As we know, the beginning of this year is very tough for the economy.
Now that we’re thinking about the 2020 tax season, taxpayers — and their experts — should proactively recognize several of the problems they’re likely to encounter with popular tax concerns.
Although it has been more than a year after the Tax Cuts and Jobs Act came into force in full, many people are still somewhat unsure how these reforms will affect them. The 2020 tax season may be a season for us to see old challenges reemerge and a host of new issues arise.
Here, Florida Tax Attorney has listed some of the popular tax issues of 2020 that you should all be conscious of.
Federal Referendum Results:
November’s presidential and congressional votes will be the biggest story in 2020. Changes in the White House or Senate party will not go into effect until 2021, so a big upset in the status quo may have consequences for changes to the Tax Cuts and Jobs Act (TCJA) that were overwhelmingly approved in 2017 along party lines.
Should Democrats win control of the Senate and the White House, some aspects of the TCJA, including the corporate and long-term capital gains tax thresholds, could be aimed for reform. Moreover, some Democratic presidential candidates have called for more support for hospitals, housing, and education, which could result in new taxes or rises in those forms of taxation.
On the other hand, could Republicans win a majority in the House of Representatives and maintain control of the Senate and the White House, further tax reforms, such as the newly announced 10 percent middle-class tax reform proposed by President Trump, may occur.
It sounds dumb, but 1 in 5 people either do not file their taxes on time or do not submit them at all. This is a continuing problem, one tax preparers should be ready for next year; but, as taxpayers continue to negotiate the seas of a new tax code, the intricacies and problems created by the Tax Cuts and Jobs Act make filing late an ever more frequent phenomenon.
Failure to file on time will result in late penalties for your customers, so obtaining ahead of the competition soon, hiring the assistance needed, and now automating processes will help keep track of customer returns and ensure they are filed on point.
HSA Contribution Restrictions Shifts:
Medical savings funds are also having a modest increase this year, in addition to increasing the amount of money people will apply to qualified retirement programs. The amendments are as described for those with high-deductible plans that count under HSA regulations:
- Coverage for self-only: $3,500 now (up from $3,450 in 2018); plus,
- Coverage for families: $7,000 today (up from $6,900 in 2018).
Again, these minor changes would not make anyone wealthy, but this April 2020 is worth mentioning and might create some uncertainty.
Again, another one that seems dumb, but more and more individuals work for numerous revenue sources between daily careers, side hustles, rental markets, and passive income. You could have a client who operates a nine-to-five career owns a graphic design agency, and has a detached short-term rental studio that she uses.
And be clear that people may have multiple sources of income that will help you report all their income accurately and help them avoid any penalties. Be sure to ask many questions about revenue streams and emphasize the importance of trying to report this income to your customers.
Alimony Deduction Misunderstanding:
Another one of the Tax Cuts and Jobs Act reforms that began last year is the reduction of the alimony allowance. This suggests that it would not be available for alimony fees related to any divorce or settlement arrangement rendered this year or afterward. This is a very big move for some taxpayers and might cost thousands of dollars.
THE Reduction OF THE Citizen FEDERAL MANDATE Charge:
For taxpayers who did not have comprehensive coverage who did not apply for an allowance under the Affordable Care Act, the individual mandate requirement or joint contribution reimbursement applied. A citizen was expected to pay a levy at the end of the year alongside his tax benefit without health care or allowance.
It’s time to pack up your 2018 returns as we continue to get through the last month of Q3 of 2019 and start planning for the improvements that are heading for 2019. Being aware of these 8 popular tax issues facing tax preparers next year will make you feel secure going into the 2020 tax season and make you support your tax clients with the best service is complete.
Errors concerning tax forms
It is incredible how many individuals make clear mistakes on their tax returns, which leads to processing delays which can potentially cause IRS auditors to mark their returns.
Improper Social Security numbers, wrong bank account details, absence of proper signatures, and insufficient information are the most common tax form mistakes.
LAW OFFICE OF MARY E. KING, P.L. Attorney and Counselor at Law always a good option for you. And our Florida Tax Attorney here to support! If you need help with either of these basic tax problems or have any tax concerns or problems for yourself or any customers, we will look into the issues and address them by calling me at 941-906-7585.