Taxpayers who aren’t required to file annual returns can now use an IRS.gov web portal to submit basic personal and financial information necessary to receive coronavirus economic impact statements.
Relief for Other Coronavirus-related Tax Issues
Relief for taxpayers facing the challenges of COVID-19-related tax issues is now available through the IRS People First initiative. The projected start date will be April 1 and the effort will initially run through July 15, 2020. During this period, to the maximum extent possible, in-person contact will be avoided; however, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations.
Some of the highlights affecting taxpayers include:
Home Equity Loan Interest Still Deductible
The Tax Cuts and Jobs Act has resulted in questions from taxpayers about many tax provisions including whether interest paid on home equity loans is still deductible. The good news is that despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labeled.
Form 8962: Reconciling the Premium Tax Credit
Form 8962, Premium Tax Credit, reconciles 2019 advance payments of the premium tax credit and may also affect a taxpayer’s ability to get advance payments of the premium tax credit or cost-sharing reductions. Taxpayers who don’t file and reconcile their 2019 advance credit payments may not be eligible for advance payments of the premium tax credit in the future. Furthermore, filing Form 8962, with a return avoids possible delays in processing tax returns and subsequent delays in receiving tax refunds.
New Tax Law Affects Tax-Exempt Organizations
The Taxpayer Certainty and Disaster Tax Relief Act, passed on December 20, 2019, includes several provisions that may apply to tax-exempt organizations’ current and previous tax years. As such, tax-exempt organizations should understand how these recent tax law changes might affect them. With this in mind, let’s take a look at three key pieces of legislation that affect nonprofit organizations:
Are Tips Taxable? | Reporting Tip Income: The Basics
The short answer is yes, tips are taxable. If you work at a hair salon, barbershop, casino, golf course, hotel, or restaurant, or drive a taxicab, then the tip income you receive as an employee from those services is taxable income. Here are a few other tips about tips:
2020 Tax Withholding: the new Form W-4
Form W-4, Employee’s Withholding Certificate has been redesigned for 2020. Previously, income tax withholding was based on an employee’s marital status and withholding allowances or tied to the value of the personal exemption. With the revised Form W-4, however, income tax withholding is generally based on the worker’s expected filing status and standard deduction for the year. Furthermore, workers can also choose to have itemized deductions, the Child Tax Credit and other tax benefits reflected in their withholding for the year.
Opportunity Zone Guidance Finalized
Final regulations were recently issued regarding details about investment in qualified opportunity zones (QOZ) that modified and finalized proposed regulations for QOFs and QOZ businesses that were previously issued on October 28, 2018, and May 1, 2019.
The final regulations provide additional guidance for taxpayers who are eligible to make an election to temporarily defer the inclusion in gross income of certain eligible gain. The final regulations also address the ability of such taxpayers’ eligibility to increase the basis in their qualifying investment equal to the fair market value of the investment on the date that it is sold, after holding the equity interest for at least 10 years.
Tax Planning Includes Keeping Good Records | Seven Helpful Tips
It’s January and tax season is right around the corner. For many people that means scrambling to collect receipts, mileage logs, and other tax-related documents needed to prepare their tax returns. If this describes you, chances are, you’re wishing you’d kept on top of it during the year so you could avoid this scenario yet again. With this in mind, here are seven suggestions to help taxpayers like you keep good records throughout the year:
Watch Out for Gift Card Scams and Taxpayer Fraud
There’s never an off-season when it comes to scammers and thieves who want to trick people to scam them out of money, steal their personal information, or talk them into engaging in questionable behavior with their taxes. While scam attempts typically peak during tax season, taxpayers need to remain vigilant all year long. For example, gift card scams are currently on the rise and there are many reports of taxpayers being asked to pay a fake tax bill through the purchase of gift cards.