their checks, assuming everything goes as planned.

HOW ARE PAYMENTS BEING MADE? If you included your bank account and routing information on your 2019 tax return, you will receive your stimulus payment via direct deposit. If you haven't filed your 2019 tax return, the IRS will use information from your 2018 tax return. If you did not include your bank account and routing information on either your 2019 or 2018 tax returns, the IRS will allow you to request direct deposit from a screen (under development) from their website. All others will receive their payment via a check in the mail.

Alert! Invalid bank information. If you have not filed your 2019 tax return AND the direct deposit information on your 2018 tax return is no longer valid (i.e. you opened a new bank account), you will need to take action immediately! If you do nothing, the bank deposit will, hopefully, be rejected and you will receive your check in the mail. Expect a delay, however, as it may take several months to receive a check by mail. You can also try calling the IRS to update your information.

WILL I GET THE ENTIRE AMOUNT? As with other government programs, there is an income phaseout. Here are the thresholds:

Single adults with income of $75,000 or less get the full $1,200. The $1,200 payment is reduced by $5 for every $100 in income above $75,000. Full income phaseout is $99,000.

Married couples with income of $150,000 or less get the full amount of $2,400. The payment is reduced by $5 for every $100, making the full payment phased out at $198,000.

Head of Household adults (normally single adults with children or other dependents) will receive the full $1,200 payment if they earn less than $112,500. Reduced amounts will go out to Head of Household adults who earn up to $136,500.

HOW WILL MY INCOME BE CALCULATED? Your 2019 tax return will be used to determine your income for purposes of whether you receive the full amount of the stimulus check and how many qualifying children you have. If you haven’t filed your 2019 tax return, your 2018 tax return will be used.

Alert! Don't use my current situation. It may make sense to get your 2019 tax return in immediately. Figure out if phaseouts using last year's information lowers your payment amount. If so, you may wish to file your 2019 now. So pull out last year's return and take a look!

Senior Alert! Seniors who did not file a tax return in 2018 or 2019 will automatically receive the payment based upon forms 1099-SSA and RRB-1099s. ( An April 1, 2020 U.S. Treasury press release clarifies much confusion on this topic.)

Alert! File a tax return. If you have low income or someone who does not typically file a tax return, you may wish to do so. A simple tax filing is all that is needed to ensure you receive the stimulus payment. Eventually, instructions to do this will be available on www.irs.gov/coronavirus.

ARE THE PAYMENTS TAXABLE? No. These payments are not taxable.

Remember, this is only one of the many relief components in recently passed legislation. There are also unemployment benefits, small business benefits and much more to come.

The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act provides individuals and businesses significant financial relief from the financial strain caused by the coronavirus epidemic.

Here is a snapshot of the unemployment benefits section of the bill and how it affects individuals and businesses.

WHO QUALIFIES TO RECEIVE STATE UNEMPLOYMENT BENEFITS? In addition to full-time workers who are laid off or furloughed, the Act provides individuals who are not already eligible for state and federal unemployment programs, including self-employed individuals and part-time workers, a set amount of unemployment compensation.

HOW MUCH WILL I RECEIVE?There are two different components to the new law’s unemployment benefits:

Each worker will receive unemployment benefits based on the state in which they work, and

In addition to their state unemployment benefits, each worker will receive an additional $600 per week from the federal government.

HOW WILL BENEFITS FOR SELF-EMPLOYED WORKERS BE CALCULATED? Benefits for self-employed workers are calculated based on previous income and are also eligible for up to an additional $600 per week. Part-time workers are also eligible.

HOW LONG WILL THE STATE UNEMPLOYMENT PAYMENTS LAST? The CARES Act provides eligible workers with an additional 13 weeks of unemployment benefits. Most states already provide 26 weeks of benefits, bringing the total number of weeks that someone is eligible for benefits to 39.

HOW LONG WILL THE FEDERAL PAYMENTS OF $600 LAST? The federal payment of $600 per week will continue through July 31, 2020.

HOW DO I APPLY FOR UNEMPLOYMENT BENEFITS? You must apply for unemployment benefits through your state unemployment office. Most state applications can now be filled out online. Workers who normally don't qualify for unemployment benefits, such as self-employed individuals, need to monitor their state's unemployment office website to find out when they can apply, as many states need to update their computer systems to reflect every type of worker who is eligible to collect unemployment benefits under the CARES Act.

What to do NOW!

If you have lost your job, you must file for unemployment with your state as soon as possible. State offices and websites are being slammed, so the sooner you get in the queue the better for you and your loved ones.

The Emergency Coronavirus Relief Act of 2020 has extended through March 31 pandemic-related assistance for both employees and employers. Businesses with fewer than 500 employees can provide employees with paid leave, either for the employee’s own health needs or to care for family members, and be reimbursed the cost of the paid leave through a tax credit.

These benefits are currently available through March 31, 2021.

Here is a summary of the law’s benefits for employees and employers:

Paid sick leave for workers. Employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay ($510 daily limit applies) where the employee can’t work because the employee is quarantined and/or experiencing COVID-19 symptoms and seeking a medical diagnosis.

Paid leave for workers. Employees can receive two weeks (up to 80 hours) of leave at two-thirds of the employee’s pay ($200 daily limit applies) if they need to care for someone in the following situations: The need to care for an individual subject to quarantine, to care for a child whose school is closed or childcare provider is unavailable for reasons related to COVID-19.

Extended leave. In some instances, an employee may receive up to an additional ten weeks of expanded paid family and medical leave at two-thirds the employee’s pay ($12,000 overall twelve week payment limit applies).

Companies will get paid back. Businesses who pay employees the mandatory sick and childcare leave will get reimbursed through a payroll tax credit.

What it means for you

Employees can take the necessary time to recover from being infected with COVID-19, or to care for a loved one, without fear of losing their job or salary.

Employers can help their employees financially while navigating COVID-19 related shutdowns.

What you need to do now

EMPLOYEES. To take advantage of these paid leave provisions, you must provide your employer with documentation in support of your paid sick leave. There is yet no official application that needs to be completed. If you believe that your employer is required to provide paid leave but is not making paid leave available, or for other questions or concerns, you may call the Department of Labor's Wage and Hour Division at 1-866-4US-WAGE or visit www.dol.gov/agencies/whd.

EMPLOYERS. Here is what you need to do:

Keep detailed records - Be prepared to defend your request for federal assistance. Keep good records of who's asked for paid time off because of COVID-19 related circumstances. Ask your employee to provide a doctor's note when appropriate, along with a narrative written by the employee describing who in their family is infected or suspected of being infected with COVID-19 along with symptoms. Make sure the note is dated and relates to an approved reason for leave.

Talk to your payroll provider - Since businesses will be reimbursed through a payroll tax credit, any questions on how to get reimbursed should be directed at your payroll provider.

Post this notice! - Employers MUST post a notice of the Families First labor requirements in a conspicuous place on its premises. Click here to download and print this notice.

E-mail the notice! - An employer may satisfy the posting requirement by e-mailing or direct mailing the notice to employees, or by posting this notice on an employee information internal or external website. If your employees are working from home, this may be the only way to let them know the benefit exists.

Remember that currently these benefits have only been extended through March 31. Stay alert for further updates as another COVID relief package is currently being ironed out in Washington, D.C.

Scammers were very successful last year with a scheme to pry W-2 pay stub data away from employers. The IRS warns that it may be one of several techniques they use again this year.

How the W-2 scam works

Fraudsters simply identify employees with access to company payroll data and pretend to be a fellow employee emailing from an outside address. “Hi, I work in accounting. Do you think you could send me the payroll data on file? I’m traveling today and working on preparing my tax return.”

The IRS said this surprisingly simple tactic worked on more than 200 employers last year and compromised the W-2 information of hundreds of thousands of employees. The stolen data included names, addresses, Social Security numbers, income and withholdings. Scammers then used the data to file returns and claim refunds from the employees' tax withholdings.

If you’re an employee, it’s hard to defend against this kind of scam because the breach happens to your employer. If you file and get an IRS notice that a return has already been filed in your name, you’ll know you’re a victim.

How to minimize your risk

If your refund was nabbed by a scammer, the good news is that the IRS will still eventually send you a replacement refund. The bad news is it can take a very long time – six months to a year or longer – for the IRS to investigate your case.

If that doesn’t sound appealing, know that there are a few things you can do to minimize your risk:

File early. By filing early you close the window of opportunity for scammers.

Request an IRS PIN. This one-time-use number provided by the IRS is entered on your 1040 forms as an added measure of security. Those whose identities have been stolen are automatically placed in the PIN program, but you may also opt-in to it yourself.

Minimize excess withholdings. If you had your withholdings calculated properly during the year, you can minimize the amount available for scammers to steal. Check your withholdings throughout the year using the IRS web tool.

If you have any questions regarding your situation, don't hesitate to call.

The following is an overview of some of the tax proposals discussed or introduced in Congress in January 2021. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Presidential Tax Transparency Act (House of Representatives Bill 347): This bill, introduced Jan. 19, proposes to amend the Internal Revenue Code of 1986 to require the disclosure of tax returns of Presidents and Vice Presidents and certain candidates for President and Vice President, and for other purposes.

