Taxpayers who received refunds on their 2019 federal personal income tax returns will receive interest from the IRS, if the refunds were paid after April 15, 2020, due to a federal law that requires interest to be paid on refunds that are delayed due to a federally-declared disaster. Most taxpayers will receive the interest payment separately from the payment of their refunds; however, some taxp...
On August 28, 2020, the IRS issued Notice 2020-65, which provides guidance for the optional payroll tax deferral available to employers for the period of September 1, 2020 to December 31, 2020. During that period, employers are permitted, but not required, to delay the withholding and payment of the employee-share of the Social Security tax for employees who are paid less than $4,000 for a bi-we...
Some taxpayers who paid their taxes due by check have recently received notices from the IRS indicating that the balance of tax remains unpaid. On August 13, 2020, the IRS indicated on its website that it still has a large backlog of unopened mail, due to the pandemic. The IRS also indicated that it will post payments made by check to taxpayer accounts using the date the payment was received...
As practitioners assist clients in navigating these challenging times, they should consider warning clients about the income tax effects of unemployment benefits. While unemployment benefits are included in gross income, many recipients do not have income taxes withheld from the benefits. For those who elect to have withholding, the amount of withholding is often below the amount of the tax ...
As discussed in our post on March 31, 2020, the requirement to take minimum distributions from retirement accounts has been suspended for the 2020 tax year. This provision was part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, which was enacted on March 27, 2020. Some taxpayers already had received their required minimum distributions (RMDs) for 2020, or they received them ...
Preparing client extensions requires practitioners to use estimates for unknown amounts. It is important to warn clients that the actual amounts of income or deductions, when they become known at a later date, may differ from the estimated amounts used to prepare the extensions. Practitioners should warn clients in writing, indicating that differences between actual amounts and estimates cou...
On June 29, 2020, the IRS announced that it will not postpone the July 15, 2020 filing due date. As a result, taxpayers must either file their returns or request an extension by July 15. In addition, all tax payments must occur on or before July 15. Tax payments made after July 15 will be subject to penalty and interest. ...
Clients who have previously had their identity stolen for tax-filing purposes are often issued an identity protection personal identification number (“IPPIN”) by the IRS. Once an IPPIN is issued, the IRS will send a letter with an updated IPPIN for each subsequent tax year. (The IPPIN from last year is no longer valid for the current year.) The IPPIN must be entered on all tax return fil...
As discussed in our post on December 30, 2019, the tax law that was enacted on December 20, 2019 retroactively extended the deduction for private mortgage insurance premiums (“PMI”), so the deduction is available for the 2018, 2019 and 2020 tax years. (The deduction had previously expired after 2017, and had not been extended while 2018 tax returns were being prepared.) The deduction is su...
June 11, 2020 Update: On June 11, 2020, New York State issued Notice N-20-8, which indicates that New York State will treat June 15, 2020 as the due date for the first installment for 2020 estimated taxes and will treat July 15, 2020 as the due date for the second installment for 2020 estimated taxes. Unfortunately, this will result in penalties for the late payment of estimated taxes for taxp...
