IRS Updates 13 December

National Tax Security Awareness Week

The IRS and Security Summit partners marked National Tax Security Awareness Week earlier this month with a series of tips and reminders for consumers, taxpayers, businesses, and professionals. Advice focused on protecting your personal and financial information while online shopping, guarding against email and phishing scams, creating strong passwords, tips for business owners to avoid identity theft, and encouraging tax professionals to have a data security plan. 

Foreign Tax Credit Regulations Finalized

The IRS and Treasury issued final regulations regarding the Foreign Tax Credit. This credit generally allows individuals and businesses to claim a US tax credit for income taxes paid to foreign governments. These regulations were updated due to changes the Tax Cuts and Jobs Act (TCJA) made in how taxable income is calculated and how the US taxes international income.

Jan 31 Filing Deadline For Businesses

The IRS reminds employers and other businesses that wage statements and independent contractor forms have a due date of January 31. While businesses used to have more time to file such forms as Form W-2, Form W-3, and 1099-MISC, the 2015 Protecting Americans from Tax Hikes (PATH) Act permanently changed the due date to help protect against fraud. 

Dec 31 Deadline For Minimum Distributions

December 31 is the deadline for retirees to take their required minimum distributions (RMDs) from certain retirement plans. Those who turned 70½ in 2019 are allowed to wait until April 1, 2020, to take their first RMD. This deadline applies to most IRAs, SEP IRAs, SIMPLE IRAs, and workplace plans such as 401(k), 403(b) and 457(b) plans. Roth IRAs don’t require distributions while the original owner is alive.

Interest Rates To Remain the Same

The IRS announced that interest rates will remain the same for the quarter beginning January 1, 2020. The rates will be: 

  • 5% for overpayments (4% in the case of a corporation)
  • 2.5% for the portion of a corporate overpayment exceeding $10,000
  • 5% for underpayments
  • 7% for large corporate underpayments 

These rates are computed from the federal short-term rate determined during October 2019.