2020 Tax Season Letter
January 4, 2020
Dear Clients and Friends:
We hope 2019 was a happy and prosperous year for you. Now that it is January, it’s time to start thinking about gathering the information needed for the preparation of your taxes.
Last year, the provisions of the Tax Cuts and Jobs Act (TCJ) went into effect. Many taxpayers were caught unaware of the many deductions that changed as a result of the TCJ. The most significant change for individuals was the increase in the standard deduction and loss of the exemption deduction. Most taxpayers received smaller refunds then they were expecting and, in some cases, they even had to pay. Another new provision called the QBI deduction benefited some taxpayers who owned businesses, Partnerships and S-Corporations, but created confusion for owners of rental properties. Some rental properties qualified for the new OBI deduction and some didn’t. Guidance from the IRS has been sparse or nonexistent. It is still an area of the new law creating more questions than definitive answers. On December 20, 2019 the President signed a new budget that included some significant tax changes. Many of the tax provisions are effective retroactively back to January 1, 2018. As a result, we will be reviewing your 2018 return and may recommend you amend your 2018 return to take advantage of these provisions when appropriate.
The IRS is giving the Form W-4, Employees Withholding Allowance Certificate, a major overhaul beginning January 1. The previous form estimated your appropriate tax withholding using an allowance system.The new form will no longer use allowances but instead ask you to account for all income, deductions, credits and potential changes to provide a more accurate forecast for your tax withholdings. Please reach out to us if you need any assistance completing the form.
When you have gathered all your tax information, please call our office to set up an appointment to meet with us to go over your tax information. You may also drop off or mail your information to our office if you do not wish to have appointment. This year, we are utilizing a new portal which gives us the capability to securely share QuickBooks backups and other documents along with electronic copies of your tax returns. If you are interested in utilizing our portal, please let us know and we will initiate this by sending you an invitation to utilize the service.
We look forward to hearing from you soon and assisting you with your tax and financial obligations. As always, contact us if you have any questions.
Sincerely,
Starkey & Company, PA