Access Technology Affordability Act of 2021 (House of Representatives Bill 431): This bill, introduced Jan. 21, proposes to amend the Internal Revenue Code of 1986 to allow a refundable tax credit against income tax for the purchase of qualified access technology for the blind.

Bicycle Commuter Act of 2021 (House of Representatives Bill 431): This bill, introduced Jan. 21, proposes to amend the Internal Revenue Code of 1986 to modify employer-provided fringe benefits for bicycle commuting.

BUILD Act (House of Representatives Bill 451): This bill, introduced Jan. 25, proposes to amend the Internal Revenue Code of 1986 to increase the national limitation amount for qualified highway or surface freight transfer facility bonds.

Green Bus Tax Credit Act of 2021 (House of Representatives Bill 543): This bill, introduced Jan. 28, proposes to amend the Internal Revenue Code of 1986 to provide for a credit for zero-emission buses.

SALT Deductibility Act (House of Representatives Bill 613): This bill, introduced Jan. 28, proposes to amend the Internal Revenue Code of 1986 to repeal the limitation on the deduction for certain taxes, including State and local property and income taxes.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in February 2021. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Stop Subsidizing Multimillion Dollar Corporate Bonuses Act (Senate Bill 178): This bill, introduced Feb. 2, proposes to amend the Internal Revenue Code of 1986 to expand the denial of deduction for certain excessive employee remuneration, and for other purposes.

Stop Subsidizing Multimillion Dollar Corporate Bonuses Act (House of Representatives Bill 697): This bill, introduced Feb. 2, proposes to amend the Internal Revenue Code of 1986 to expand the denial of deduction for certain excessive employee remuneration, and for other purposes.

EV CHARGE Act of 2021 (House of Representatives Bill 698): This bill, introduced Feb. 2, proposes to amend the Internal Revenue Code of 1986 to modify the alternative fuel refueling property credit.

Retail Revitalization Act of 2021 (House of Representatives Bill 840): This bill, introduced Feb. 4, proposes to amend the Internal Revenue Code of 1986 to modify rules related to rents received by real estate investment trusts from related parties.

GREEN Act of 2021 (House of Representatives Bill 848): This bill, introduced Feb. 4, proposes to amend the Internal Revenue Code of 1986 to provide incentives for renewable energy and energy efficiency, and for other purposes.

Education Freedom Scholarships and Opportunity Act (House of Representatives Bill 889): This bill, introduced Feb. 5, proposes to amend the Internal Revenue Code of 1986 to establish tax credits to encourage individual and corporate taxpayers to contribute to scholarships for elementary and secondary students through eligible scholarship-granting organizations, and for other purposes.

Small Business PPE Tax Credit Act (House of Representatives Bill 885): This bill, introduced Feb. 5, proposes to amend the Internal Revenue Code of 1986 to provide tax credits for personal protective equipment to small businesses, non-profits, independent contractors, veterans' organizations, and farmers, among other entities, in any year in which the President declares a national emergency relating to COVID-19.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in March 2021. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Stop Subsidizing Multimillion Dollar Corporate Bonuses Act (Senate Bill 178): This bill, introduced Feb. 2, proposes to amend the Internal Revenue Code of 1986 to expand the denial of deduction for certain excessive employee remuneration, and for other purposes.

Small Business Emergency Savings Accounts Act of 2021 (House of Representatives Bill 1450): This bill, introduced Mar. 1, proposes to amend the Internal Revenue Code of 1986 to provide emergency savings accounts for small businesses.

Military Spouses Retirement security Act (House of Representatives Bill 1453): This bill, introduced Mar. 1, proposes to amend the Internal Revenue Code of 1986 to allow a credit to small employers with respect to each employee who is a military spouse and eligible to participate in a defined contribution plan of the employer.

Ultra-Millionaire Tax Act of 2021 (House of Representatives Bill 1459): This bill, introduced Mar. 1, proposes to amend the Internal Revenue Code of 1986 to impose a tax on the net value of assets of a taxpayer, and for other purposes.

Universal Giving Pandemic Response and Recovery Act (House of Representatives Bill 1704): This bill, introduced Mar. 9, proposes to amend the Internal Revenue Code of 1986 to modify and extend the deduction for charitable contributions for individuals not itemizing deductions.

American Innovation and Jobs Act (Senate Bill 749): This bill, introduced Mar. 15, proposes to amend the Internal Revenue Code of 1986 to enhance tax benefits for research activities.

End Double Taxation of Successful Consumer Claims Act (Senate Bill 766): This bill, introduced Mar. 16, proposes to amend the Internal Revenue Code of 1986 to allow an above-the-line deduction for attorney fees and costs in connection with consumer claim awards.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in December 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

ACCESS 45Q Act (House of Representatives Bill 8858): This bill, introduced Dec. 3, proposes to amend the Internal Revenue Code of 1986 to extend and allow an elective payment of the tax credit for carbon oxide sequestration.

45Q Carbon Capture, Utilization, and Storage Tax Credit Amendments Act of 2020 (Senate Bill 4966): This bill, introduced Dec. 7, proposes to amend the Internal Revenue Code of 1986 to provide for a 5-year extension of the carbon oxide sequestration credit, and for other purposes

HITS Act (Senate Bill 4955): This bill, introduced Dec. 3, proposes to amend the Internal Revenue Code of 1986 to provide for an election to expense certain qualified sound recording costs otherwise chargeable to capital account.

Coronavirus Assistance for American Families Act (House of Representatives Bill 8893): This bill, introduced Dec. 8, proposes to amend the Internal Revenue Code of 1986 to provide supplementary 2020 recovery rebates to eligible individuals.

E-QUIP Act (House of Representatives Bill 8930): This bill, introduced Dec. 9, proposes to amend the Internal Revenue Code of 1986 to allow 10-year straight line depreciation for energy efficient qualified improvement property, and for other purposes.

Transportation Oriented Development Act of 2020 (House of Representatives Bill 8969): This bill, introduced Dec. 15, proposes to amend the Internal Revenue Code of 1986 to modify the low-income housing credit to incentivize affordable and transit-oriented development, and for other purposes.

Save Jobs During the Pandemic Act of 2020 (House of Representatives Bill 8988): This bill, introduced Dec. 16, proposes to amend the Internal Revenue Code of 1986 to reduce the base erosion minimum tax rate for taxable years ending in 2020.

Encouraging Americans to Save Act (Senate Bill 5035): This bill, introduced Dec. 16, proposes to amend the Internal Revenue Code of 1986 to provide matching payments for retirement savings contributions by certain individuals.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in November 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Home Lead Safety Tax Credit Act of 2020 (Senate Bill 4908): This bill, introduced Nov. 18, proposes to amend the Internal Revenue Code of 1986 to provide a tax credit for taxpayers who remove lead-based hazards.

STAR Act of 2020 (House of Representatives Bill 8787): This bill, introduced Nov. 19, proposes to amend the Internal Revenue Code of 1986 to permit withdrawals from certain retirement plans for repayment of student loan debt, and for other purposes.

Hospitality and Commerce Job Recovery Act of 2020 (House of Representatives Bill 8802): This bill, introduced Nov. 20, proposes to amend the Internal Revenue Code of 1986 to create a refundable tax credit for travel expenditures, and for other purposes.

Retail Revitalization Act of 2020 (House of Representatives Bill 8805): This bill, introduced Nov. 20, proposes to amend the Internal Revenue Code of 1986 to modify rules related to rents received by real estate investment trusts from related parties.

Preserving Charitable Incentives Act (House of Representatives Bill 8817): This bill, introduced Nov. 24, proposes to provide incentives to make charitable contributions of certain inventory.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in October 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Save our Social Security Now Act (House of Representatives Bill 8171): This bill, introduced Sept. 4, proposes to nullify certain executive actions to permit the delayed withholding and deposit of payroll taxes.

Businesses Preparing for a Better Tomorrow Act (House of Representatives Bill 8260): This bill, introduced Sept. 15, proposes to provide a payroll tax credit for best practices training expenses associated with protecting employees from COVID-19.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

Proposed Tax Legislation - September 2020

The following is an overview of some of the tax proposals discussed or introduced in Congress in September 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Save our Social Security Now Act (House of Representatives Bill 8171): This bill, introduced Sept. 4, proposes to nullify certain executive actions to permit the delayed withholding and deposit of payroll taxes.

Support for Workers, Families, and Social Security Act (House of Representatives Bill 8201): This bill, introduced Sept. 11, proposes to provide a temporary employee payroll tax holiday.

Businesses Preparing for a Better Tomorrow Act (House of Representatives Bill 8260): This bill, introduced Sept. 15, proposes to provide a payroll tax credit for best practices training expenses associated with protecting employees from COVID-19.

2020 Disasters Tax Relief Act (Senate Bill 4621): This bill, introduced Sept. 15, proposes to provide tax relief for persons affected by certain 2020 disasters.

No Surprise Bills for New Moms Act (House of Representatives Bill 8330): This bill, introduced Sept. 21, proposes to amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to provide for certain health coverage of newborns.

Coronavirus Unemployment Benefits Tax Relief Act (Senate Bill 4713): This bill, introduced Sept. 24, proposes to amend the Internal Revenue Code of 1986 to exempt a portion of unemployment compensation received during 2020 from income taxes.

