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Taxpayers can take steps now to Get Ready to file their taxes in 2020

There are steps people can take now to make sure their tax filing experience goes smoothly next year. First, they can visit the Get Ready page on IRS.gov to find out more.

Here are a few other things people can do now:

Check their withholding and make any adjustments soon
Since most employees typically only have a few pay dates left this year, checking their withholding soon is especially important. It’s even more important for those who:

  • Received a smaller refund than expected after filing their 2018 taxes this year.
  • Owed an unexpected tax bill last year.
  • Experienced personal or financial changes that might change their tax liability.

Some people may owe an unexpected tax bill when they file their 2019 tax return next year. To avoid this kind of surprise, taxpayers should use the Tax Withholding Estimator to perform a quick paycheck or pension income checkup. Doing so helps them decide if they need to adjust their withholding or make estimated or additional tax payments now. 

Gather documents
Everyone should come up with a recordkeeping system. Whether it’s electronic or paper, they should use a system to keep all important information in one place. Having all needed documents on hand before they prepare their return helps them file a complete and accurate tax return. This includes:

  • Their 2018 tax return.
  • Forms W-2 from employers.
  • Forms 1099 from banks and other payers.
  • Forms 1095-A from the marketplace for those claiming the premium tax credit.

Confirm mailing and email addresses
To make sure these forms make it to the taxpayer on time, people should confirm now that each employer, bank and other payer has the taxpayer’s current mailing address or email address. Typically, forms start arriving by mail or are available online in January.

People should keep copies of tax returns and all supporting documents for at least three years. Also, taxpayers using a software product for the first time may need the adjusted gross income amount from their 2018 return to validate their electronically filed 2019 return.

File electronically and choose direct deposit for a faster refund
Errors delay refunds. The easiest way to avoid them is to file electronically. Using tax preparation software is the best and simplest way to file a complete and accurate tax return. Tax prep software guides taxpayers through the process and does all the math. In fact, taxpayers can start looking into their filing options now.

Another way to speed thing up is to use direct deposit. Combining direct deposit with electronic filing is the fastest way to get a refund. With direct deposit, a refund goes directly into a taxpayer’s bank account. They don’t need to worry about a lost, stolen or undeliverable refund check.

 

401(k) contribution limit increases to $19,500 for 2020; catch-up limit rises to $6,500

WASHINGTON — The Internal Revenue Service today announced that employees in 401(k) plans will be able to contribute up to $19,500 next year.

The IRS announced this and other changes in Notice 2019-59, posted today on IRS.gov. This guidance provides cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020.

Highlights of changes for 2020

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,000 to $19,500.

The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500.

The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019.

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver’s Credit all increased for 2020.

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his or her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his or her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2020:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $65,000 to $75,000, up from $64,000 to $74,000.
  • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $104,000 to $124,000, up from $103,000 to $123,000.
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $196,000 and $206,000, up from $193,000 and $203,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is $124,000 to $139,000 for singles and heads of household, up from $122,000 to $137,000. For married couples filing jointly, the income phase-out range is $196,000 to $206,000, up from $193,000 to $203,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $65,000 for married couples filing jointly, up from $64,000; $48,750 for heads of household, up from $48,000; and $32,500 for singles and married individuals filing separately, up from $32,000.

Key limit remains unchanged

The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

Details on these and other retirement-related cost-of-living adjustments for 2020 are in Notice 2019-59, available on IRS.gov.

IRS offers videos on wide range of tax topics in American Sign Language

Pay Your Taxes by Debit or Credit Card

 

You can pay by internet, phone, or mobile device whether you e-file, paper file or are responding to a bill or notice. It's safe and secure - the IRS uses standard service providers and business/commercial card networks, and your information is used solely to process your payment.

Fees and Information

  • Your payment will be processed by a payment processor who will charge a processing fee.
  • The fees vary by service provider and may be tax deductible.
  • No part of the service fee goes to the IRS.
  • Your information is used solely to process your payment.

