The tax filing extension deadline, October 15th, is just around the corner. Here is a quick reminder of what you need to know.

Moving to a new state can be an awesome new adventure. Whether you are moving for a new job, to be closer to family, to retire, or for some other reason.

No matter what takes you to your new residence, you can’t forget about taxes.

Here’s what you need to know about filing taxes in your new state as you settle into your new routine.

Be Sure to Establish Residency in Your New State

Even if you haven’t sold your home or severed all ties with your previous hometown, you will need to make as many connections with your new residence as possible.

• Be sure to change your mailing address 
• Get your driver’s license and voter registration in your new state 
• Register children for school (if applicable) in your new state 
• Move your personal belongings and family pets to your new home 

This will help to prove that you have fully moved from the original state and are no longer subject to taxes there as a resident.

Cut Ties with Your Previous Jurisdiction

If...

All United States entities (including citizens and resident aliens as well as corporations, partnerships, and trusts) with financial interests in or authority over one or more foreign financial accounts (e.g., bank accounts and securities) need to report these relationships to the U.S. Treasury if the aggregate value of those accounts exceeds $10,000 at any time during the year. Failure to file the required forms can result in severe penalties.

The U.S. government wants this information for a couple of pretty obvious reasons. One, foreign financial institutions may not have the same reporting requirements as U.S.-based financial institutions. For example, they probably won’t issue the 1099 forms to report interest, dividends and sales of stock. By requiring those in the U.S. to divulge their foreign account holdings, the IRS can more easily cross-check to see if foreign income is being reported on the individual’s tax return. The second (and probably more significant)...

The Internal Revenue Service has resurrected a form that has not been used since the early 1980s, Form 1099-NEC (the NEC stands for non-employee compensation). This form will be used to report non-employee compensation in place of the 1099-MISC, which has been used since 1983 to report payments to contract workers and freelancers. Form 1099-MISC has also been used to report rents, royalties, crop insurance proceeds and several other types of income unrelated to independent contractors.

The revival of the 1099-NEC was mandated by Congress with the passage of the PATH Act back in 2015. However, there have been some complications with implementing the form, so its use has been delayed. It will now make its return debut in 2021 for payments made in 2020.

The reason for the change is to control fraudulent credit claims—primarily for the earned income tax credit (EITC), which is based on earned income from working. Scammers were filing tax returns before the normal February 28 due...

Because of the COVID-19 pandemic emergency, the IRS postponed the original due date for filing 2019 returns to July 15, 2020. If you could not complete your 2019 tax return by July 15 and filed a request for additional time to file, that extension expires on October 15, 2020. Failing to file before the extension period runs out may cost you late-filing penalties.

There are no additional extensions available (except in designated disaster areas), so if you do not or will not have all of the information needed to complete your return by October 15, please call this office so that we can explore your options for meeting your extended filing deadline.

If you are waiting for a K-1 from a partnership, S-corporation or fiduciary return, the extended deadline for those returns is September 15 (September 30 for fiduciary returns); so you should probably make inquiries if you have not received that information yet.

Late-filed individual federal returns are subject to a penalty of 5% of the tax...

We recently posted materials contrasting the Trump and Biden tax proposals, but you can head over to our LinkedIn page at the link below and download a high-level, textual summary of all of the tax laws in question and candidates' competing viewpoints on each one of them.  It's a handy tool for any tax planning you might be doing for post-election.  

Also, check out the rest of our September newsletter -- it's packed with great estate and tax planning tips.

See the summary and newsletter here.

Interest rates are currently at an all-time low, and it may be time for you to consider refinancing your existing home mortgage to take advantage of these lower rates. Doing so may substantially reduce your monthly mortgage payments. As you know if you have been watching the ads, some lenders are offering rates as low as 2.75%.

If you are thinking about refinancing your current home loan, consider the tax ramifications before making your decision, as the 2018 tax reform made some changes that may impact it. Home mortgage debt can consist of acquisition debt and equity debt. Acquisition debt is the debt you incur to purchase your home or make substantial improvements to the home. Equity debt is debt secured by the home that you use for other purposes not related to acquiring your home. Prior to 2018, homeowners could deduct the interest paid (up to $100,000 of equity debt) as an itemized deduction. However, with the passage of tax reform, the interest on home equity debt is no longer...

September 1 - 2020 Fall and 2021

Tax Planning Contact this office to schedule a consultation appointment.

September 10 - Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during August, you are required to report them to your employer on IRS Form 4070 no later than September 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

September 15 - Estimated Tax Payment Due

The third installment of 2020 individual estimated taxes is due. Our tax system is a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the...

September 15 - S Corporations

File a 2019 calendar year income tax return (Form 1120-S) and pay any tax due. This due date applies only if you requested an automatic 6-month extension. Provide each shareholder with a copy of K-1 (Form 1120-S) or a substitute Schedule K-1.

September 15 - Corporations 

Deposit the third installment of estimated income tax for 2020 for calendar year

September 15 -  Social Security, Medicare and Withheld Income Tax

If the monthly deposit rule applies, deposit the tax for payments in August.

September 15 - Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in August.

September 15 - Partnerships

File a 2019 calendar year return (Form 1065). This due date applies only if you were given an additional 5-month extension. Provide each partner with a copy of K-1 (Form 1065) or a substitute Schedule K-1.

September 30 - Fiduciaries of Estates and Trusts

File a 2019 calendar year return (Form 1041). This due date...

The Internal Revenue Service has announced it will reopen the registration period for federal beneficiaries with children who didn't receive a $500 per child Economic Impact (stimulus) Payment earlier this year.

When to Apply - The IRS urges certain federal benefit recipients to use the IRS.gov Non-Filers tool between August 15 and September 30 to enter information on their qualifying children to receive the supplemental $500 payments.

Who Should Register - Those eligible to provide this information include people with qualifying children who receive Social Security retirement, survivor or disability benefits; Supplemental Security Income (SSI); Railroad Retirement benefits; and Veterans Affairs Compensation and Pension (C&P) benefits and did not file a tax return for 2018 or 2019.

The IRS anticipates the catch-up payments, equal to $500 per eligible child, will be issued by mid-October.

Already Used the Non-Filer Tool? - For those Social Security, SSI,...