End Taxpayer Subsidies for Drug Ads Act (House of Representatives Bill 8399): This bill, introduced Sept. 25, proposes to amend the Internal Revenue Code of 1986 to deny the deduction for advertising and promotional expenses for prescription drugs.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in August 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Military Spouses Retirement Security Act (House of Representatives Bill 7927): This bill, introduced Aug. 4, proposes to amend the Internal Revenue Code of 1986 to allow a credit to small employers with respect to each employee who is a military spouse and eligible to participate in a defined contribution plan of the employer.

MMEDS Act of 2020 (Senate Bill 4467): This bill, introduced Aug. 6, proposes to rescue domestic medical product manufacturing activity by providing incentives in economically distressed areas of the United States and its possessions.

Multi-State Worker Tax Fairness Act of 2020 (House of Representatives Bill 7968): This bill, introduced Aug. 7, proposes to amend title 4 of the United States Code to limit the extent to which States may tax the compensation earned by nonresident telecommuters and other multi-State workers.

Payments for the People Act (House of Representatives Bill 7960): This bill, introduced Aug. 7, proposes To amend the Internal Revenue Code of 1986 to provide direct payments to individuals in response to the coronavirus pandemic, and for other purposes.

School Choice Now Act (House of Representatives Bill 8100): This bill, introduced Aug. 25, proposes to provide for emergency education freedom grants, to amend the Internal Revenue Code of 1986 to establish tax credits to encourage individual and corporate taxpayers to contribute to scholarships for students through eligible scholarship-granting organizations, and for other purposes.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in July 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Senate Bill 4178: This bill, introduced July 2, proposes to provide for a credit against employment taxes for certain workplace safety expenses, and for other purposes.

Senate Bill 4214: This bill, introduced July 20, proposes to provide a payroll tax credit for certain expenses associated with protecting employees from COVID-19.

FRNT LINE Act (Senate Bill 4213): This bill, introduced July 20, proposes to exclude from income and payroll taxes compensation received by front-line employees during the COVID-19 emergency.

American Workers, Families, and Employers Assistance Act (Senate Bill 4318): This bill, introduced July 27, proposes to provide assistance to American workers, families, and employers during the COVID-19 pandemic.

Supporting America's Restaurant Workers Act (Senate Bill 4319): This bill, introduced July 27, proposes to amend the Internal Revenue Code of 1986 to temporarily expand the deduction for business meals provided at a restaurant.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in June 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Small Business PPP Tax Credit Act (House of Representatives Bill 7216): This bill, introduced June 15, proposes to amend the Internal Revenue Code of 1986 to provide a tax credit for personal protective equipment to small businesses, non-profits, independent contractors, veterans' organizations, and farmers, among other entities, in any year in which the President declares a national emergency relating to COVID-19.

Safe Reopening Tax Credit (House of Representatives Bill 7222): This bill, introduced June 15, proposes to amend the Internal Revenue Code of 1986 to provide for a credit against employment taxes for certain virus transmission prevention expenses, and for other purposes.

Community Development in Opportunity Zones Act of 2020 (House of Representatives Bill 7262): This bill, introduced June 18, proposes to amend the Internal Revenue Code of 1986 to allow qualified opportunity funds to invest in community development financial institutions.

Remote and Mobile Worker Relief Act of 2020 (Senate Bill 3995): This bill, introduced June 18, proposes to limit the authority of States or other taxing jurisdictions to tax certain income of employees for employment duties performed in other States or taxing jurisdictions, and for other purposes.

American TRIP Act (Senate Bill 4031): This bill, introduced June 22, proposes to amend the Internal Revenue Code of 1986 to establish a temporary nonrefundable personal tax credit for travel, hospitality, and entertainment expenses, and for other purposes.

Universal Giving Pandemic Response Act (Senate Bill 4032): This bill, introduced June 22, proposes to amend the Internal Revenue Code of 1986 to allow above-the-line deductions for charitable contributions for individuals not itemizing deductions.

Universal Giving Pandemic Response Act (House of Representatives Bill 7324): This bill, introduced June 24, proposes to amend the Internal Revenue Code of 1986 to allow above-the-line deductions for charitable contributions for individuals not itemizing deductions.

Helping Small Businesses Reopen Safely Act of 2020 (House of Representatives Bill 7431): This bill, introduced June 30, proposes to provide a payroll tax credit for personal protective equipment for use by employees and customers.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in May 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Excluding Pandemic Unemployment Compensation from Income Act (House of Representatives Bill 6695): This bill, introduced May 1, proposes to amend the Internal Revenue Code of 1986 to exclude from tax certain payment of Federal pandemic unemployment compensation.

FORWARD Act (Senate Bill 3593): This bill, introduced May 4, proposes to amend the Internal Revenue Code of 1986 to expand and modify the credit for increasing research activities.

Small Business Expense Protection Act of 2020 (Senate Bill 3612): This bill, introduced May 5, proposes to clarify for purposes of the Internal Revenue Code of 1986 that receipt of coronavirus assistance does not affect the tax treatment of ordinary business expenses.

All Dependents Count Act of 2020 (Senate Bill 3652): This bill, introduced May 7, proposes to allow 2020 recovery rebates with respect to qualifying children over the age of 16 and other dependents.

American Space Commerce Act of 2020 (House of Representatives Bill 6783): This bill, introduced May 8, proposes to amend the Internal Revenue Code of 1986 to provide bonus depreciation for certain space launch expenditures.

Protecting the Paycheck Protection Program of 2020 (House of Representatives Bill 6754): This bill, introduced May 8, proposes to provide clarification regarding the tax treatment of expenses paid or incurred with proceeds from Paycheck Protection Program loans.

JOBS Credit Act of 2020 (House of Representatives Bill 6776): This bill, introduced May 8, proposes to provide for improvements related to the employee retention tax credit.

Paycheck Protection Program Improved Coordination Act of 2020 (House of Representatives Bill 6781): This bill, introduced May 8, proposes to provide for improved coordination between the Paycheck Protection Program and the employee retention tax credit.

Protect Vulnerable Students from Surprise Tax Bills Act (House of Representatives Bill 6743): This bill, introduced May 8, proposes to amend the CARES Act to exclude from gross income emergency financial aid grants to students.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in April 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Small Business Investor Tax Parity Act of 2020 (House of Representatives Bill 6458): This bill, introduced April 7, proposes to amend section 199A of the Internal Revenue Code of 1986 to allow the deduction under that section to apply to qualified Business Development Center interest dividends in the same manner as qualified Real Estate Investment Trust dividends.

CHARITY 2022 Act (House of Representatives Bill 6490): This bill, introduced April 10, proposes to amend the Internal Revenue Code of 1986 to allow above-the-line deductions for charitable contributions for individuals not itemizing deductions.

Recovery Rebates Improvement Act (House of Representatives Bill 6485): This bill, introduced April 10, proposes to amend the Internal Revenue Code of 1986 to allow 2020 recovery rebates for individuals filing a joint return if one spouse satisfies the valid identification number requirement.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in March 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

SAFE at Work Act of 2020 (House of Representatives Bill 6219): This bill, introduced March 12, proposes to amend the Internal Revenue Code of 1986 to allow a credit against tax for telework.

Paid Sick Leave Credit Act of 2020 (House of Representatives Bill 6221): This bill, introduced March 12, proposes to allow a tax credit for employers under the Internal Revenue Code of 1986 for certain mandated paid sick leave.

Lower Health Insurance Deductibles Act (Senate Bill 3439): This bill, introduced March 11, proposes to amend the Internal Revenue Code of 1986 to permit high deductible health plans to divide the deductible between medical and drug costs for purposes of qualifying for health savings accounts, and for other purposes.

Save Our Springs Act of 2020 (House of Representatives Bill 6185): This bill, introduced March 10, proposes to amend the Internal Revenue Code of 1986 to impose an excise tax on the extraction of certain water for bottling, and for other purposes.

Tax Relief for Bridge Tolls Act of 2020 (House of Representatives Bill 6122): This bill, introduced March 5, proposes to amend the Internal Revenue Code of 1986 to allow a credit against tax for bridge tolls.

IRS Enhancement and Tax Gap Reduction Act of 2020 (House of Representatives Bill 6076): This bill, introduced March 4, proposes to provide for increased audits, improved technology infrastructure, and increased staff for the Internal Revenue Service for the purpose of reducing the tax gap, and for other purposes.

Special Needs Tax Credit Act (House of Representatives Bill 6048): This bill, introduced March 2, proposes to amend the Internal Revenue Code of 1986 to provide a credit to individuals for legal expenses paid with respect to establishing guardianship of a family member with disabilities.

Improving Child Care for Working Families Act of 2020 (House of Representatives Bill 6047): This bill, introduced March 2, proposes to amend the Internal Revenue Code of 1986 to increase the limitation of the exclusion for dependent care assistance programs.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in February 2020. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

NEST Act of 2020 (House of Representatives Bill 5782): This bill, introduced Feb. 6, proposes to amend the Internal Revenue Code of 1986 to provide for a credit against tax for qualified special law enforcement officers.

SECURE Fix Act of 2020 (House of Representatives Bill 5792): This bill, introduced Feb. 6, proposes to amend the Internal Revenue Code of 1986 to repeal the restrictions on which designated beneficiaries may receive over the life of the beneficiary the required distributions from a defined contribution plan.

