4Thought Blog

Just in time to avoid a government shutdown, the federal government last week approved new spending bills that extend and change some important tax benefits for both businesses and individuals.

Here’s a look at some of the key changes from the Further Consolidated Appropriations Act, 2020. These will go into effect right around the two year anniversary of the passage of the sweeping Tax Cuts and Jobs Act in December 2017.

The IRS has announced its agents will be conducting unannounced in-person meetings with delinquent business and individual taxpayers.

The IRS routinely conducts these face-to-face visits, it said in an announcement last month. The primary purpose of these visits is to make contact with taxpayers with a previously known tax issue that wasn’t resolved through mail contact, the agency said.

These meetings are scheduled in areas with a limited number of available revenue officers due to declining IRS resources. The first face-to-face contact from a revenue officer is almost always unannounced.

Do you plan on making contributions to charity this year? If you're in a giving mood, you may be rewarded with sizeable charitable deductions on your tax return.

But the tax law is fraught with numerous twists and turns, so you must be careful to navigate the rules.

Reducing your current-year adjusted gross income is usually a tax-smart idea. Here are 10 ways to reduce your AGI (and modified AGI) over the short and long run.

Closeup on AGI

AGI equals all taxable income items minus selected deductions for such items as deductible IRA and retirement plan contributions and alimony payments required by pre-2019 divorce agreements.

Lowering your AGI reduces your taxable income for the year and your exposure to unfavorable AGI-based provisions. For example, lowering AGI can increase the amount of Social Security benefits that you can receive federal-income-tax-free and increase your allowable higher education tax credits.

The Internal Revenue Service last week announced it’s automatically waiving the estimated tax penalty for the more than 400,000 eligible taxpayers who already filed their 2018 federal income tax returns but did not claim the waiver.

Earlier this year, the IRS lowered the usual 90% penalty threshold to 80% to help taxpayers whose withholding and estimated tax payments fell short of their total 2018 tax liability. The agency also removed the requirement that estimated tax payments be made in four equal installments, as long as they were all made by January 15, 2019.

Bitcoin has been around for nearly a decade. But the tax rules related to "virtual currency" are still evolving. In fact, some Bitcoin investors may be in for a surprise when they file their 2019 returns. Tax matters have become even more complicated because relevant provisions of the Tax Cuts and Jobs Act took effect starting in 2018.

Here's what you should know about the brave relatively new world of virtual currency.

The summer months are a good time to brainstorm tax planning strategies. Some ideas will help cut your tax bill for the current year; others will allow you to minimize future taxes. Here are various short- and long-term strategies to consider. They factor in changes included in the Tax Cuts and Jobs Act.

The free use of a company car is one of the best perks an employee may receive as part of a compensation package. But the benefit to the employee isn't completely "free" under current tax law. Essentially, personal use of a company car is treated as a taxable noncash fringe benefit, subject to income tax obligations.

The IRS just announced a key valuation amount for 2019.

The maximum value of an employer-provided vehicle (including cars, vans and trucks) first made available to employees for personal use in calendar year 2019 for which either the vehicle cents-per-mile valuation rule or fleet-average valuation rule may be used is $50,400. (IRS Notice 2019-34)

With this year’s average tax refund around $2,700, the Internal Revenue Service reminds taxpayers they have options to control the amount of their take-home pay and the size of their tax refund by adjusting their tax withholding.

A Paycheck Checkup using the IRS Withholding Calculator can help taxpayers determine the right amount of tax they should have their employer withhold from their paychecks.

Is your nonprofit organization pursuing planned gifts? It should be. Research suggests that the average planned gift in the United States falls between $35,000 and $70,000 -- and the amount may increase with more Baby Boomers moving into retirement. Yet many nonprofits, especially small and medium-sized organizations, lack formal planned giving programs.