Author Archives: Jeramiah Young

2019 Federal Tax Changes

INFORMATION PROVIDED BY:   CROSSLINK TAX RESOURCE CENTER

April 24, 2019

Below are some of the federal provisions that will go into effect or be changing in 2019.

Provisions that go Into Effect Beginning in 2019:

  • Alimony – For divorce settlements that are finalized in 2019 and beyond
    • Alimony and separate maintenance payments are not deductible by the payor spouse.
    • Alimony and separate maintenance payments are no longer included in income of surviving spouse.
  • ACA Individual Penalty no longer applies. This means that individuals that do not have health insurance for all or part of 2019 will no longer be subject to a penalty.

Changing or Inflation Adjusted Provisions in 2019:

  • Medical Expense Threshold on Schedule A
    • 10% of AGI for all taxpayers beginning in 2019
  • Standard Deduction
    • MFJ: $24,400
    • Single: $12,200
    • Head of Household: $18,350
  • Federal Mileage Rates
    • 58 cents per mile – Business
    • 20 cents per mile – Medical and moving
    • 14 cents per mile – Charity
  • Retirement Contribution Limits
    • IRAs – $6,000 ($7,000 for taxpayers over 50)
    • 401(k), 403(b) or 457 plans – $19,000 ($25,000 for taxpayers over 50)

 

Dos and Don’ts for Taxpayers Who Get a Letter from the IRS

Issue Number:    Tax Tip Number 2018-95

Every year the IRS mails millions of letters to taxpayers for many reasons. Here are some tips and suggestions for taxpayers who receive one:

Don’t ignore it. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do.

Don’t panic. The IRS and its authorized private collection agencies do send letters by mail. Most of the time all the taxpayer needs to do is read the letter carefully and take the appropriate action.

Do take timely action. A notice may reference changes to a taxpayer’s account, taxes owed, a payment request or a specific issue on a tax return. Taking action timely could minimize additional interest and penalty charges.

Do review the information. If a letter is about a changed or corrected tax return, the taxpayer should review the information and compare it with the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return, and keep it for their records.

Don’t reply unless instructed to do so. There is usually no need for a taxpayer to reply to a notice unless specifically instructed to do so. On the other hand, taxpayers who owe should reply with a payment. IRS.gov has information about payment options.

Do respond to a disputed notice. If a taxpayer does not agree with the IRS, they should mail a letter explaining why they dispute the notice. They should mail it to the address on the contact stub at the bottom of the notice. The taxpayer should include information and documents for the IRS to review when considering the dispute. The taxpayer should allow at least 30 days for the IRS to respond.

Do remember that there is usually no need to call the IRS. If a taxpayer must contact the IRS by phone, they should use the number in the upper right-hand corner of the notice. The taxpayer should have a copy of the tax return and letter when calling.

Do avoid scams. The IRS will never initiate contact using social media or text message. The first contact from the IRS usually comes in the mail. Taxpayers who are unsure if they owe money to the IRS can view their tax account information on IRS.gov.

More Information:
Understanding Your IRS Notice or Letter
Tax Topic 651: Notices – What To Do
Tax Topic 653: IRS Notices and Bills, Penalties, and Interest Charges
Tax Topic 654: Understanding Your CP75 or CP75A Notice Request for Supporting Documentation
Understanding Your CP2000 Noticev