To amend the Internal Revenue Code of 1986 to provide for reporting by certain investors with respect to certain medical care providers (House of Representatives Bill 5825): This bill, introduced Feb. 10, proposes to amend the Internal Revenue Code of 1986 to provide for reporting by certain investors with respect to certain specified medical care providers.

Homecare for Seniors Act (Senate Bill 3261): This bill, introduced Feb. 10, proposes to amend the Internal Revenue Code of 1986 to allow qualified distributions from health savings accounts for certain home care expenses.

Increased Transparency in 501(c)(4) Organizations Act of 2020 (House of Representatives Bill 5834): This bill, introduced Feb. 10, proposes to amend the Internal Revenue Code of 1986 to require the disclosure of notifications of intent to operate under Section 501(c)(4) of the Internal Revenue Code.

Investing in Your Family’s Future Act (House of Representatives Bill 5837): This bill, introduced Feb. 10, proposes to amend the Internal Revenue Code of 1986 to permit treatment of child care payments as elective deferrals for purposes of employer matching contributions, and for other purposes.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

Late on Friday December 20th a new 1,770 page bill was signed into law. Deep within the pages of the Setting Every Community Up for Retirement Enhancement Act (SECURE ACT) are a number of retroactive tax law changes to current and expired tax laws. These new law extenders are in place for both 2019 and 2020. Here is what you need to know:

2019 Tax Law Changes

The tuition and fees deduction is available. The above the line deduction for up to $4,000 in qualified tuition and fees that expired is now available once again. You will need to evaluate this tax break versus others like the American Opportunity Credit and the Lifetime Learning Credit.

Mortgage Insurance Premiums as an itemized deduction. If your mortgage bank requires insurance on your loan and the loan qualifies, you may once again deduct this premium as an itemized deduction.

Medical expense deduction threshold stays at 7.5%. Prior rules had the threshold set at 10%. To deduct qualified expenses, your costs need to exceed this amount of your adjusted gross income.

Mortgage forgiveness is not income. If a bank forgives mortgage indebtedness, it is typically income to you. Now qualified principal residence indebtedness that is forgiven may be excluded from income with the reactivation of this tax law.

Disaster area filing extensions. In addition to allowing taxpayers to take penalty-free money out of retirement accounts for 2018 and 2019 in federally declared disaster areas, the new rules create an automatic 60-day filing extension for future declared disaster areas. In the past, the IRS issued these filing extensions on a case-by-case basis.

Old kiddie tax rules now rule. Rollback of kiddie tax rules to use parent's tax table versus the Estate and Trust tax table.

Other developments impact Retirement Account Rules

Many other changes are in the bill that come into play in 2020 and beyond. These include:

Eliminating the contribution age limit when funding traditional IRAs.

Moving the required minimum distribution from age 70½ to 72.

Creating penalty-free withdrawals from retirement accounts for new births and adoptions.

Limiting stretch rules for inherited retirement accounts to 10 years.

Allowing participation in employer retirement plans for qualified part-time workers.

plus much more.

The following is an overview of some of the tax proposals discussed or introduced in Congress in December 2019. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

To amend the Internal Revenue Code of 1986 to repeal opportunity zones (House of Representatives Bill 5252): This bill, introduced Nov. 22, proposes to eliminate Opportunity Zones from the federal tax code.

Universal Charitable Giving Act of 2019 (House of Representatives Bill 5293): This bill, introduced Dec. 3, proposes to amend the Internal Revenue Code of 1986 to allow above-the-line deductions for charitable contributions for individuals not itemizing deductions.

Advancing Support for Working Families Act (House of Representatives Bill 5296): This bill, introduced Dec. 4, proposes to amend the Internal Revenue Code of 1986 to provide an election to advance future child tax credits in the year of birth or adoption.

Freedom To Invest in Tomorrow’s Workforce Act (House of Representatives Bill 5339): This bill, introduced Dec. 6, proposes to amend the Internal Revenue Code of 1986 to permit certain expenses associated with obtaining or maintaining recognized postsecondary credentials to be treated as qualified higher education expenses for purposes of 529 accounts.

E. Cooper Brown Ocean Clean Energy Act of 2019 (House of Representatives Bill 5375): This bill, introduced Dec. 10, proposes to amend the Internal Revenue Code of 1986 to allow the energy credit for certain ocean thermal energy equipment.

Restoring Tax Fairness for States and Localities Act (House of Representatives Bill 5337): This bill, introduced Dec. 10, proposes To amend the Internal Revenue Code of 1986 to modify the limitation on deduction of State and local taxes, and for other purposes.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in November 2019. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Foster Opportunity EITC Act of 2019 (Senate Bill 2790): This bill, introduced Nov. 6, proposes to amend the Internal Revenue Code of 1986 to strengthen the earned income tax credit and expand eligibility for childless individuals, homeless youth, and youth formerly in foster care.

Opportunity Zone Reporting and Reform Act (Senate Bill 2787): This bill, introduced Nov. 6, proposes to amend the Internal Revenue Code of 1986 to require reporting for qualified opportunity funds, to make modifications to opportunity zones, and for other purposes.

Primary Care Patient Protection Act of 2019 (Senate Bill 2793): This bill, introduced Nov. 6, proposes to amend the Internal Revenue Code of 1986 to require coverage without a deductible of certain primary care services by high deductible health plans.

Millionaires Surtax Act (Senate Bill 2809): This bill, introduced Nov. 7, proposes to amend the Internal Revenue Code of 1986 to impose a surtax on high income individuals.

Lifetime Learning Credit Enhancement Act (Senate Bill 2819): This bill, introduced Nov. 7, proposes to amend the Internal Revenue Code of 1986 to increase the income-based limitations for the Lifetime Learning Credit, and for other purposes.

Farmers’ Access to Resources and Machinery Act (House of Representatives Bill 5007): This bill, introduced Nov. 8, proposes to amend the Internal Revenue Code of 1986 to expand certain exceptions to the private activity bond rules for first-time farmers, and for other purposes.

Investing in American Workers Act (House of Representatives Bill 5012): This bill, introduced Nov. 8, proposes to amend the Internal Revenue Code of 1986 to provide a credit for employer-provided worker training.

Opportunity Zone Accountability and Transparency Act (House of Representatives Bill 5011): This bill, introduced Nov. 8, proposes to amend the Internal Revenue Code of 1986 to require reporting by qualified opportunity funds.

Support Our Start-Ups Act (Senate Bill 2841): This bill, introduced Nov. 13, proposes to amend the Internal Revenue Code of 1986 to increase the limitations for deductible new business expenditures and to consolidate provisions for start-up and organizational expenditures.

Rural Broadband Investment Tax Credit Act (Senate Bill 2867): This bill, introduced Nov. 14, proposes to amend the Internal Revenue Code of 1986 to provide an investment credit for qualified broadband projects.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in October 2019. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

American Future Healthcare Act of 2019 (House of Representatives Bill 4651): This bill, introduced Oct. 11, proposes to amend the Internal Revenue Code of 1986 to expand health savings accounts, and for other purposes.

Excise Narcotics Distribution in the Epidemic Act of 2019 (House of Representatives Bill 4631): This bill, introduced Oct. 11, proposes to amend the Internal Revenue Code to impose an excise tax on opioid manufacturers, to make the funds collected through such tax available for opioid (including heroin) abuse prevention and treatment programs, and for other purposes.

New Home Energy Efficiency Act (Senate Bill 2595): This bill, introduced Oct. 15, proposes to amend the Internal Revenue Code of 1986 to extend and update the new energy efficient home credit.

High Rise Fire Sprinkler Incentive Act of 2019 (House of Representatives Bill 4685): This bill, introduced Oct. 15, proposes to amend the Internal Revenue Code of 1986 to classify certain automatic fire sprinkler system retrofits as 15-year property for purposes of depreciation.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in September 2019. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Affordable Housing Incentives Act of 2019 (House of Representatives Bill 4239): This bill, introduced Sept. 6, proposes to amend the Internal Revenue Code of 1986 to allow for non-recognition of gain on real property sold for use as affordable housing.

Fair Share for Workers Act (Senate Bill 2445): This bill, introduced Sept. 9, proposes to amend the Internal Revenue Code of 1986 to impose a surtax on corporations with significant disparities in employee wages.

Cutting Local Taxes by Reinstating SALT Act (House of Representatives Bill 4274): This bill, introduced Sept. 10, proposes to amend the Internal Revenue Code of 1986 to repeal the limitation on the deduction for certain taxes, including state and local property and income taxes, to limit the step-up in basis allowed in the case of property acquired from a decedent, and to deem a sale on any contribution of property to a private foundation.

Tax Refund Responsibility Act (House of Representatives Bill 4262): This bill, introduced Sept. 10, proposes to amend the Internal Revenue Code of 1986 to exclude the portion of a lump-sum social security benefit payment that relates to periods prior to the taxable year from the determination of household income.

E-Cigarette Tax Parity Act (Senate Bill 2463): This bill, introduced Sept. 11, proposes to amend the Internal Revenue Code of 1986 to provide for regulation and taxation of electronic cigarettes and alternative nicotine products.

