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Charitable Cash Contribution Limits for 2020 Did You Know? As part of the U.S. Treasury's ongoing COVID-19 (coronavirus) relief programs for taxpayers, the IRS has made temporary changes to the rules for deducting charitable contributions on federal tax returns. Normally, taxpayers who itemize deductions on Schedule A can deduct cash charitable contributions up to a specified limit, usually 60% of their adjusted gross income (AGI). For 2020, however, qualified contributions... may be deducted up to 100% of the taxpayer's AGI. (For corporations, the 2020 deduction limit is 25% of taxable income.) Furthermore, qualified contributions above this raised limit may be carried over as a deduction for the next tax year. To qualify for this limit suspension, a contribution must satisfy ALL of these requirements: - It is a cash contribution (that is, a direct contribution of money, not other property) - It is made to a qualifying charitable organization - It is made during calendar year 2020. Note that non-cash property contributions made in 2020 do not qualify for this limit suspension. However, these contributions may still be deducted up to the normal limits (typically 50% of AGI minus the amount of any deducted cash contributions). A tax professional can help you determine if any of your 2020 charitable contributions qualify for the deduction limit suspension, and how to claim your full deduction if so. The IRS also has a tool available for checking exempt organizations: https://www.irs.gov/charities-non-prof/search-for-charities.

New Tax Scams and Identity Theft Warnings Did You Know? The IRS recently posted warnings about new and ongoing tax scams, along with other fraudulent activity related to the COVID-19 (coronavirus) pandemic. The most prevalent and dangerous scams involve identity theft, deceptive advertising, and attempts to cheat taxpayers out of their refunds or economic impact payments (EIPs, also called stimulus payments). - STEALING REFUNDS OR EIPS THROUGH IDENTITY THEFT: Some criminals... steal a taxpayer's Social Security number (SSN), and then file bogus forms with the IRS in order to receive tax refunds or other payments that rightly belong to the taxpayer. - FAKE CHARITIES: Currently, a number of fraudulent charities with names very similar to legitimate organizations are calling taxpayers, claiming that they are collecting funds to help pandemic victims. Actual charities will provide their Employer Identification Numbers (EINs) upon request, so you can look them up and verify that the callers are who they say they are. Most real charities also offer secure online contribution portals. - OFFER-IN-COMPROMISE (OIC) MILLS: You may have heard ads for agencies that can settle people's IRS debts for "pennies on the dollar." Some of these companies charge high fees to submit an OIC application to the IRS on a taxpayer's behalf. Only about one in three OIC proposals are accepted by the IRS, but the companies do not refund fees for rejected applications. If you need help applying, work only with a reputable tax professional. - FAKE PAYMENTS & REFUNDS WITH REPAYMENT DEMANDS: In this very complex scam, identity thieves first obtain a taxpayer's SSN and bank account information, then file a fake IRS return and have the refund deposited into the taxpayer's bank account. A scammer then calls the refund recipient and impersonates an IRS agent, claiming that the refund was issued by mistake and must be returned to the IRS. Often, these scammers demand the "repayment" in the form of gift cards. If you receive a mysterious payment from the IRS, especially if you then receive a phone call demanding repayment, contact your bank and the IRS immediately to report the potential scam. Above all, remember to never share your SSN or any other personal information with anyone unless you are 100% sure who they are and why they need it. If in doubt, hang up or delete the email or text message, then contact the IRS directly to inquire about the issue.

Filing Extensions and Minimizing Penalties Did You Know? Taxpayers who requested an automatic extension to file their 2019 federal income tax returns may file anytime up until October 15, 2020. Remember, however, that an automatic IRS extension is only an extension to file tax returns, NOT an extension to pay any tax owed. Taxes not paid by the July 15, 2020 payment deadline may be subject to late penalties and interest charges. Therefore, taxpayers who have not yet sent an... IRS payment that was due on July 15, including 2019 income tax and first- and second-quarter estimated tax payments for 2020, should submit a payment to the IRS as soon as possible to minimize penalties. Electronic payments may be made using the IRS online payment portal (link below). The IRS urges those who cannot pay what they owe at this time to pay whatever amount they can, and then apply for an installment plan to pay off the remaining balance. Those who did not file a 2019 federal return or automatic extension request by July 15 may face a Failure to File penalty in addition to late fees and interest. It is therefore especially important for these taxpayers to take action as soon as possible. A tax professional can help anyone trying to meet federal tax filing and payment requirements to submit the appropriate forms and applications to the IRS, and start getting back on track. IRS Online Payment Portal: https://www.irs.gov/payments

IRS Installment Payments after July 15 - Did You Know As part of the federal government's COVID-19 (coronavirus) relief programs, the U.S. Treasury allowed many taxpayers with an IRS installment payment agreement, or a pending or accepted Offer-in-Compromise (OIC), to suspend payments between April 1 and July 15, 2020. The IRS recently confirmed that to avoid penalties, affected taxpayers must resume making required payments by their first due date on or after July 15, or con...tact the IRS if they cannot do so. The IRS guidance includes the following key points: - If you currently have an installment agreement with the IRS and had your bank stop making automatic payments due to the pandemic, you should tell your bank to restart these payments by your first payment due date after July 15. If you are unable to make your payments due to coronavirus-related hardships, you may call the phone number on your IRS notice to discuss options. You may also avoid long phone wait times by submitting an online application (see link below) to revise your agreement. - If you have a pending OIC and suspended your payments, simply resume making scheduled payments by July 15. If your offer is accepted, the IRS will update the agreement to allow you to make any missed payments at the end of the offer period. - If you suspended payments on a previously approved OIC, the IRS requires that you not only resume making payments on July 15, but also make up any skipped payments by that due date. If you are unable to make up your missed payments at this time, call the phone number on your IRS notice to discuss your options. - If your IRS tax debt was referred to a private collection agency before April 1, 2020 but you suspended payments between April 1 and July 15, you will need to restart payments to the collection agency. You should also contact your collection agency representative to find out if it is appropriate to update or restructure your payment agreement based on your current circumstances. Remember also that although the IRS did not impose penalties for skipped payments during the April 1 - July 15 grace period, interest charges may still have accrued on the tax debt. Most importantly, if you are unable to make any required federal tax payment, contact the IRS as soon as possible to discuss your situation. When dealing with the IRS, it is always best to be proactive. Apply for or revise an installment payment agreement: https://www.irs.gov/pa/online-payment-agreement-application

Where's My Refund? - Did You Know You can use the IRS 'Where's my Refund' (https://www.irs.gov/refunds) tool to check the status of your refund. The 'Where's my Refund' tool is updated once daily, usually overnight. Your status is generally available within 24 hours upon the IRS receiving your e-filed return. If you have filed a paper return, the IRS is currently experiencing processing delays for paper filed returns due to limited staffing, but will process them in the order received.