Tax Return Changes for 2020

Tax Return Changes for 2020

tax return
Every year, certain states or the IRS might make changes that impact the tax returns of certain households or businesses. The following are brief overviews of some changes taking place for 2020. Adjustments for Inflation Tax laws are adjusted based on inflation, and recent adjustments that will impact your returns include an increase in standard deductions ($200 for individual filers and $400 for joint returns), two percent increases in tax brackets, and an increased alternative minimum tax exemption. New Forms for Seniors In the past, people over the age of 65 used the same tax forms as younger adults. This year, the IRS has a new form for seniors over 65, which is the 1040-SR. This form has no maximum income limit, and it looks more like the older 1040A…
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Getting Divorced in 2019? Speak to a Tax Lawyer Before You Agree to an Alimony Order

Getting Divorced in 2019? Speak to a Tax Lawyer Before You Agree to an Alimony Order

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If two spouses get divorced and have a substantial income discrepancy, they may be subject to an alimony order. Until 2019, the individual paying alimony would get a tax break, as they could deduct the payments from their taxes to lower their liability. The spouse receiving alimony would pay taxes on the funds, though that tax rate was generally much lower because of their lower tax bracket. The Tax Cuts and Jobs Act significantly changed how alimony payments are taxed, effective for divorce agreements after December 31, 2018. It is highly important to discuss the implications of an alimony order with a tax lawyer in San Francisco before you sign an agreement. Reversing Tax Benefits Under the new law, the person paying the alimony no longer gets to deduct alimony…
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How Long Can the IRS Audit Your Tax Return?

How Long Can the IRS Audit Your Tax Return?

tax return
Many people are concerned about a possible IRS audit, as anyone can be audited, even without suspicions of misconduct. How long do you have to worry about a particular return being audited? It depends on the situation, and the following are some timelines for IRS audits. If you receive notice of an audit, you should immediately contact an experienced tax lawyer in San Francisco. Three years - Generally speaking, the IRS has three years from the due date of your returns to begin an audit. However, there are many exceptions to the three-year rule. Six years - If the IRS believes that your returns included at least a 25 percent understatement of income, it has six years to conduct the audit of those specific returns. For example, if you earned…
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