Hurricane Dorian Charitable Giving Act (Senate Bill 2476): This bill, introduced Sept. 12, proposes to provide a temporary increase in the limitation on deductible contributions made for relief efforts related to Hurricane Dorian.

End Discriminatory State Taxes for Automobile Renters Act of 2019 (House of Representatives Bill 4311): This bill, introduced Sept. 12, proposes to protect consumers from discriminatory state taxes on motor vehicle rentals.

Child Tax Credit Extension Act (Senate Bill 2490): This bill, introduced Sept. 17, proposes to amend the Internal Revenue Code of 1986 to make permanent certain changes made by Public Law 115-97 to the child tax credit.

Compassionate Retirement Act of 2019 (Senate Bill 2495): This bill, introduced Sept. 18, proposes to amend the Internal Revenue Code of 1986 to establish an exception to the penalty on early distributions from qualified plans for individuals diagnosed with certain terminal illnesses.

Worker Dividend Act of 2019 (House of Representatives Bill 4419): This bill, introduced Sept. 19, proposes to amend the Internal Revenue Code of 1986 to ensure that workers and communities that are responsible for record corporate profits benefit from the wealth that those workers and communities help to create, and for other purposes.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in August 2019. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Support Working Families Act (Senate Bill 2437): This bill, introduced Aug. 1, proposes to amend the Internal Revenue Code of 1986 to establish a refundable tax credit for parents who take leave from employment following the birth or adoption of a child.

Health Savings Account Expansion Act of 2019 (Senate Bill 2441): This bill, introduced Aug. 1, proposes to amend the Internal Revenue Code of 1986 to allow individuals who are not enrolled in a high deductible health plan to have access to health savings accounts, and for other purposes.

Qualified Health Savings Account Distribution Act of 2019 (Senate Bill 2440): This bill, introduced Aug. 1, proposes to amend the Internal Revenue Code of 1986 to expand permissible distributions from an employee's health flexible spending account or health reimbursement arrangement to their health savings account.

Fairness in Social Security Act of 2019 (House of Representatives Bill 4157): This bill, introduced Aug. 2, proposes to amend the Internal Revenue Code of 1986 to exclude the portion of a lump-sum social security benefit payment that relates to periods prior to the taxable year from the determination of household income.

America Wins Act (House of Representatives Bill 4142): This bill, introduced Aug. 2, proposes to amend the Internal Revenue Code of 1986 to rebuild the Nation's infrastructure, provide a consumer rebate to the American people, assist coal country, reduce harmful pollution, and for other purposes.

Religious Freedom Peace Tax Fund Act (House of Representatives Bill 4169): This bill, introduced Aug. 6, proposes to amend the Internal Revenue Code of 1986 to affirm the religious freedom of taxpayers who are conscientiously opposed to participation in war, to provide that the income, estate, or gift tax payments of such taxpayers be used for nonmilitary purposes, to create the Religious Freedom Peace Tax Fund to receive such tax payments, to improve revenue collection, and for other purposes.

Teacher Tax Deduction Enhancement Act of 2019 (House of Representatives Bill 4180): This bill, introduced Aug. 9, proposes to amend the Internal Revenue Code of to increase and expand the above-the-line deduction for certain expenses of school teachers.

Renewable Electricity Tax Credit Equalization Act (House of Representatives Bill 4186): This bill, introduced Aug. 13, proposes to amend the Internal Revenue Code of 1986 to modify the credit for electricity produced from certain renewable resources and the investment credit for certain qualified investment credit facilities.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in July 2019. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Dollars for the Wall Act (House of Representatives Bill 3717): This bill, introduced July 11, proposes to amend the Internal Revenue Code of 1986 to terminate the designation of income tax payments to the Presidential Election Campaign Fund and to provide for the designation of income tax payments to the Border Wall Trust Fund, and for other purposes.

Veterans Jobs Opportunity Act (Senate Bill 2100): This bill, introduced July 11, proposes to amend the Internal Revenue Code of 1986 to establish a small business start-up tax credit for veterans creating businesses in underserved communities.

Agriculture Environmental Stewardship Act of 2019 (House of Representatives Bill 3744): This bill, introduced July 12, proposes to amend the Internal Revenue Code of 1986 to make qualified biogas property and qualified manure resource recovery property eligible for the energy credit and to permit renewable energy bonds to finance qualified biogas property, and for other purposes.

Stop Corporate Inversions Act of 2019 (Senate Bill 2140): This bill, introduced July 17, proposes to amend the Internal Revenue Code of 1986 to modify the rules relating to inverted corporations.

S Corporation Modernization Act of 2019 (Senate Bill 2156): This bill, introduced July 18, proposes to amend the Internal Revenue Code of 1986 to provide for S corporation reform, and for other purposes.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in June 2019. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Business Activity Tax Simplification Act of 2019 (House of Representatives Bill 3063): This bill, introduced June 3, proposes to regulate certain State taxation of interstate commerce, and for other purposes.

Expanding Access to Retirement Savings for Caregivers Act (House of Representatives Bill 3078): This bill, introduced June 4, proposes to amend the Internal Revenue Code of 1986 to reduce the age for making catch-up contributions to retirement accounts to take into account time out of the workforce to provide dependent care services.

Affordable Housing Credit Improvement Act of 2019 (Senate Bill 1703): This bill, introduced June 4, proposes to amend the Internal Revenue Code of 1986 to reform the low-income housing credit, and for other purposes.

Student Loan Interest Deduction Act of 2019 (House of Representatives Bill 3098): This bill, introduced June 4, proposes to increase the deduction allowed for student loan interest.

Supermarket Tax Credit for Underserved Areas Act (House of Representatives Bill 3123): This bill, introduced June 5, proposes to amend the Internal Revenue Code of 1986 to provide tax incentives for the establishment of supermarkets in certain underserved areas.

College Admissions Fairness Act (Senate Bill 1732): This bill, introduced June 5, proposes to amend the Internal Revenue Code of 1986 to provide rules for the disallowance and recapture of certain charitable contributions to colleges and universities, and for other purposes.

Taxpayers First Act (House of Representatives Bill 3151): This bill, introduced June 6, proposes to amend the Internal Revenue Code of 1986 to modernize and improve the Internal Revenue Service, and for other purposes.

Working Families Tax Relief Act of 2019 (House of Representatives Bill 3157): This bill, introduced June 6, proposes to amend the Internal Revenue Code of to expand the earned income and child tax credits, and for other purposes.

Waterway LNG Parity Act of 2019 (Senate Bill 1774): This bill, introduced June 11, proposes to amend the Internal Revenue Code of 1986 to provide for an energy equivalent of a gallon of diesel in the case of liquefied natural gas for purposes of the Inland Waterways Trust Fund financing rate.

Ending Tax Breaks for Private Prisons Act (Senate Bill 1827): This bill, introduced June 13, proposes to amend the Internal Revenue Code of 1986 to exclude corporations operating prisons from the definition of taxable REIT subsidiary.

IMPORTANT: The above are proposals. There are many steps each bill must go through before they are signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

The following is an overview of some of the tax proposals discussed or introduced in Congress in May 2019. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.

Jobs and Premium Protection Act (House of Representatives Bill 2447): This bill, introduced May 1, proposes to repeal the annual fee on health insurance providers enacted by the Patient Protection and Affordable Care Act.

No Tax Subsidies for Stadiums Act of 2019 (House of Representatives Bill 2446): This bill, introduced May 1, proposes to amend the Internal Revenue Code of 1986 to ensure that bonds used to finance professional stadiums are not treated as tax-exempt bonds.

Gold Star Family Tax Relief Act (House of Representatives Bill 2481): This bill, introduced May 2, proposes to amend the Internal Revenue Code of 1986 to treat certain military survivor benefits as earned income for purposes of the kiddie tax.

Preserve Charities and Houses of Worship Act (Senate Bill 1282): This bill, introduced May 2, proposes to amend the Internal Revenue Code of 1986 to repeal certain rules related to the determination of unrelated business taxable income.

Clean energy for Americans Act (Senate Bill 1288): This bill, introduced May 2, proposes to amend the Internal Revenue Code of 1986 to provide tax incentives for increased investment in clean energy.

Hire Student Veterans Act (House of Representatives Bill 2499): This bill, introduced May 2, proposes to amend the Internal Revenue Code of 1986 to provide the work opportunity tax credit with respect to hiring veterans who are receiving educational assistance under laws administered by the Secretary of Veterans Affairs or Defense.

Americans Giving Care to Elders (AGE) Act (Senate Bill 1351): This bill, introduced May 7, proposes to amend the Internal Revenue Code of 1986 to provide an income tax credit for eldercare expenses.

Putting First Responders First Act (House of Representatives Bill 2560): This bill, introduced May 7, proposes to amend the Internal Revenue Code of 1986 to exclude certain disability-related first responder retirement payments from gross income.

BUILD Act (House of Representatives Bill 2541): This bill, introduced May 7, proposes to amend the Internal Revenue Code of 1986 to increase the national limitation amount for qualified highway or surface freight transfer facility bonds.

Make Marriage Great Again (House of Representatives Bill 2604): This bill, introduced May 8, proposes to amend the Internal Revenue Code of 1986 to eliminate the marriage penalty in the income tax rate brackets.