Choose your Payment Processor

Processor Debit Card Credit Card Digital Wallet
PayUSAtax.com
(WorldPay US, Inc.)
844-729-8298 Payment
855-508-0159 Live Operator
844-825-8729 Service

International Non Toll-Free
1-615-550-1491 Payment
1-615-942-1141 Live Operator
1-615-550-1492 Service

$2.55 flat fee

Visa

MasterCard

Discover

STAR

Pulse

Accel

NYCE

1.96% fee,
Minimum fee $2.69

Visa

MasterCard

Discover

Amex

See debit or credit card fees

 

Visa Checkout Includes:
Samsung PayAndroid Pay

 

MasterPass

PayPal logo

American Express Checkout

 

Pay1040.com
(Link2GovCorporation)
888-729-1040 Payment
888-658-5465 Service

International Non Toll-Free
1-501-748-8507 Live Operator

$2.58 flat fee
 

Visa Checkout

MasterCard

Discover

STAR

Pulse

NYCE

1.87% fee,
Minimum fee $2.59

Visa

MasterCard

Discover

Amex

See debit or credit card fees

 

Visa Checkout

MasterPass

American Express Checkout

OfficialPayments.com/fed
(Official Payments)
888-872-9829 Payment
877-754-4420 Live Operator
877-754-4413 Service

International Non Toll-Free
1-334-521-3842 Payment

$2.00 flat fee
($3.95 flat fee for
payments over $1,000)

Visa

MasterCard

Discover

STAR

Pulse

NYCE

1.99% fee,
Minimum fee $2.50

Visa

MasterCard

Discover

Amex

See debit or credit card fees

 

Visa Checkout

American Express Checkout

Paying with your Debit or Credit Card? Understand that:

  • Fees differ from those in the table above when you choose the integrated IRS e-file and e-pay option. View your options.
  • Not all IRS tax forms are eligible for payment by credit or debit card, and there are limits on how often you can make individual and business payments. Visit the frequency limit table by type of tax payment for details.
  • High balance payments of $100,000+ may require coordination with your provider.
  • You usually can’t cancel payments.
  • You can’t make Federal Tax Deposits.
  • You can't get an immediate release of a Federal Tax Lien. Refer to Publication 1468, Guidelines for Processing Notice of Federal Tax Lien Documents, for payment options.
  • This form of payment eliminates your need for a voucher.
  • Your card statement will list this payment as "United States Treasury Tax Payment." The convenience fee paid to your provider will be listed as "Tax Payment Convenience Fee" or something similar.
    • For business tax types, the fee is a deductible business expense.
  • If you overpaid, IRS will refund it after the return is processed, excepting offsets or debt on your account.

For more information on other electronic payment options, please visit the Payments Home Page.

 

Tax Withholding Estimator HOW TO CHECK YOUR TAXES NOW TO AVOID SURPRISES LATER

Tax Withholding Estimator HOW TO CHECK YOUR TAXES NOW TO AVOID SURPRISES LATER Thursday, September 19, 2019 2 pm ( Eastern); 1 pm (Central); 12 pm (Mountain); 11 am (Arizona); 11 am (Pacific); 10 am (Alaska); 8 am (Hawaii) This free 120-minute webinar is open to ALL Life changes. Events such as marriage, divorce, a home purchase, new job, retirement, birth, adoption or tax law changes can affect your taxes. You should return to the Tax Withholding Estimator to check your situation again for 2019. The Tax Withholding Estimator will help make sure you have the right amount of tax withheld from your paychecks or you're making the right estimated tax payments. You should attend this webinar if: You faced an unexpected tax bill or a penalty when you filed this year. You made withholding adjustments in 2018. You had a major life change. You need to check your withholding. You don’t know how to use the Withholding Estimator. You want to know why you should do a Paycheck Checkup. Plus a live Q & A Copy and open the link below in a new window to Register for the Webinar https://www.webcaster4.com/Webcast/Page/1148/31489 Contact David with any questions or assistance 904.406.9364

IRS Letter CP2000: Proposed Changes to Your Tax Return

Here's a short video by IRS to assist you with responding to IRS Letter CP2000: Proposed Changes to Your Tax Return. Don't panic just follow instructions on the letter or contact our office if you need further assistance. Click on link below.

