SSA Letters titled “Education Correspondence”

November 18, 2019By Smeriglio Associates LLCNews

Problems arise when data reported on a W-2 form doesn’t match data held by the Social Security Administration (SSA). Wages and taxes paid can’t be credited to the right wage earner. To fix errors, the SSA regularly notifies employers when mismatches occur in the name and Social Security number on a W-2, or when key … Read More

TCJA Miscellaneous Itemized Deductions

November 18, 2019By Smeriglio Associates LLCNews

The Tax Cuts and Jobs Act suspended miscellaneous itemized deductions for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026. To reflect the change, the IRS has updated rules for using standard mileage rates when computing the deductible costs of operating an automobile for business purposes. Revenue Procedure 2019-46 explains that a … Read More

IRS: Tax Year of Income

November 17, 2019By Smeriglio Associates LLCNews

The IRS has proposed regulations on the “tax year of income” inclusion for certain accrual method taxpayers. The proposed regs reflect changes to Sec. 451(b) made by the Tax Cuts and Jobs Act. They amended the section to provide that, for accrual-method taxpayers, the “all events” test for any gross income item isn’t treated as … Read More

IRS: Inflation-Adjusted Tax Rate Schedules

November 17, 2019By Smeriglio Associates LLCNews

The IRS has issued official inflation-adjusted tax rate schedules and other key tax figures for 2020. Tax-bracket thresholds increase for each filing status but, because they’re based on percentages, they increase more if you’re in a higher bracket. The standard deduction for 2020 will be $12,400 for single filers and $24,800 for married couples filing … Read More

IRS: 2020 Retirement Plan Contribution Limit Adjustments

November 16, 2019By Smeriglio Associates LLCNews

The IRS has announced the 2020 cost-of-living adjustments with respect to retirement plan contribution limits. Many dollar limits will change because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. Key figures include: elective annual deferrals to 401(k) and 403(b) plans will increase $500 to $19,500. The maximum contribution to … Read More

IRS: 2019 / 2020 Child Credit

November 16, 2019By Smeriglio Associates LLCNews

Do you have children under age 17? If so, and other qualifications are met, you may be eligible for the child credit. The maximum amount per qualifying child is $2,000 for 2019 and 2020. Up to $1,400 of that amount can be refundable for each qualifying child. That is, taxpayers can receive a refund up … Read More

November 15, 2019By Smeriglio Associates LLCNews

A recent audit reveals that the IRS’s Criminal Investigation (CI) should increase its role in enforcement activities involving identity theft. A Treasury Inspector General for Tax Administration (TIGTA) audit found that, from 2013 to 2017, the number of identity theft investigations initiated by CI declined 75%. Auditors found that many taxpayer-initiated incidents of identity theft … Read More

IRS: FSA Contribution Limit Increase

November 15, 2019By Smeriglio Associates LLCNews

Do you have a Flexible Spending Account (FSA) with your employer? Make sure to take full advantage of it in the new year. For 2020, the contribution limit will rise to $2,750 (up from $2,700 in 2019). If an employer chooses, employees can carry over up to $500 of unused funds into 2021. Otherwise, FSAs … Read More

IRS: Special Needs Adoption Credit

November 14, 2019By Smeriglio Associates LLCNews

If you’re considering adopting a special needs child, you should know there may be financial help available in the form of an adoption credit. For 2020, the credit is $14,300 (up from $14,080 for 2019). For taxable years beginning in 2020, the maximum credit allowed for other adoptions is the amount of qualified adoption expenses … Read More