401(K) Contribution Limit Increased

NSTPInternal Revenue Service (IRS)

401(K) Contribution Increased

401(K) contribution limit increased to $19,500 for 2020; catch-up limit has risen to $6,500. The Internal Revenue Service has 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 … Read More

Tax Resources for Military Personnel

NSTPInternal Revenue Service (IRS)

Tax Resources for Military Personnel

Tax Resources for Military Personnel When it comes to taxes, members of the military often have unique circumstances. IRS.gov has info on several topics that affect current and former military personnel, as well as their families. Here are resources where people can go to find more information. Tax Information for Members of the Military is the main page on IRS.gov where people can go to find links to helpful info, resources and services. A taxpayer’s military status affects whether they are eligible for certain benefits. Taxpayers can use IRS.gov to check their eligibility for military tax benefits. Qualifying employers include the Armed Forces, uniformed services and support organizations. There are rules specific to those who serve in combat zones. These taxpayers and their families can find out more on the Tax Exclusion for Combat Service. They may also want to see if special EITC rules may apply that could lead to a larger refund. They can also find out the rules on notifying the IRS by email if they are serving in a combat zone. The Armed Forces' Tax Guide is a comprehensive publication with info for military members. This includes: Special rules for military personnel serving abroad including deadline extensions Unreimbursed moving expenses Reserve … Read More

Tax Guidance Regarding Family Members Working for Each Other Provided by IRS

NSTPInternal Revenue Service (IRS)

Tax Guidance Regarding Family Members Working for Each Other

Tax Guidance Regarding Family Members Working for Each Other Provided by IRS IRS Fact Sheet FS 2019-14, Tax treatment for family members working in the family business In a Fact Sheet and in its latest e-News for Small Business newsletter, IRS has set out tax guidance regarding family members working for each other. Both spouses carrying on the trade or business. If spouses carry on a business together and share in the profits and losses, they may be partners even if they do not have a formal partnership agreement. In that case, they should report income or loss from the business on Form 1065. They should not report the income on a Schedule C (Form 1040) in the name of one spouse as a sole proprietor. However, the spouses can elect to treat the business as joint venture instead of as a partnership by making a qualified joint venture election. Qualified joint venture. Spouses may elect treatment as a qualified joint venture instead of a partnership. A qualified joint venture conducts a trade or business where: The only members are a married couple who file a joint return; Both spouses materially participate in the trade or business; and Both spouses elect not … Read More

Drought-Affected Farmers and Ranchers Have Extra Time to Sell Livestock

NSTPInternal Revenue Service (IRS)

Drought-Affected Farmers, Ranches Have More Time To Sell Livestock

Drought-Affected Farmers and Ranchers Have Extra Time to Sell Livestock Drought can be devastating to farmers and ranchers. Those who were forced to sell livestock due to drought may get extra time to replace the livestock. They may also have more time to defer tax on any gains from the forced sales. Here are some facts to help farmers understand how the deferral works and if they are eligible. The one-year extension gives eligible farmers and ranchers until the end of the tax year after the first drought-free year to replace the sold livestock. The farmer or rancher must be in an applicable region. An applicable region is a county designated as eligible for federal assistance, as well as counties contiguous to that county. The farmer’s county, parish, city or district included in the applicable region must be listed as suffering exceptional, extreme or severe drought conditions by the National Drought Mitigation Center. All or part of 32 states, plus Guam, the U.S. Virgin Islands and the Commonwealths of Puerto Rico and the Northern Mariana Islands, are listed. The list of applicable regions is in Notice 2019-54 on IRS.gov. The relief applies to farmers who were affected by drought that … Read More

Enrolled Agent Renewal Application Period Started November 1

NSTPInternal Revenue Service (IRS)

Enrolled Agent Renewal Application Period Started November 1.

Enrolled Agent Renewal Application Period Started November 1 Enrolled Agent News- Annual Enrollment Renewal Application Period for EAs The renewal application period for enrolled agents (EAs) opened November 1, 2019 and will continue through January 31, 2020. EAs with Social Security Numbers (SSNs) ending in 4, 5 or 6 are required to renew their enrollment during this period or their EA status will expire on March 31, 2020. Background—EAs. Section 10.4(a) of Circular 230 authorizes the IRS to grant EA status to individuals who demonstrate special competence in tax matters by passing A written examination (Special Enrollment Examination) and A background check that shows they have not engaged in any conduct that would justify suspension or disbarment under Circular 230. EAs are eligible to practice before the IRS and are subject to the rules in Circular 230. Once an individual becomes eligible for EA status by passing the written exam and background check, the individual must file an application for enrollment with the IRS and pay a nonrefundable user fee. (31 CFR 10.5) To maintain active status and ability to practice before the IRS, every three years EAs must complete continuing education requirements, file an application to renew their enrollment and … Read More

Taxpayers Encouraged by IRS in New Campaign to be ready for Tax Filing Season

NSTPInternal Revenue Service (IRS)

Taxpayers Encouraged by IRS to be ready for Tax Filing Season

Taxpayers Encouraged by IRS in New Campaign to be ready for Tax Filing Season Get Ready for Taxes:  Get ready today to file 2019 federal income tax returns The Internal Revenue Service today urged taxpayers to act now to avoid a tax-time surprise and ensure smooth processing of their 2019 federal tax return. This is the first in a series of reminders to help taxpayers get ready for the upcoming tax filing season.  To that end, a special page, newly updated and available on IRS.gov, outlines things taxpayers can do now to prepare for the 2020 tax season ahead. Adjust withholding; Make estimated or additional tax payments The IRS urges everyone to use the Tax Withholding Estimator to perform a  paycheck or pension income checkup. This is even more important for those who received a smaller refund than expected or owed an unexpected tax bill last year. It’s also a good idea for anyone who had a key life event, such as getting married, getting divorced, having or adopting a child, retiring, buying a home or starting college. If the Tax Withholding Estimator recommends a change, an employee can then submit a new Form W-4, Employee's Withholding Allowance Certificate, to … Read More