Key Tax Developments:
Taxpayer Certainty and Disaster Tax Relief Act of 2019
On December 20, 2019 the President signed into law the "Taxpayer Certainty and Disaster Tax Relief Act of 2019" (the "Disaster Act") as part of an omnibus spending package, the "Further Consolidated Appropriations Act, 2020" (H.R. 1865,PL 116-94).The Disaster Act extends over 30 Code provisions, generally through 2020. Click here for more details.
Taxpayer First Act
On July 1, 2019, The Taxpayer First Act of 2019 was signed into law, which aims to broadly redesign the Internal Revenue Service. Generally, the legislation aims to expand and strengthen taxpayer rights and to reform the IRS into a more taxpayer friendly agency by requiring it to develop a comprehensive customer service strategy, modernize its technology and enhance its cyber security. For more details check out: Taxpayer First Act - Internal Revenue Service
IRS Clarifies Who Is a Qualifing Relative for Family Credit Purposes:
Under the TCJA, you can't claim a dependency exemption for dependents, but you may be eligible for a $2000 credit for each qualifing child and a $500 credit for each qualifying non-child dependent, including qualifying relatives. One of the conditions for being a qualifying relative is that the person's gross income for the year can't be more than the exemption amount. The IRS has clarified that the gross income limit for a qualifying relative for the tax credit purposes is determined by reference to what the exempltion amount would have been if the exemption amount hadn't been reduced to zero by the TCJA. Thus, after 2017 and before 2026, the gross income limit is $4150, adjusted for inflation after 2018. For more details check out: Guidance on Qualifying Relative and the Exemption Amount.
IRS Explains 20% Deduction for Qualified Business Income:
The IRS has issued regulations on the new 20% deduction for qualified business income (QBI) created by the TCJA, also known as the pass-through deduction. As this is a very complicated part of the new tax code, it is impossible to summarize here. If you would like more information, please contact our office to set up an appointment.
Basic FAQ's on this deduction can be found here on the IRS website: Qualified Business Income Deduction FAQ's.
Tax Scams/Consumer Alerts:
The Equifax Data Breach: What to Do
Equifax - Cybersecurity Incident & Important Consumer Information
Federal Trade Commission - Consumer Information
Federal Trade Commission - Credit Freeze FAQ's
Article - IRS Security Awareness Tax Tips
Articles - Scam Phone Calls Continue; IRS Identifies Five Easy Ways to Spot Suspicious Calls:
IRS Identifies Five Easy Ways to Spot Suspicious Calls
IRS - How to know it's really the IRS calling or knocking on your door
IRS - Consummer Alert: Scammers Change Tactics
Article - Tax Scams:
IRS - Tax Scams / Consumer Alerts
Information on Suspicious E-Mails & Identity Theft:
IRS Newsroom - Suspicious Emails and Identity Theft
IRS Recent News Releases
Tax Relief in Disaster Situations
Information for Same-Sex Couples & Certain Domestic Partners: