NSTP Federal Tax Update & Review Courses

NSTPInternal Revenue Service (IRS)

NSTP Federal Tax Update & Review Course

NSTP Federal Tax Update & Review Courses

For the information you need this upcoming tax season, whether you are setting up appointments for 2019 tax planning or preparing for the 2020 tax filing season, the NSTP Federal Tax Update And Review Courses will get you ready.

The sessions will include the information you need to help your clients prepare for filing their 2019 tax returns. And, as always, the Federal Tax Update and Review courses all include a networking lunch in your registration fee.

Following is a sampling of the topics we will be covering:

Interest exclusion for higher education. For 2020, the phase-out for excluding interest on U.S. savings bonds redeemed to pay qualified higher education expenses will begin at modified adjusted gross income (MAGI) above $82,350 ($123,550 on a joint return). For 2019, the corresponding figures were $81,100 and $121,600.

Qualified transportation fringe benefits. For 2020, an employee will be able to exclude up to $270 (up from $265 for 2019) a month for qualified parking expenses, and up to $270 a month (up from $265 for 2019) of the combined value of transit passes and transportation in a commuter highway vehicle.

Lifetime learning credit phaseout. For 2020, a taxpayer’s MAGI in excess of $59,000 (up from $58,000 for 2019), $118,000 for a joint return (up from $116,000 in 2019) will be used to determine the reduction under Code Sec. 25A(d)(2) in the amount of the Lifetime Learning Credit otherwise allowable under Code Sec. 25A(a)(2).

Adoption credit. For 2020, the credit allowed for an adoption of a child with special needs will be $14,300 (up from $14,080 for 2019). The maximum credit allowed for other adoptions will be the amount of qualified adoption expenses up to $14,300 (up from $14,080 for 2019).

For 2020, the credit will begin to phase out for taxpayers with MAGI in excess of $214,520 (up from $211,160 for 2019). The phaseout will be complete if MAGI is $254,520 (up from $251,160 for 2019).

Adoption exclusion. For 2020, the amount that can be excluded from an employee’s gross income for the adoption of a child with special needs will be $14,300 (up from $14,080 for 2019). For 2020, the maximum amount that can be excluded from an employee’s gross income for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program for other adoptions by the employee will be $14,300 (up from $14,080 for 2019).

For 2020, the amount excludable from an employee’s gross income will begin to phase out for taxpayers with MAGI in excess of $214,520 (up from $211,160 for 2019). The phaseout will be complete if MAGI is $254,520 (up from $251,160 for 2019).

MAGI limits for making deductible contributions by active plan participants to traditional IRAs. In general, an individual who isn’t an active participant in certain employer-sponsored retirement plans, and whose spouse isn’t an active participant, may make an annual deductible cash contribution to an IRA up to the lesser of: (1) an inflation-adjusted statutory dollar limit, or (2) 100% of the compensation that’s includible in his or her gross income for that year. For 2020, the statutory dollar limit is $6,000 (same as for 2019), plus an additional $1,000 for those age 50 or older. If the individual (or his or her spouse) is an active plan participant, the deduction phases out over a specified dollar range of MAGI.

For taxpayers filing joint returns, the otherwise allowable deductible contribution will be phased out ratably for 2020 for MAGI between $104,000 and $124,000 (up from $103,000 and $123,000 for 2019).

For 2020, for single taxpayers and heads of household, the otherwise allowable deductible contribution will be phased out ratably for MAGI between $65,000 and $75,000 (up from $64,000 and $74,000 for 2019). For married taxpayers filing separate returns, the otherwise allowable deductible contribution will be phased out ratably for MAGI between $0 and $10,000 (same as for 2019).

For a married taxpayer who is not an active plan participant but whose spouse is such a participant, the otherwise allowable deductible contribution will be phased out ratably for 2020 for MAGI between $196,000 and $206,000 (up from between $193,000 and $203,000 for 2019).

MAGI limits for making contributions to Roth IRAs. Individuals may make nondeductible contributions to a Roth IRA, subject to the overall limit on IRA contributions. The maximum annual contribution that can be made to a Roth IRA is phased out for taxpayers with MAGI over certain levels for the tax year. For taxpayers filing joint returns, the otherwise allowable contributions to a Roth IRA will be phased out ratably for 2020 for MAGI between $196,000 and $206,000 (up from $193,000 and $203,000 for 2019). For single taxpayers and heads of household, it will be phased out ratably for MAGI between $124,000 and $139,000 (up from $122,000 and $137,000 for 2019). For married taxpayers filing separate returns, the otherwise allowable contribution will continue to be phased out ratably for MAGI between $0 and $10,000 (same as for 2019).

Saver’s credit. For tax years beginning in 2020, an eligible lower-income taxpayer can claim a nonrefundable tax credit for the applicable percentage (50%, 20%, or 10%, depending on filing status and AGI) of up to $2,000 of his or her qualified retirement savings contributions, as follows:

  • Joint filers: $0 to $39,000, 50%; $39,000 to $42,500, 20%; and $42,500 to $65,000, 10% (no credit if AGI is above $65,000).
  • Heads of households: $0 to $29,250, 50%; $29,250 to $31,875, 20%; and $31,875 to $48,750, 10% (no credit if AGI is above $48,750).
  • All other filers: $0 to $19,500, 50%; $19,500 to $21,250, 20%; and $21,250 to $32,500, 10% (no credit if AGI is above $32,500).

By way of comparison, for tax years beginning in 2019, an eligible lower-income taxpayer can claim a nonrefundable tax credit for the applicable percentage (50%, 20%, or 10%, depending on filing status and AGI) of up to $2,000 of his or her qualified retirement savings contributions, as follows:

  • Joint filers: $0 to $38,500, 50%; $38,500 to $41,500, 20%; and $41,500 to $64,000, 10% (no credit if AGI is above $64,000).
  • Heads of households: $0 to $28,875, 50%; $28,875 to $31,125, 20%; and $31,125 to $48,000, 10% (no credit if AGI is above $48,000).

All other filers: $0 to $19,250, 50%; $19,250 to $20,750, 20%; and $20,750 to $32,000, 10% (no credit if AGI is above $32,000).

NSTP Federal Tax Update And Review Courses will get you ready for the 2019 tax season. Register today!