On the second day of 2020, the Internal Revenue Service (IRS) helpfully announced that on January 27, 2020, it is open season on the 2019-2020 tax season.
While tax season brings special joy to tax preparers (we’ll talk about the IRS and tax preparers a little later), our team of tax attorneys rolls up our sleeves to go high and deep to help our individual and corporate clients reduce or avoid their tax burden.
Although January 27 marks the starting bell for the acceptance and processing of individual tax returns, the due date remains April 15, 2020, which falls on a Wednesday this year.
Each year there are minor (and sometimes major) changes to deduction amounts, income brackets, and the like. Taxpayers should speak with their accountant or tax lawyer, but there are some general changes to be aware of for the 2019 filing season:
- No health insurance penalty: Under the Affordable Care Act (ACA), filers who could afford health insurance but did not sign up were responsible for a “shared responsibility payment.” In 2019, that penalty does not apply.
- No deduction for alimony: For a long time, the responsibility of paying alimony was paired with a tax deduction for the money paid. No more. For divorce agreements created after 2018, alimony payments are not considered a deduction for the payee, nor is alimony considered taxable income for the recipient.
For filers with foreign bank accounts, your Foreign Bank and Financial Accounts report (FBAR) is also due on April 15, 2020. That said, if you don’t make the April 15 filing date, you have until October 15, 2020 to file your report without requesting an extension from the IRS.
As a US citizen or resident, your FBAR alerts the IRS to accounts or value interests held outside of the US by entities including partnerships, individuals, corporations, limited liability corporations, trusts or estates. If the value held exceeds $10,000 at any point in the reported calendar year (not just at the time of filing), the FBAR should be submitted.
The IRS pretty much assumes filers with offshore tax holdings are aware of FBAR regulatory filings at this point. You will not find favor or penalty forgiveness with the IRS if you ignore the FBAR filing deadline—or the report altogether.
2020 is here with new tax opportunities and hopefully no surprise liabilities. If you have a high wealth profile or business interests, speak with a reputable tax attorney about your portfolio.
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Serving clients nationwide from offices in Cleveland and Chicago, the tax attorneys at Robert J. Fedor Esq., LLC deliver knowledgeable counsel on civil audits, allegations of criminal tax fraud, and other tax controversy. Contact us today.