IMPORTANT: The above are proposals. There are many steps each bill must go through before it is signed into law.

Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342

In recent IRS notice 2020-23, the IRS is granting a delay in claiming 2016 tax refunds until July 15, 2020.

The problem

If you do not claim a refund in time, you lose it forever. So on April 15, 2020 if you are owed a refund for 2016 and do not file a tax return to receive it, you lose your money forever!

More time to file

Because of the coronavirus pandemic, the tax filing date for 2019 is moved from April 15 to July 15. What is now clear, is that with this filing date move, it also includes the statute of limitations to claim any unclaimed refunds for the 2016 tax year.

What to do now

If you did not file a tax return for 2016 and you believe you are owed money, you now have 90 more days to claim it. But don’t delay! The IRS is very strict on these dates. If you are even a day late, your money is lost forever.

While the IRS is granting this delay, it is not clear if states are following suit. So, if you have a state tax refund you need to understand their deadlines as well.

What every taxpayer should know

In addition to filing delays and a one-time stimulus payment, the IRS is implementing many changes in response to the coronavirus pandemic. Here are some of the major topics that could affect you and your family.

Early distribution penalty waived

The 10% early distribution penalty on up to $100,000 of retirement withdrawals for coronavirus-related reasons is waived during 2020. New provisions allow tax liabilities on these distributions to be paid over a three-year period. The new rules also allow individuals to return these distributions to the retirement account over a three-year period and not be subject to annual contribution limits.

Action: This could be a great way to handle emergency payments until you receive a stimulus check, unemployment payments, or a pending small business loan.

Required Minimum Distributions (RMDs) waived for 2020

Required minimum distributions (RMDs) in the year 2020 for various retirement plans is suspended. The corresponding 50% penalty associated with not taking an RMD is also suspended in 2020.

Action: Taking out distributions when the market takes a tumble can hurt future retirement income for many years. This change allows you to wait to let the value in your retirement account rebound before you withdraw funds.

IRS Installment agreement suspension

The IRS announced suspension of payments of all amounts due from April 1 through July 15, 2020 and will not default any installment agreement during this period. Interest will continue to accrue on all installment agreements.

Action: Being on the bad side of the IRS in never fun. If you currently have an IRS installment agreement, look to take advantage of this delay.

Offers-in-compromise

The IRS will allow you until July 15, 2020 to provide additional requested information for any pending offers-in-compromise (OIC) and will not close out the OIC during this time without your consent. The IRS is also suspending any payments due under an OIC until July 15, 2020.

Enforcement Activities Suspended? Not so fast...

The filing and enforcement of liens and levies will generally be suspended. However, IRS Revenue Officers will continue to pursue high income non-filers and initiate other actions when warranted.

No new audits

The IRS will not initiate new audits during this time, but will act to protect the statute of limitations.

Much is happening during this unique time in our country's history. Rest assured, as changes are made you will be informed. In the meantime, please keep yourself and your family safe.

Beginning April 3, 2020, your small business can apply for a PPP loan funded as part of the coronavirus CARES Act. The great thing about these loans, is that they are low cost and some or all of it can be forgiven.

The problem

The rush to get this program up is understandably confusing and chaotic. If you wish to get your small business application into the program here are some suggestions.

Small Business Administration (SBA) is administering. Not the Treasury Department or other government agency. So the SBA and your bank are the best places to get first hand information on the program. While banks have information, they are swamped... so check with SBA first! Here is a link: PPP loan information

Example: For a number of days there were two versions of an application form; one from Treasury and one from the SBA. Though similar, banks will need to follow SBA guidelines!

SBA banks are on the front line. This is where YOU go to get an application filed for loan approval into the program. So work with a bank that is good at this process. Start with your business banker and go from there.

The risk to your bank could be high! The SBA loan guarantee is critical for your bank. If they mess up, the guarantee goes away, and they are on the line for the loss. So the risk is high for your bank and the reward is low. Do not forget this. Give them exactly what they need!

High demand, means low availability. The SBA loan processing system is not developed to handle the volume they are receiving. This includes banks handling SBA transactions. So be patient and for goodness sake DO NOT become the bottleneck. Turn their requests around as quickly and as accurately as possible.

And remember to ask for help. You want to do this right the first time, even with change rules and constantly evolving requirements.

There is a lot of confusion about home equity loans following the passage of the Tax Cuts and Jobs Act (TCJA). The act changes the rules on whether the interest on these loans is deductible. So is it?

The short answer: Not unless you’ve used the money to buy, build or substantially improve your home.

The IRS indebtedness rules

For decades, taxpayers have been using home equity loans to finance home improvements by borrowing against the value of their home. But they’ve also used home equity loans and lines of credit for alternative purposes, such as paying off credit card debt, paying for big purchases, or simply to finance living expenses.

Those alternative purposes are removed from the tax code beginning in 2018. Before the change, you could deduct interest on up to $100,000 in home equity indebtedness not spent on your home. Now, the interest is deductible only if it is used to buy, build or substantially improve your home. The IRS calls this acquisition indebtedness.

Example: Sam got into trouble with his credit cards in 2015 and took out a $100,000 home equity loan to consolidate his debts. It lowered his annual interest rate to 6 percent from 12 percent and he was able to deduct $6,000 in interest every year as an itemized deduction. Starting in 2018, Sam will no longer be able to deduct those interest payments because the loan was not used to build, buy or substantially improve his home.

What you need to know

Lower debt limits. The limits on the amount of acquisition indebtedness that you can use to deduct interest drops to $750,000 from $1 million. This lower limit only applies to new loans incurred after Dec. 15, 2017.

Less deductible interest. All interest on home equity loans and lines of credit used for anything other than to buy, build or substantially improve your home is no longer deductible.

Enforcement challenge. It's anyone's guess how the IRS will enforce this rule. Your best bet is to retain any receipts for home improvements and to figure out ways to apply any outstanding loan balances to home improvement activity.

Don't confuse terminology. Try not to get confused by the terms the IRS uses and what your bank may use to refer to your loan. The IRS doesn't care whether the bank calls the loan a home equity loan or something else; it only cares how you use the funds.

When you get ready to file your tax return, make sure a review of interest is on your list. You will need to substantiate the use of deductible interest going forward.

At the end of June, the IRS unveiled a new version of the 2018 Form 1040. This postcard-sized 1040 form replaces the old 2017 1040, as well as forms 1040EZ and 1040A. While some in Washington are celebrating the design as a simpler way to file, a closer look tells a different story.

What is changing?

Fewer lines. The new form has only 23 lines - 50 lines less than the 2017 1040. Some of the lines saved come from the elimination of exemptions, but most come from combining many old lines into a single line.

Six new schedules. The complete 2018 1040 tax form is now seven tax forms. The 50+ lines removed from the old 1040 now exist on one of six new schedules. These schedules (referred to as Schedule 1, Schedule 2, etc.) use many of the same line numbers and descriptions as the old 1040, which will help for year-over-year comparability.

Many new lines. Lines are added to accommodate new tax legislation, like the “Qualified business income deduction” for the new 20-percent pass through deduction for business owners.

What you need to know

Virtually everyone now files multiple forms. This new 1040 system is anything but simple. Now the majority of taxpayers will need to complete at least one of the new schedules to file with their 1040. Even taxpayers previously using the simple 1040EZ might be required to file an additional schedule or two. The IRS website states that only “taxpayers with straightforward tax situations” will be able to skip the new schedules.

The postcard goal is met. While the newly proposed form 1040 is postcard-sized, the type is now smaller and filing the 1040 form now requires a lot of retraining and reprogramming. Tax software companies are reprogramming their software, and the IRS is telling congress it needs millions of dollars to implement the changes.

New forms often change. Be aware that this version of the 1040 is new and revisions are expected as forms are used and problems arise.

Unfortunately, the new 1040 form appears to be more a product of political desire rather than a strategic redesign. This added confusion is one more reason taxpayers will need help navigating this new tax landscape.

One of the things that’s going away under the new tax reform laws implemented this year is an employee’s ability to deduct unreimbursed expenses related to their job.

Farewell to miscellaneous itemized deductions

The deduction for unreimbursed employee expenses was among the qualified 2-percent miscellaneous itemized deductions that were eliminated by the Tax Cuts and Jobs Act (TCJA) passed in late 2017. This could be a blow for employees who had relied on it to deduct unreimbursed expenses for such things as work-related meals, entertainment, gifts, lodging, tools, supplies, professional dues, licensing fees, work clothes and work-related education.

A win-win solution

If you are an employee who has used this tax deduction, here are some tips to minimize its loss:

Determine the impact. Review your past tax records to help estimate how much you expect to pay in unreimbursed work expenses and what the tax deduction was worth to you.

Discuss the situation with your employer. If the loss of this deduction is a hardship, talk to your employer about how you will be affected.

The win-win. Ask your employer to consider reimbursing you for your work-related expenses directly. Your employer can probably deduct those expenses from their business return without increasing your taxable income. This will save them tax dollars when compared with the cost of raising your pay in order to indirectly compensate you for your unreimbursed expenses.

