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Taxpayers should find out if they can benefit from the earned income tax credit

The earned income tax credit benefits working individual and families with low to moderate incomes.  EITC can lower a taxpqyer's taxes, and even result in a refund.

To take advantage of this credit, taxpayers must file a tax return and claim the credit.  They should do so even if they don't owe tax and aren't required to file.   EITC can be owrth up to $6,557 for tax year 2019.

Taxpayers should first find out if they qualify for the credit.  Here are things for  taxpayers to consider.

  • Major life events may cause taxpayers to move in and out of eligibility for the credit from year to year.  Because of this, it's a good idea for people to see if they qualify.
  • Eligible taxpayers must have earned income form working for an employer or from running or owning a business or farm.  They must also meet basic rules.
  • Taxpayers without children may also qualify for EITC.
  • Taxpayers can't claim EITC if their filing status is married filing separately.
  • Taxpayers must have valid Social Security numbers for themselves, their spouse, and any qualifying child listed for the credit on their tax return.

Before claiming the credit, taxpayers should also learn the EITC rules:

  • Taxpayes may be married or unmarried.  If married, they must file a joint return.
  • Those who claim the credit without a qualifying child umust meet rules for age, residency and dependency.
  • For a child to qualify, they must live with the taxpayer for more than six months of the year.
  • In addition, the child must meet rules for age, relationship, support, citzenship and joint return.
  • Special rules apply for members of the U.S. military serving in a combat zone.

Taxpayers can use the EITC Assistant to determine if they're eligible for the credit.  This tool also estimates the amount of the taxpayer's criedit.  Assistant is available in English or

Go to IRS.GOV and type EITC Assistant in search window.

IRS and Treasury issue guidance for students with discharged student loans and their creditors

Rev Procedure 2020-11     

This revenue procedure establishes a safe harbor extending the relief to additional taxpayers who took out Federal or private student loans to finance attendance at a nonprofit or for-profit school.   

     Under the Higher Education Act of 1965 (HEA), the Closed School discharge process allows the Department of Education to discharge a Federal student loan obtained by a student, or by a parent on behalf of a student who was attending a school at the time it closed or who withdrew from the school within a certain period prior to the closing date.  The HEA provides statutory exclusions from gross income for Federal student loans discharged unde the Closed School discharge process.  

 

IRS Announces Filing Season Open Dates

The IRS officially announces filing season open dates for Individual and Business returns.

. Business (1065, 1120, 1120S, 1041, 990) Tuesday January 7, 2020

. Individual (1040) Monday January 27, 2020.

At these times IRS will start processing all submitted returns and providing acknowledgements

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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