Tag Archives: Tax Information

Tax Updates August 31

Natural Disaster Relief

Victims of recent disasters have had many deadlines extended to December 15, 2020. This includes many individual and business tax returns and tax payments normally due in September, October, and November. The extensions have been granted to those living in FEMA-designated disaster zones, including parts of Iowa affected by the August 10 derecho storm, and those affected by wildfires in California. Hurricane affected areas are being added; the IRS’ disaster relief page provides a current list of designated areas. No action is needed for qualified taxpayers to take advantage of this relief.

Economic Impact Payment Catchup 

Some 50,000 spouses will receive their economic impact payment in the form of a check. In some cases, an individual’s payment was redirected to pay their husband’s or wife’s child support debt. Those who filed Form 8379, Injured Spouse Allocation with a recent tax return will receive their check in early- to mid-September. Those who have not filed Form 8379 will still receive their EIP check, but it is not yet known when to expect it. No action is required in either case.

Interest To Be Paid To Millions of Taxpayers

Individual taxpayers who filed their return by July 15 and were due a refund will receive an interest payment along with it. This applies to those who have received refunds in the past three months, or who are still waiting on their refunds. The interest is calculated from the original filing due date of April 15, and will be direct-deposited with the refund for those who use direct-deposit. Paper checks will be issued to others. Additionally, the interest is considered taxable income and recipients will receive a Form 1099-INT early next year. 

Guidance For Presidential Payroll Tax Memorandum

The IRS and Treasury Department have issued guidance implementing the August 8 Presidential Memorandum allowing employers to defer withholding and payment of an employee’s share of Social Security tax. The deferral generally applies to wages paid from September 1, 2020 through December 31, 2020, and only if the wages total less than $4,000 during a bi-weekly pay period. 

IRS Updates for May

Recent updates from the IRS include billing for unpaid tax return, changes to expenses, challenging a levy, withholding amounts, a strategic plan update, and updates on state and local income tax filing.

Billing for Unpaid Tax Returns

The IRS announced that they will be mailing forms CP14 and CP501 to taxpayers who have a balance owed left over after filing their taxes. There are many options to pay, to form a payment agreement or to offer a compromise amount. For more information on paying back taxes, check out the IRS original announcement, or make an appointment to speak with one of our tax consultants.

Changes to Expense Reporting

Move related vehicle expenses are no longer deductible, and “miscellaneous itemized deductions that are subject to the 2 percent of adjusted gross income floor” are no longer deductible either. Also in the announcement regarding expense reporting, the IRS reminded taxpayers that the mileage deductions are 54.5 cents per business mile, 18 cents per medical mile, and 14 cents per charitable mile.

Appealing a Wrongful Levy

The timeframe for appealing a wrongful levy has been increased from nine months to two years by the Tax Cuts and Jobs act of 2017. This appeal period does not cover people who feel they have been wrongfully audited but covers those who have prior claim to the property the IRS levied or confiscated. Read more at the link above.

Check Your Withholding Amounts

Changes in income, marital status, the amount of jobs you are working, or law changes all impact how much you need to have withheld from your paycheck. The IRS reminded taxpayers who work more than one job or have more than one wage earner in the home that they may need to check their withholding calculator.

Strategic Plan for the IRS

The IRS released its strategic plan for the next five years. Key points include that they want to be more service oriented, work towards all taxpayers being able to file and pay their taxes, and innovative enforcement of the tax code.

Local and State Tax Updates

If you followed the tax reform act last year, you heard about the reduction of the local tax deductions. The IRS released an update informing taxpayers that the $10,000 state and local tax deduction still stands, even if state tax agencies give taxpayers the option of getting tax credits through donations to state specified agencies.