If you are an employer, consider talking to your employees about their unreimbursed expenses now that the tax laws have changed. If you wish to reimburse their qualified business expenses, make sure your reporting adheres to IRS accountable plan rules so that your reimbursements are deductible as a business expense and do not add to your employees' incomes.

Topline: If next year’s tax return claims an Earned Income Tax Credit or the Additional Child Tax Credit your refund will be held by the IRS until February 15th.

The delay in sending out tax refunds is mandated by tax law legislation because of the proliferation of identity theft and tax fraud. This extra time will be used by the IRS to help prevent revenue loss from early tax return filings claiming invalid tax refunds. Those most impacted by this change are early tax return filers. While the IRS plans future correspondence to alert taxpayers to this change, here are some things to note.

Entire refund. If your tax return claims either of these credits, your entire refund will be held until February 15th.

Do not delay. If you typically file early, do not delay filing your tax return because of this rule change. Tax returns can still be processed. Only the refund payment is being delayed.

The bottleneck. Filing early can help you avoid the bottleneck of tax refund processing. On February 15th you will want to be at the front of the line to receive your money.

Plan accordingly. If you historically plan on receiving and using an early refund, you will now need to plan for this delay.

Late on Friday December 20th a new 1,770 page bill was signed into law. Deep within the pages of the Setting Every Community Up for Retirement Enhancement Act (SECURE ACT) are a number of retroactive tax law changes to current and expired tax laws. These new law extenders are in place for both 2019 and 2020. Here is what you need to know:

2019 Tax Law Changes

The tuition and fees deduction is available. The above the line deduction for up to $4,000 in qualified tuition and fees that expired is now available once again. You will need to evaluate this tax break versus others like the American Opportunity Credit and the Lifetime Learning Credit.

Mortgage Insurance Premiums as an itemized deduction. If your mortgage bank requires insurance on your loan and the loan qualifies, you may once again deduct this premium as an itemized deduction.

Medical expense deduction threshold stays at 7.5%. Prior rules had the threshold set at 10%. To deduct qualified expenses, your costs need to exceed this amount of your adjusted gross income.

Mortgage forgiveness is not income. If a bank forgives mortgage indebtedness, it is typically income to you. Now qualified principal residence indebtedness that is forgiven may be excluded from income with the reactivation of this tax law.

Disaster area filing extensions. In addition to allowing taxpayers to take penalty-free money out of retirement accounts for 2018 and 2019 in federally declared disaster areas, the new rules create an automatic 60-day filing extension for future declared disaster areas. In the past, the IRS issued these filing extensions on a case-by-case basis.

Old kiddie tax rules now rule. Rollback of kiddie tax rules to use parent's tax table versus the Estate and Trust tax table.

Other developments impact Retirement Account Rules

Many other changes are in the bill that come into play in 2020 and beyond. These include:

Eliminating the contribution age limit when funding traditional IRAs.

Moving the required minimum distribution from age 70½ to 72.

Creating penalty-free withdrawals from retirement accounts for new births and adoptions.

Limiting stretch rules for inherited retirement accounts to 10 years.

Allowing participation in employer retirement plans for qualified part-time workers.

plus much more.

On March 15, President Trump returned H.J. Res. 46 without his approval to the House of Representatives. This was a joint resolution that would have terminated the national emergency he declared regarding the crisis on the southern border in Proclamation 9844 on Feb. 15.

On Feb. 15, President Trump signed into law H.J. Res. 31, the Consolidated Appropriations Act, 2019.

According to the Senate Appropriations Committee press release, the package contains a bipartisan agreement on border security and government funding for the current fiscal year. The legislation provides $22.54 billion in total border security funding, with approx. $1.35 billion for 55 miles of new physical barriers in areas along the southwest border.

Read executive order

On Feb. 15, President Trump declared a national emergency regarding national security at the U.S. southern border. He stated that "the current situation at the southern border presents a border security and humanitarian crisis that threatens core national security interests and constitutes a national emergency." The declaration included the following directions:

Section 1. The Secretary of Defense, or the Secretary of each relevant military department, as appropriate and consistent with applicable law, shall order as many units or members of the Ready Reserve to active duty as the Secretary concerned, in the Secretary's discretion, determines to be appropriate to assist and support the activities of the Secretary of Homeland Security at the southern border.

Sec. 2. The Secretary of Defense, the Secretary of the Interior, the Secretary of Homeland Security, and, subject to the discretion of the Secretary of Defense, the Secretaries of the military departments, shall take all appropriate actions, consistent with applicable law, to use or support the use of the authorities herein invoked, including, if necessary, the transfer and acceptance of jurisdiction over border lands.

Sec. 3. This proclamation is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Along with tax season comes the season of tax identification theft. Those who have become victims know how frustrating the experience can be.

The frustration

Until now, if you were a victim of tax identity theft, you would be unable to receive information from the IRS about the depth of the fraud. Many frustrated taxpayers have tried to get copies of the fraudulently filed tax returns. The IRS has repeatedly refused freedom of information requests to get these copies.

What’s new?

In a recent announcement, the IRS has changed course on requests to get copies of fraudulently filed tax returns. As long as you follow their instructions, you are now able to get copies of what thieves attempted to do with your tax information. But be forewarned. The IRS may black out information on the requested return that does not pertain to you. They will try to present you with enough of the falsely filed tax return to allow you to determine the depth of the data that has been stolen.

Why the theft information may be important

You can see what personal information the thieves have. What has been compromised? Name, address, and Social Security Number? Do they have your dependent’s or spouse's information? Perhaps they also have your income and withholding data. Knowing this will help you plan the extent of data protection you will need.

There may be clues as to where the identity theft occurred. Of the information stolen, who had access to it? Did the data breach of your identity happen through the IRS or somewhere else?

There may be more tax years impacted than you thought. Request information from the year you first became aware of the identity theft at the IRS. But you may wish to request information in a prior year and in the year following the theft. The IRS has access to up to six years of tax returns. Try to determine whether the theft is ongoing is a one-time occurrence.

The request requires specific information. Here is a link to the IRS announcement: Instructions for Requesting Copy of Fraudulent Returns

Thankfully, the IRS’ recent decision to share this fraudulent information is allowing victims to take some action to protect themselves.

If you do not claim a refund in time, you lose it forever. So on April 15, 2020 if you are owed a refund for 2016 and do not file a tax return to receive it, you lose your money forever!

More time to file

Because of the coronavirus pandemic, the tax filing date for 2019 is moved from April 15 to July 15. What is now clear, is that with this filing date move, it also includes the statute of limitations to claim any unclaimed refunds for the 2016 tax year.

What to do now

If you did not file a tax return for 2016 and you believe you are owed money, you now have 90 more days to claim it. But don’t delay! The IRS is very strict on these dates. If you are even a day late, your money is lost forever.

While the IRS is granting this delay, it is not clear if states are following suit. So, if you have a state tax refund you need to understand their deadlines as well.

With the dramatic increase in identity theft, what can be done to protect your Social Security Number (SSN) from these would-be thieves? Here are some ideas.

Do not carry your Social Security Card with you. Your parents were encouraged to do this, but times have changed. You will need to provide it to a new employer, but that is about it.

Know who NEEDS your Social Security Number. The list of those who need to have your number is limited. It includes:

Your employer. To issue wages and pay your taxes.

The IRS. To process your taxes.

The State Revenue department. To process your state taxes.

The Social Security Administration. To note your work history and record your benefits.

Your retirement account provider. To enable annual reporting to the IRS.

Banks. To enable reporting to the IRS.

A few others. Those who need to report your activity to the government (example: investment companies.)

Do not use any part of your Social Security number for passwords or account access. Many retirement plans use your Social Security Number to enable you to access their on-line tool. When this happens, reset the login and password as soon as possible.

Do not put your Social Security Number on any form. Unless a business has a legal need for your number, do not provide it. Common requestors of this number are insurance companies and health care providers. Simply write, “not available due to theft risk” in the field that requests your number. If the supplier says they need it, ask them why.

Do not note your full Social Security number on any form. If you are required to give out your number, try marking out the first five numbers. (xxx-xx-1234)

Do not put your Social Security Number on your checks. Certainly not on your pre-printed checks. If requested by the government to place your number on your check to apply your payments, simply put the last four digits on the check.

Never give your number out over the phone or in an email. The only exception is when you make the phone call to a valid source that will need the number to access your account.This list is very limited. It includes calls you make to the IRS, Social Security, your state government, and limited partial numbers to your bank and health care insurance company.

Remember to periodically check your credit with the major agencies to ensure your data has not been stolen. Once stolen, it is often difficult to get a new SSN issued.

If you are eligible for the Premium Tax Credit you can decide to take it now based on your estimated income or take it later when you file your tax return. Who does this impact and what should you do?

What is the Credit and who is eligible?

Topline: If you have health insurance available from your employer, this credit is not for you. If, on the other hand, you are self-employed, your employer recently provided you a notice they are moving health insurance coverage to the “exchange or marketplace”, or you currently do not have health insurance then this information is important to understand.

Open enrollment for health insurance plans through the Marketplace runs from November 1st through December 15th. If you are eligible and enroll in one of these plans through the Insurance Marketplace you may be eligible to have your premium reduced by the new Premium Tax Credit.

