January 2020 Email Blast
Yippee! It’s Tax Time
There have been many interesting changes in the Federal and Oregon tax laws. Here are the more common ones:
On Dec 20, 2019, President Trump signed a bill extending tax treatments which had expired. These have retroactively been extended effective from Jan 1, 2018 to Dec 31, 2020. Some of the more common “extenders” may make it beneficial to amend your 2018 tax returns.
Deductions and tax credits:
If you paid mortgage insurance premiums in 2018, you may benefit by amending your tax returns to take the deduction on your federal and Oregon returns.
Non business Energy Property Credit was extended back to 2018. If you installed new exterior doors and/or windows, insulation, heat pumps, furnaces, central air conditioners or water heaters which improved the energy efficiency of your home, there is up to a $500 tax credit available. This is a lifetime credit so it must be reduced by credits taken in prior years.
Alternative refueling property credit (charging station for an electric car) and 2-wheeled plug-in electric vehicle credit
Tuition and fees deduction
Personal residence cancellation of debt exclusion
Medical expense floor stays at 7.5% for 2019
Repeal of Kiddie Tax at Trust Rates (can elect retroactive for 2018)
Extension of deductions and credits due to end in 2019 extended to 2020:
Employer Credit for paid family and medical leave (with written plan)
Changes in IRAs and Retirement Plans:
Required Minimum Distribution (RMD) age increased from 70.5 to 72 (for individuals who attain age 70.5 after December 31, 2019.
Repeal of maximum age for traditional IRA Contributions (formerly contributions could not be made for any year in which the taxpayer was age 70 or older by the end of the year)
Inherited IRAs and other Defined Contribution Plans when the deceased was required to make RMDs are required to be completely paid out within 10 years after the year of the owner’s death (with some exceptions). Before, the pay-out could be over the lifetime of the beneficiary.
Types of compensation for making IRA contributions now include taxable non-tuition fellowships and stipend payment and non-taxable difficulty of care payments.
2020 Mileage Rates
Business standard rate $.575 per mile
Medical rate $.17 per mile
Charitable rate $.14 per mile
Health Insurance Requirements
The IRS penalty for not having health insurance ended December 31, 2018. The IRS has extended the time insurance companies have to send out Forms 1095 B or C until February 28th. Those forms are not required to file your tax return, since the penalty has been eliminated. We do encourage you to keep a copy of the form in your tax file. However, if you purchase your insurance through the Health Insurance Marketplace (Obamacare), you will still need Form 1095-A to file your taxes.
New W-4 Employee Withholding Forms
The IRS and Oregon have new W-4 forms for 2020. If you found you had taxes due on April 15th or your personal circumstances have changed (marital status, dependents, income) we encourage you to fill out the new forms. The forms can be found on-line or through your payroll department at work.
2019 Oregon Surplus Credit “Kicker”
The “kicker” is a refund of the taxes paid on your 2018 Oregon tax return. It’s the highest it’s ever been, 17.171%. You will have needed to file a 2018 Oregon tax return to qualify for this “kicker” on your 2019 tax return.
Do you have virtual currency?
You may not be aware that virtual currency transactions are taxable since you do not get an annual tax document. The 2019 Form 1040 now has a new question, “At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?” The IRS has become very aggressive in tracking down sale transactions and will assess penalties for fraud for not reporting these transactions.
Come in early to file your tax returns!
The IRS has increased the minimum penalty for not filing!
New Share File Pro Portal is here!
We will no longer exchange sensitive documents via email. The Share File Pro Portal easily uploads documents from your computer files or file storage on your device. If you are an active client and missed the activation email we sent in December, please contact our office to receive a new activation email, then simply enter a password. Inside the secure portal, you will find your 2019 Tax Organizer. Using a computer, complete your organizer, and as an incentive, we are offering a $20 discount off your invoice. The portal has many other features such as:
MESSENGER, you may communicate with your Preparer.
PROFILE, you do not need to complete it, we have your information.
Password resets, need assistance?
AccounTax of Oregon, Inc.
8050 SW Pfaffle St. #110
Tigard, Or 97223