January 2020: Important Tax Law Changes
Virtual Currency
2019 Reporting Requirements
Starting with the 2019 tax year, individual taxpayers are now required to answer the following question: “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
Virtual currency, also commonly known as crypto-currency, has become subject to heightened enforcement from IRS due to intentional and accidental omissions by taxpayers in recent tax years. Common examples of this currency include Bitcoin, Litecoin, Ripple, Ethereum, etc.
If you participated in any transactions as outlined above in 2019 for any virtual currency, please contact our office to ensure these transactions are reported correctly on your 2019 income tax return.
Please note that when we prepare your 2019 individual income tax return, we may ask you if participating in any virtual currency transactions in 2019 because of these new reporting requirements.
Stay tuned for further discussions on virtual currency reporting in our February Newsletter.
Secure Act
Changes to IRA Accounts Starting in 2020
Congress recently passed, and the President signed into law, the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) which may affect how your plans for retirement. We have highlighted some of the important changes for you below.
The maximum age limit for making traditional IRA contributions has been repealed. Previously contributions were disallowed after reaching the age of 70 ½ years old. The new rules are effective January 1, 2020; and now any taxpayer with earned income is allowed to make IRA contributions.
The age for required minimum distributions for retirement plans and IRA accounts has been raised from 70 1/2 to 72 years old. For distributions required to be made after December 31, 2019, for individuals who attain age 70 1/2 after that date, the age at which individuals must begin taking distributions from their retirement plan or IRA is increased from 70 1/2 to 72.
Important Deadlines & Reminders
February 24, 2020 – Please provide all documents and required information for partnership and S-corporation tax returns by February 24, 2020. In order to provide our best service, your tax return will be extended and completed after April 15, 2020, if there is still outstanding information needed by February 24, 2020.
Please Note: extended business returns will be prepared after the individual filing deadline, April 15, 2020. Thus, we will also be filing an extension for your individual return if we extend your business return.
February 28, 2020 – Forms 1099 and Form 1096 must be filed with the IRS for all payments other than non-employee compensation if the form is paper-filed with the IRS.
March 16, 2020 – Federal and state income tax returns are due for flow-through entities, including partnerships and S-Corporations.
March 23, 2020 – Please provide all documents and required information for individual and C-corporation tax returns by March 23, 2020. In order to provide our best service, your tax return will be extended and completed after April 15, 2020, if there is still outstanding information needed by March 23, 2020.
March 31, 2020 – Forms 1099 and Form 1096 must be filed with the IRS for all payments other than non-employee compensation if the form is electronically filed with the IRS.
April 15, 2020 – Federal and state income tax returns are due for individual taxpayers, C-Corporations, and Estates and Trusts.