To be eligible for the Premium Tax Credit you must;

buy your health insurance through the new Health Insurance Marketplace (state exchanges)

be ineligible for health insurance coverage through an employer or through other government programs

not be claimed as a dependent on someone else’s tax return

if married, file a joint tax return

meet certain income requirements

Take it now or claim it later?

One of the tricky decisions you’ll make if enrolling for health insurance through the Marketplace is deciding to take the Premium Tax Credit to reduce your monthly health insurance premium payments or wait and receive the tax credit when you file your tax return. Here are some tips:

Predictable income? If you can accurately predict your income and number of dependents consider applying an estimated credit now to reduce your monthly health insurance cost.

Predictable family situation? If you know the number of dependents you will have and your status (married, single, etc.) in addition to your income consider applying the credit during the year. If your family situation changes during the year you can always update your profile in the plan.

Understand the downside. If you misrepresent your income and it impacts your eligibility for the Premium Tax Credit you will have to repay the credit on your tax return. This could become a real financial hardship.

Middle ground? Consider estimating your income, but make it slightly higher than you anticipate. This way your monthly health insurance premium will be a bit higher, but you may also receive a larger refund at the end of the year.

Remember, if you do not have health insurance you may be subject to new penalties payable when you file your tax return.

Few things are more unnerving than having your tax return selected for an IRS audit. The IRS uses that "audit anxiety" to help keep taxpayers honest on their tax returns.

DIF scores count

The IRS evaluates tax returns based on their "DIF" scores, a set of IRS formulas known as the "Discriminate Function System." About three-quarters of all returns audited are selected by the DIF computer, which compares deductions, credits, and exemptions with the norms for taxpayers in each income bracket.

While these formulas are kept very secret by the IRS, you can count on having a higher audit probability if you fall into certain categories or report certain things on your tax return.

What interests the IRS?

Some higher risk areas include the following -

1. Tax protests. Both the IRS and tax courts are getting fed up with what they consider frivolous tax protests. If you file a return stating that you owe no tax because the dollar is worthless or make some other such protest, you'll probably be audited.

2. High income. Because auditing higher-income taxpayers is likely to produce more additional tax revenue than auditing lower-income taxpayers, this category is targeted by the IRS.

3. Certain occupations. Taxpayers whose occupations produce cash income, such as taxi drivers and waiters, run a higher risk of being audited. Self-employed individuals, particularly independent contractors, are IRS targets for the same reason; they are more likely to have unreported cash income.

4. No preparer or a problem preparer. If you have a complex return and prepared it yourself, or if your return was prepared by someone on the IRS's problem-preparer list, you are more likely to be audited.

5. Certain deductions. The IRS has found it profitable to audit returns that claim office-in-the-home deductions, travel and entertainment deductions, and certain other write-offs where they feel taxpayers stretch the truth.

6. Related party transactions. Taxpayers who involve family members in their financial operations are more likely to be scrutinized by the IRS. Paying wages to your children, lending money to relatives, splitting income among family members, or running a family business will make the IRS more interested in your returns.

7. Abusive tax shelters and offshore accounts. In the last few years the Internal Revenue Service has detected a proliferation of abusive trust tax evasion schemes. It also believes some people are using offshore credit cards to evade paying U.S. income taxes. The Service intends to expand its efforts to crack down on abuses in these areas.

Your best audit defense

Unless there is suspicion of fraud or substantial understatement of income, the IRS has three years from the due date of your return to initiate an audit. Typically, most returns are selected within two years of their filing date.

The best defense in an audit is a two-part strategy:

1. Have supporting documentation for all deductions and credits.

2. See your accountant immediately upon notification that you're being audited.

A professional can put your mind at ease, find the information that the IRS wants more quickly than you can, and very likely will save you money in the long run by getting a faster and more favorable conclusion to the audit.

In Internal Revenue Service Notice 2014-21, virtual currencies like Bitcoin are classified as property. The IRS is aware of the growing popularity of this medium of exchange and that it is not considered legal tender by any government. The IRS notice hopes to clarify how you must treat your use of this new technology. The outcome for users is not good. Here is what you need to know;

As property. Property is subject to gains and loses. So if you use a virtual currency like Bitcoin, you must keep track of the original cost of the coin and its value when you use it. As a capital asset you must also know whether your gain or loss on use of the virtual currency is a short-term or long-term.

As income. Wages paid in virtual currency are taxable to the employee, must be reported on a W-2, and are subject to employment taxes. Income received as an independent contractor has self-employment rules applied and must follow Form 1099 reporting requirements.

A currency? Per the IRS, no. Businesses have the ability to calculate foreign currency gains and losses on their financial statements. This foreign currency gain or loss calculation is not available for virtual currencies like Bitcoin.

Determining value. If you purchase or sell something using a virtual currency, you need to determine the fair market value of the transaction using a valid virtual currency exchange and translating it into U.S. dollars.

Miners have income. Miners are those who receive Bitcoins and other virtual currencies by validating transactions and maintaining public Bitcoin ledgers. If you are someone who “mines” virtual currency, you create income upon receipt of the currency. This is a taxable event.

As the technology of alternative methods to exchange goods and services evolves, so will your need to understand it. Should someone offer to provide you with Bitcoins for products and services, you will now know there are tax implications to saying yes.

There are many ways to save for college, but one thing is certain: it is never too early to start. One way to save for college is with a "Section 529" plan. These plans offer a way to pay for college expenses with some nice tax advantages.

What are they?

Section 529 plans allow you to set up a tax-advantaged account to pay for your child's college education. There are two types of Section 529 plans: prepaid tuition programs and college savings plans.

Prepaid tuition programs let you lock in today's tuition costs by purchasing tuition credits or certificates that a student redeems when he or she starts college.

College savings plans let you make contributions to a state-sponsored savings account to build a fund for your child's college expenses. These accounts are generally managed by a private mutual fund company. This is the Section 529 plan you've probably been hearing about, and it is this type of college plan that is the focus of this article.

How do Section 529 college savings plans work?

Make a gift to set up an account.You start by setting up an account and naming your child (or anyone else) as the beneficiary. Your contribution is considered a gift. Your contributions qualify for the $14,000 annual tax-free gift exclusion ($28,000 for married couples making a joint gift).

Special rules for 529 plans let you average your gift over five years. This means married couples can make a $140,000 joint gift and individuals can make a $70,000 gift in a single year, without incurring gift tax. However, you cannot make additional gifts to your child for five years, or you may owe gift tax.

Your contribution is limited.You aren't permitted to make contributions to a 529 plan beyond what is necessary to pay for your child's college expenses. Each plan sets its own limit.

Most plans allow you to make either a lump sum contribution or a series of monthly contributions. All contributions must be made in cash; you can't contribute shares of stock or other property to these plans.

You remain in control. You cannot choose the investments in the fund - you must choose one of the plan's investment options. However, you do remain in charge of all withdrawal decisions. You can allow your child to make withdrawals to pay for college expenses. If your plan permits it, you can change the beneficiary to one of your other children. If you change your mind about maintaining the account, you can even request a refund (tax and penalties will apply).

Your child can withdraw money to pay for college expenses.Section 529 funds must be used for qualified higher education expenses, such as tuition, fees, books, and supplies. They can also be used to cover certain room and board expenses, as long as your child attends school at least half-time. If your child receives a scholarship, you can request a penalty-free refund up to the amount of the scholarship. In addition, you can withdraw the funds if your child becomes disabled or dies.

If the funds are withdrawn for any other purpose, you (not your child) pay tax on the earnings that have accumulated in the fund.

You can change plans. You can make a tax-free rollover to another plan with the same beneficiary. That allows you to move your child's plan to another state's plan without losing the tax benefits. This tax-free rollover treatment only applies to one transfer within any 12-month period.

What are the benefits?

Section 529 plans offer tax benefits. Your contribution is not tax-deductible, but your investment grows tax-deferred. That allows your money to grow faster than a similar investment in a taxable account. Qualified distributions from Section 529 college savings plans are tax-free.

Section 529 plans offer an estate planning opportunity. Section 529 plans let wealthy parents or grandparents transfer wealth out of an estate and into an account a child can use to pay for college expenses.

What are the disadvantages?

While these plans offer an attractive alternative to other college funding plans, they are not without drawbacks. There are a number of factors you should consider before you invest in a Section 529 college savings plan.

Substantial penalties apply to nonqualified withdrawals. Any nonqualified distributions will be subject to withdrawal fees and penalties. You'll also owe income tax on the distribution.

Your state plan may not meet your investment expectations. You should choose from among the available plans the one that meets your risk tolerance and performance expectations. But what if you are unhappy with a plan's investment performance? If your plan allows rollovers, you can move the funds into another plan. If you simply request a refund, you'll have to pay income tax and penalties on the distribution.

Do your homework.

The same federal income tax rules apply to all Section 529 college savings plans. However, each plan has unique features. Here are some items you should compare when you evaluate different plans.

State income taxes.

Investment return.

Enrollment fees.

Maximum contributions.

Flexibility in making contributions.

Withdrawal fees and penalties.

Transferability to another beneficiary or another qualified plan.

Choice of schools.

Participation by nonresidents.

Beneficiary age restrictions.

Covered education expenses, including restrictions on room and board.

Section 529 plans provide an attractive, tax-favored way to save for college. However, they are not the right choice for everyone.