Congressional action to mitigate the COVID economic crisis gnarled the tax code beyond anyone’s wildest imagination. During the filing season the goal lines were moved by creating a July 15th filing deadline for some filers and for some payments. Primarily federal individual filers with an April 15th deadline and estimates payments typically due April 15th and June 15th now have July 15th deadlines. The federal filing deadline for partnerships or S-Corps remained March 15th. Most states followed the federal lead. VA extended the payment deadline to June 1st. NH extended the filing deadline to June 15th.
The US Treasury scrambled to put policies in place. Economic Impact Payments (EIP) were issued to taxpayers in the form of direct deposits, or checks, or prepaid debit cards with sudden and little notice. Refer to IRS.gov/Coronavirus for more information and FAQs about stimulus payments. MetaBank who issued the prepaid VISA debit cards through MoneyNetwork hosts an EIPCard.com website to help with questions.
The internet contributed to contorting tax procedures and code changes. The administration reversed its initial decrees regarding the 2nd quarter estimated payment deadline; eventually extending the traditional second quarter payment from June 15th to July 15th. The administration reversed its resolve that allowed deceased recipients of stimulus money to keep the money. The latest Treasury declaration is that payments should be returned to the government. Stay tuned as this issue continues to evolve.
Tax law today is not the stake in the ground that it once was.
And, that is the point. Tax law today is not the stake in the ground that it once was. The Secure Act, signed into law on December 22, 2019, extended the start of IRA requirement minimum distributions (RMD) from age 70½ to age 72. The CARES Act, signed into law just 90 days later, suspended RMD requirements for all taxpayers in 2020. Traditionally borrowing from IRAs was forbidden. In 2020, taxpayers can borrow from IRAs, waive the 10% penalty and take three years to replace the money.The new tax law that allows all taxpayers a deduction up to $300 for charitable donations, starting in tax year 2020, comes with qualifying criteria and taxpayer mandates. The $300 is not automatic.
With all these changes, taxpayers need to be on heightened alert for tax schemes. The IRS urges taxpayers to be on the lookout for scam artists trying to use the economic impact payments as cover for schemes to steal personal information and money. The IRS will not call, text, or email taxpayers. Nor will the IRS contact taxpayers on social media asking for personal or bank account information. Beware of emails with attachments or links claiming to have special information about economic impact payments or refunds.
Tax preparation is an unregulated industry. Anyone can visit IRS.gov to obtain a free Practitioner Tax Identification Number. Taxpayers are wise to choose professional help from a credentialed preparer who maintains membership in an active nationally recognized tax association. Enrolled agents, (EAs), are licensed by the US Treasury with unlimited practice rights to represent taxpayers in matters of exam, appeals, collections and non-filing. EAs belonging to NAEA, the National Association of Enrolled Agents, must satisfy an annual 30 hour education requirement. Other recent changes to consider include student loan payments, unemployment eligibility and new business tax credits. Taxpayers who choose to hire someone for tax assistance are wise to be choosey.
Enrolled agents, (EAs), are licensed by the US Treasury with unlimited practice rights to represent taxpayers in matters of exam, appeals, collections and non-filing. EAs belonging to NAEA, the National Association of Enrolled Agents, must satisfy an annual 30 hour education requirement.
MaSEA The Massachusetts Society of Enrolled Agents is a professional community of leading tax experts which provides education, support and mentorship for Enrolled Agents and other tax professionals. Tax practitioners whether self employed or employees of a firm, who are looking to grow both professionally and personally will find many resources and support for their profession. We provide benefits to members through continuing education, social dinners, tax round tables, and online forums. Our networking opportunities can help you enhance your career. Join us by becoming a member today!
The Landy Agency is a corporate sponsor of the MaSEA and is a national leader in providing non-medical, professional liability and cybercrime insurance for accountants, attorneys, and real estate professionals. John can be reached at 781‐292‐5417 or johnt@landy.com. Visit www.landy.com for more information.
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