New York, NY, January 8, 2020 — The Internal Revenue Service (IRS) officially accepts tax returns on Monday, January 27thth. Steven B. Zelin, CPA, Managing Member at Zelin & Associates CPA LLC, also known as The Singing CPA®, has some recommendations.
Watch your withholdings
Tax reform caused the amount of money withheld from paychecks to go down in 2018 for many taxpayers. That made their paychecks bigger, but it could result in smaller refund checks for many, and some might even end up owing tax when they file their tax returns.
The IRS has a tool on their website to assess whether your withholding is correct. If it’s not, you can make adjustments to your payroll withholding by filing a new Form W-4 with your employer. Estimated tax payments can prevent you from owing penalties and interest.
Tax Form Changes
The standard deductions will increase based on the federal law as follows:
- Single and married/registered domestic partner filers filing separately: $12,200
- Head of Household: $18,350
- Married/registered partners filing jointly and qualifying widow(er) with dependent child(ren) filers: $24,400
Schedule H – Changes to the Homeowner and Renter Property Tax Credits:
- Property tax credit increases to $1,200
- Schedule H federal Adjusted Gross Income (AGI) eligibility threshold for taxpayers under age 70 increases to $55,000
- Schedule H federal AGI eligibility threshold for taxpayers age 70 and older increases to $75,000
The Early Learning Tax Credit: The credit has been renamed “Keep Child Care Affordable Tax Credit” and the taxable income thresholds have changed to:
- Single, head of household, married/registered domestic partners filing separately on the same return: $150,000Married/registered domestic partners filing separately: $75,000
Schedule QCGI: The Eligible Qualified High Technology Company (QHTC) Capital Gain Investment Tax is applicable to individual income (D-40), franchise (D-20 and D-30), and fiduciary (D-41) tax returns filed after December 31, 2018. The tax on a capital gain from the sale or exchange of an investment in a DC QHTC shall be at the reduced rate of 3 percent if:
- The investment was made after March 11, 2015
- The investment was held by the investor for at least 24 continuous months
- At the time of the investment, the stock of the QHTC was not publicly traded
- The investment is in common or preferred stock of the QHTC
Other important areas to consider
Special rules for those without Social Security numbers:
If you’re required to file taxes but don’t have a Social Security number and aren’t eligible to get one, then the IRS issues what it calls individual taxpayer identification numbers (ITINs). These are the same as a Social Security number for tax purposes for certain nonresident aliens, as well as a set of resident aliens and dependents or spouses.
The critical thing about ITINs is that they expire. Those whose ITINs are due to expire should submit a renewal application now in order to avoid any future hassles.
New tax credits may apply to you:
- Identifying which tax credits apply to you can be a big help as you prepare to file your income tax return. It is important to consult with your CPA as you prepare to file your return.
Steven B. Zelin, CPA, The Singing CPA®, has produced several accounting related CDs including two that are tax related — The Singing CPA and No Accounting For the Holidays.
Mr. Zelin may be reached directly for further information at 646-678-4496 or Steven.firstname.lastname@example.org