2020 Limits on HSA Contributions

NSTPHealth Savings Account (HSA), Internal Revenue Service (IRS)

2020 limits on HSA Contributions are Issued

2020 Limits on HSA Contributions Are Issued The IRS in Rev. Proc. 2019-25 announced the annual inflation-adjusted limits on deductions for contributions to a health savings account (HSA) allowed for taxpayers with family coverage under a high-deductible health plan (HDHP) for calendar year 2020. Under Sec. 223, individuals who participate in an HDHP are permitted a deduction for contributions to HSAs set up to help pay their medical expenses. The contribution deduction limit is subject to an annual inflation adjustment. To be eligible to contribute to an HSA, an individual must participate in an HDHP, which is a health plan with an annual deductible that is not less than a certain limit each year and for which the annual out-of-pocket expenses, including deductibles, co-payments, and other amounts, but excluding premiums, do not exceed a certain limit each year (Sec. 223(c)). HSA contribution limits for 2020 For 2020, the annual limit on deductible contributions is $3,550 for individuals with self-only coverage under an HDHP (a $50 increase from 2019) and $7,100 for family coverage (a $100 increase from 2019). The limits on annual deductibles are also subject to annual inflation adjustments. For 2020, the lower limit on the annual deductible for … Read More

Home Office Deductions

NSTPInternal Revenue Service (IRS), Small Business Owner

Home office deductions

Home Office Deductions Small business owners may qualify for home office deductions that will help them save money on their taxes and benefit their bottom line. Taxpayers can take this deduction if they use a portion of their home exclusively, and on a regular basis, for any of the following: As the taxpayer’s main place of business. As a place of business where the taxpayer meets patients, clients or customers. The taxpayer must meet these people in the normal course of business. If it is a separate structure that is not attached to the taxpayer’s home. The taxpayer must use this structure in connection with their business A place where the taxpayer stores inventory or samples. This place must be the sole, fixed location of their business. Under certain circumstances, the structure where the taxpayer provides day care services. Deductible expenses for business use of a home include: Real estate taxes Mortgage interest Rent Casualty losses Utilities Insurance Depreciation Repairs and Maintenance Certain expenses are limited to the net income of the business. These are known as allocable expenses. They include things such as utilities, insurance, and depreciation. While allocable expenses cannot create a business loss, they can be carried … Read More

ASAP: Taxpayers should check withholding

NSTPInternal Revenue Service (IRS), Paycheck Checkup

ASAP: Taxpayers Should Check Withholding

ASAP: Taxpayers should check withholding All taxpayers should check their withholding – also known as doing a Paycheck Checkup – as soon as possible. They should do a checkup even if they did one last year. By checking their withholding, taxpayers can make sure enough is being taken out of their paychecks or other income to cover the tax owed. Here are some things taxpayers should know about withholding and why checking it is important: Taxpayers should check their withholding as early in the year as possible. If someone still has not done a Paycheck Checkup, there’s still time to get their withholding on track. They should do a checkup ASAP. Taxpayers should also check their withholding when life changes occur. These changes include things like: Marriage or divorce Birth or adoption of a child Purchase of a home Retirement Chapter 11 bankruptcy New job or loss of job Some taxable income is not subject to withholding. People with this income who also have income from a job may want to adjust the amount of tax their employer withholds from their paycheck. This includes income from things like: Interest Dividends Capital gains Self-employment and gig economy income IRA distributions, including … Read More

Great webinars from NSTP!

NSTPInternal Revenue Service (IRS), Webinars

Great webinars from NSTP!

Great webinars from NSTP! NSTP’s webinars are created with you in mind. Top tax educators provide exclusive material that you won’t find anywhere else! Check out these upcoming webinars: TT. Passive Activity Losses: Complexity Untangled Part III & Part IV    4CE    June 14   10am-2pm PDT Instructor: Kelly H. Myers, MBA, Tax Consultant This course takes the Tax Professional with a basic understanding of the Passive Activity Loss (PAL) rules under IRC 469 into the advanced aspects including related Code sections that often coexist. While PAL has been around since 1986 it is often minimally understood and misapplied. There are additional components added over the years that will be addressed including Real Estate Professional (RE Pro), grouping, Net Investment Income Tax, and the Pass-through Deduction. To register or for more course details, please visit the NSTP website. OO. The Ugly 1040   4CE    June 18   10am-2pm PDT Instructor: Paul La Monaca, CPA, MST This course reviews federal income tax issues pertaining to individual taxpayers. It discusses the 3 main goals of good tax planning dealing with exclusion and deferral provisions and preferential rates for long term capital gain transactions. This course also addresses various individual tax provisions changed as a result … Read More

IRS Expands §199A FAQs

NSTP199A, Internal Revenue Service (IRS)

IRS Expands Section 199A FAQs

IRS expands §199A FAQs. The IRS has published an updated set of frequently asked questions (FAQs) on their website related to the §199A qualified business income deduction. The April 11, 2019 update expanded the FAQ from 12 questions to 33 and saved what many will see as the bombshell for the last question. Many of the answers will not be surprising at all to most practitioners. One will likely cause some who had elected to use the proposed regulations to question whether that accomplished what they though it did, but the IRS position is one that many commentators had already suggested might be the position. And one update may affect a large number of taxpayers, as the author of the FAQ has written that the language of §199A(c)(3)(A) allows the IRS to force a double deduction for an S corporation shareholder’s self-employed health insurance deduction. The most surprising answer for many is found in question and answer 33, which provides: Q33. Health insurance premiums paid by an S-Corporation for greater than 2% shareholders reduce qualified business income (QBI) at the entity level by reducing the ordinary income used to compute allocable QBI. If I take the self-employed health insurance deduction … Read More