https://youtu.be/3R0POvqL3Ko

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Private Debt Collection

The IRS began a new private collection program of certain overdue federal tax debts selecting four contractors to implement it. The groups are: CBE Group of Cedar Falls, Iowa; Conserve of Fairport, N.Y.; Performant of Livermore, Calif.; and Pioneer of Horseheads, N.Y. The taxpayer’s account will only be assigned to one of these agencies, never to all four. No other private group is authorized to represent the IRS.
The IRS will always notify a taxpayer before transferring their account to a private collection agency (PCA). The IRS will send a letter to the taxpayer and their tax representative informing them that their account is being assigned to a PCA and giving the name and contact information for the PCA. This mailing will include a copy of Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency (PDF).

Contact our office for a free consultation and find out what your options are at (904)0406-9364 or via our website.

IRS Debt Settlement: Success Stories

IRS Offer in Compromise results in $29,789.00 in savings

Through the IRS Offer in Compromise process we helped our client by paying 17.81% on the dollar of a tax bill totaling $36,355.00. This client filed her tax returns as a self-employed person and failed to take advantage of allowable deductions which resulted in more taxes than she was actually responsible for. She had mounting medical bills as a result of a car accident and getting further behind. After looking over her case we determined she would be a good candidate for an Offer in Compromise.

Internal Revenue Service accepted her offer after several months of negotiations. Eleven months later, IRS accepted our Offer in Compromise of $6476.00 and agreed to settle. We set the client up on lump sum plan, paying $856.00 20% down and five payments of $685 until her account is paid in full. All Federal Tax Liens will be released once paid in full.

IRS Offer in Compromise results in $30,126.00 in savings.

IRS Offer in Compromise helped our client who came to us with a tax bill of $32,150.00. The gentleman hadn’t filed his 2014 return, nor his form 2290 Highway Use Tax form. Once we filed those forms and submitted his Offer in Compromise, IRS accepted our offer in 9 months. Nine months later the IRS accepted our Offer in Compromise of $2,024. He was in unbelief; he sent a picture of the letter with his phone. Previous to his offer being accepted IRS levied his military pension, his sole source of income. We immediately constructed a letter informing IRS that according to their regulations all collections activities were supposed to stop, they immediately reinstated his retirement benefits. We set the client up on a 24 month installment plan paying $84.33 per month until he pays in full.

Here’s what taxpayers should know about the new IRS Tax Withholding Estimator

Taxpayers who haven’t yet checked their withholding this year should do so ASAP. All taxpayers can do this by using the new mobile-friendly Tax Withholding Estimator. This new tool can be used by workers, as well as retirees, self-employed individuals and other taxpayers. It’s a user-friendly step-by-step tool to help taxpayers effectively adjust the amount of income tax they have withheld from wages and pension payments. This helps them make sure that they are paying the right amount of tax as they earn it throughout the year.

Here are some things people should know about the new tool:

Using the tool to do a Paycheck Checkup can help taxpayers avoid an unexpected year-end tax bill and possibly a penalty when they file their 2019 tax return next year.

The new tool allows taxpayers to separately enter pensions and other sources of income. Taxpayers who receive pension income can use the results from the estimator to complete a Form W-4P. They then give this form to their payer.

It’s important for anyone who had an unexpected tax bill or a penalty when they filed this year to do a checkup.

It’s also an important step for those who made withholding adjustments in 2018 or had a major life change.

The new Tax Withholding Estimator makes it easier to enter wages and withholding for each job held by the taxpayer and their spouse.

At the end of the process, the tool makes specific withholding recommendations for each job and spouse. It also clearly explains what the taxpayer should do next.

Those most likely to owe tax because they’ve had too little tax withheld include:
Those who itemized in the past but now take the increased standard deduction.
Two-wage-earner households.
Employees with nonwage sources of income.
Those with complex tax situations.
Share this tip on social media -- #IRSTaxTip: Here’s what taxpayers should know about the new IRS Tax Withholding Estimator. https://go.usa.gov/xySzw