INDIVIDUAL SEMINAR NOTES
First, I want to address the need to have all tax documents to me by March 31, 2020 for filing individual tax returns due
April 15th. Last year, I was in the hospital three days prior to the due date and had seven tax returns left to do.
I was willing to leave hospital against medical advice to complete them. FYI, doctors can be quite difficult under those
circumstances. I realize that if documents are given by March31st, more might need to be requested, but I feel more
confident that preparation would not be down to last minute filing.
The Maryland seminar focused mainly on sales tax. I will speak to business accounts separately in reference to this
matter. The main points were:
If $100,001.00 in revenue or 200 transactions occur, out-of-state businesses must register in
Maryland. This is a “look back” determination, meaning if the prior year meets this criteria, a business
must begin filing for the current year. Please contact me if you have any concerns about this matter.
· If doing business
in other states, a business must find out what their registration requirements will be.
· Business owners must also become aware
of what items are taxable in each jurisdiction, for example, in Maryland if a drink has more than 10% juice content, it is
is a national issue and of high concern and scrutiny.
The business seminar will be addressed under separate cover and discussed with business clientele.
As for the individual seminar, I will
highlight most common issues:
If you move, a change of address form must be filed and mailed to the IRS. Claiming that
a notice was not received will not exempt from penalties incurred.
Everyone will be required to acknowledge whether or not they had any virtual currency dealings.
· Please advise
me of any foreign income. The penalties for not reporting are horrendous.
Please advise if there is any cancellation of debt, to determine if taxable.
· A new form 1040SR is for individuals
65 of years or older. This is not a required form. I will discuss with anyone that it applies to.
made to offset loss of deduction in State and Local Taxes on Schedule A (i.e. property taxes) reduces contributions deduction.
State law cannot dictate federal law.
Ministers – any gifts received are taxable income. Housing allowance is still tax-free
based on rules. One very important rule is that it must be stated in previous governing documents.
· If you have a Health Savings Account,
it is recommended to max the contributions out ($3,500.00 combined employer and employee). Since most W2s are incorrect,
if you are a part of one of these plans, I will require a final paystub to prove the accuracy.
· Converting to a Roth needs to be assessed
as to the benefit of the taxable impact. It was also warned that Medicare looks back two tax return years when it is
applied for and a Roth conversion could affect the cost.
Gifts – highly advisable for estate planning through gifts. The current exemption
is $11.4 million per person. If that exemption is reduced in the future, more gifts will be taxable. Fortunately,
there is portability of the unused portion of exemption to surviving spouse.
discussion was had in reference to the forms needed to complete
The IRS has given some clarification on different issues, such as mortgage interest deductibility
and the new QBI (qualified business income deduction, commonly referred to as the 20% deduction), that were part of the Tax
As for mortgage
interest, unable to borrow against one home to purchase another, unless it is a rental property and a 10T Election is filed.
The downside is that any future improvements are not deductible
As for the QBI, rental real estate activities were focused upon. All business activities, to
be defined as such by IRS, should be:
For the purpose of making a profit.
2. Done regularly and
3. Performed on a full time basis.
A bank account should be separately kept along
with business records (such as Quick Books). Preparation of Form 1099 should be done, if applicable.
Rental activities excluded are real
estate used by the taxpayer for any part of the year and Real estate rented or leased under a triple net lease.
250 hours logged should include hours worked, description of services performed, dates and who performed the service.
These services do not include any financial activities, planning, managing or constructing capital improvements or travel
time to and from the real estate.
This log should be provided to me at yearend with the following statement:
Under penalties of perjury, I (we) _________________________ have examined this statement, and, to the best of my (our) knowledge
and belief, the statement contains all the relevant facts relating to the revenue procedure, and such facts are true, correct
and complete. Please provide an signature and date.
I will keep you posted of any other pertinent information as it becomes available.