Translations from Your Trusted Advisor.
Lena Rozzi, CPA •
The enactment of the Tax Cuts and Jobs Act (TCJA), passed in December 2017, effectively became one of the largest tax reforms in decades, however, there are changes that will leave some taxpayers owing more taxes then they anticipated this year.
So you’ve prepared your return and you owe the IRS but you don’t have the money to pay. Now what?
Angela Campbell, CPA •
The housing market is at the top of its game these days and your friends are suggesting that you sell your home. You know you will receive multiple offers and probably sell the house over what you are asking for it. Do your homework to ensure that a sale won’t cost you more in taxes than you are putting in your pocket. Your tax advisor should be the first person that you call even before letting your real estate agent put a sign in your yard. Here are a few things you will need to know:
Pollyanna King, CPA, MST •
As you pour through your checkbook register and piles of receipts for tax reporting items, you may need to make a list of your 2019 charitable donations. For people who file using the itemized deduction method, and report your donations on Schedule A instead of using the standard deduction, you should have a list with the charity’s name, the date and the amount that was given followed by a grand total for your record of 2019 charitable donations.
Alyssa Hodges, CPA •
Now that we’re past the end of 2019, it’s that time of year where you get to pull together all of your tax documents. Your official tax forms may not all be here yet, but you can start putting together all of your receipts! I bet you love going through stacks of papers to put medical receipts and charitable deductions in a shoebox for your tax preparer, or maybe you stuff them in an envelope instead. Not so fast!
Alyssa Hodges, CPA •
The new year has been rung in and I’m sure your first thought in 2020 was, “2019 is over, I need to get my accountant my tax forms STAT!” However, you may have to take a breather and wait for everything you need to be ready. What should you wait for? It depends on the type of taxes you’re filing and what types of income you have.
In most cases, individuals should wait until they think they have all of their information together before giving it to their accountant.
The IRS has released a new Form W-4 for 2020. This form is provided to employers by their employees to authorize the proper amount federal income tax to be withheld from the employee’s paycheck. The previous version of this form was believed to be confusing because an employee had to come up with a number of allowances and the employer would use those allowances to calculate withholdings.
Lena Rozzi, CPA •
If you own or manage a rental property, chances are that you’ve heard of depreciation before. Once you’ve determined your depreciation rates, expensing it year-after-year can be pretty straightforward. However, if you decide to sell your property, any depreciation that you’ve taken will come back to you as a depreciation recapture. While the concept of depreciation recapture is more complicated than depreciation expense, real estate investors will benefit from understanding how depreciation recapture will affect your tax liability to avoid surprises when it comes time to file your tax returns.
By the time a lot of taxpayers get around to thinking about taxes, it could be too late to be proactive, and all you can do is close your eyes and write that check! By taking a look at your financial situation now, you may be able to take advantage of some tax saving strategies before the end of year to improve your tax outcome.
Wednesday, the IRS released Notice 2019-59 which provides cost of living adjustments for retirement plans for 2020.
401(k), 403(b), most 457 plans, and Thrift Savings Plan contribution limits have increased $500 to $19,500. The annual catch-up limitation for employees over age also increases $500, to $6,500.
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