Sometimes it is helpful to know what changes are being implemented and what are being discussed. Here are some key items right now.
Charitable Contribution Deduction for folks who do NOT itemize. In 2020, there will be a new line item to deduct up to $300 as a direct line item on the Form 1040. Only allowed if the taxpayer does NOT itemize their deductions. This day and age, most folks are happy to just take the Standard Deduction rather than actually Itemizing their deductions.
Currently, it is being discussed in Congress to increase the amount from $300 to $4,000 for single filers and $8,000 for married. I would expect that if Trump wins re-election and improves the Republican representation in Congress, while holding on to control of the Senate, there is a strong chance of this happening. No guarantees if Democrats are in control. In fact, they (the Democrats) have been saying they want to raise taxes, not give more breaks. Hold on to your hat. We’ll have to wait until after the November elections to know more about this issue.
If you’ve ever needed to amend your personal income tax return, then you can relate to how bad the current system is for doing that. Up until now, you have to file the amended return in paper through the U.S. Post Office. It usually took the IRS 6-8 months to process that paper return, then another 3-6 months before they issued any refunds.
Well, we are anxiously awaiting notification from the IRS that they have activated an E-File process for amended personal tax returns. The hope is that by going to an E-File system, the IRS will be able to receive the amended returns into their computers instantly rather than waiting for somebody to manually get around to entering it. This should eliminate data entry errors that do occur under the old paper filing process. It also should speed up the time it takes the IRS to review the amended return, resolve any questions and then approve it for automatic refund (if applicable).
Finally, the IRS has been required by Congress to submit a plan this month on how they will improve customer service, institute better IRS employee training, and reorganize the entire service to update to new technologies, audit practices, etc. Guess what? The IRS has found an excuse to put this off for now. You guessed it! COVID-19.
I expect to hear a lot of IRS folks crying “COVID” in various correspondence. It’s the new scapegoat. I figure if the IRS can use it, why not everybody. So guess what our new number 1 excuse for any delays is? You got it! “COVID.” Try it, you’ll like it!
Have you heard? Prov 15:30 says, “The light of the eyes rejoices the heart, and good news refreshes the bones.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com Also on Facebook.