We are hearing so much about cybercrime, these days, that we (you and I) need to be protecting our identities. Especially given the Equifax cyber intrusion which may have put yours and my social security numbers and other private information at risk.
What I am finding out is that there are two levels of limited protection that will let you know that your information might have been compromised. The first level is more after the fact, and that is notifying you of a change in your credit report i.e. a new account set up, or the like. The second level is not quite as available, but it is monitoring the dark side of the internet. That will let you know when your information is in that area of the internet and will let you know what others are doing with that information.
I am not yet comfortable enough with what companies to recommend that might provide either of those services.
The one thing is certain – these hacks will continue and the need to protect your information will continue to increase.
For Individuals, the Form 1040 and Form 40 (Oregon) are due to be filed by April 15th or the next business day if April 15th is on a weekend or holiday.
For Businesses, the Form 1065 (Partnership) and the Form 1120S (S Corporation) are due by March 15th. The Form 1120 (C Corporation) is due by April 15th.
For Estates and Trusts, the Form 1041 is due by April 15th.
Exempt Organizations (Non-Profit), the Form 990 is due by May 15th.
Yes, we will answer your telephone questions, Yes, we will repair those improperly prepared returns; Yes, we do ALL of the business returns; Yes, we prepare tax returns for Estates and Trusts; Yes, we prepare Non-Profit (Exempt) Organization returns; and Yes, we provide consulting for ALL business and individual taxpayers. And we do all of these at very reasonable prices. Give us a call. Unlike many, WE honor OUR quoted prices.
Oregon’s minimum wage for effective July 1, 2020 is $12.00 per hour, in the Portland metropolitan area it is $13.25, and $11.50 in other areas. Effective July 1, 2021, those numbers go to $12.75, $14.00, and $12.00.
Employees, did you know that you should be having withholding taxes removed from your payroll and be issued a form W-2 at the end of the year IF your employer provides the work space, work tools necessary for the job, and tells you when you are required to be at work? Many are being given Form 1099 which requires YOU to pay the payroll taxes the employer should be paying.
Did you know that once you are retired and turn 72 years old (effective 12/20/19), you have to start taking distributions from those accounts based on life expectancy tables. This is called Required Minimum Distributions (RMD).
For 2020, you can receive total annual wages (earned income) of $17,640 without reducing your SS Benefit. Your social security benefit will be reduced $1.00 for each $3.00 of earned income above the $17,640 threshold. If you reach full retirement age during 2020, you can eam up to $46,920 for the year up to your birth month. Beginning with your birth month, there is no earnings limit.
Each year, Social Security Administration (SSA) makes available online a report of your annual and historic social security wages. If those annual and historic wages are incorrect, it could affect social security benefits including retirement and disability. In order to reflect accurate information, it needs to be corrected with SSA within two years of the date that you have access to the report. If you fail to act, after three years from the applicable tax year, the amount cannot be corrected. The result is that any future benefits will be less than what they should be, and cannot be changed.
Even if you do not intend to draw social security benefits, you should call Medicare at 800-772-1213 three months before your 65th birthday to discuss your options. Other answers can be found at http://www.medicare.gov. For planning purposes, you need to know that if you wait to start drawing Medicare AFTER your 65th birthday, you may end up paying more in premiums.
Did you know that if your Federal tax owed on your tax return is more than $1,000 you might have to pay a penalty? The way to avoid that is by paying in at least what your total Federal tax liability was for the prior year (same rule is for the state return). This is accomplished by paying in that amount over four installments (estimated tax payments). But many find themselves owing a large amount at those times. Another solution is to pay an amount monthly that will be enough to cover your projected total Federal tax so that you do not have such a large liability when the return is due. This procedure can also be applied to the filing of your Oregon income tax.
If your mortgage debt is partly or entirely forgiven, you may be able to claim special tax relief and exclude the debt forgiveness income. Ask us how.
Yes, we can continue doing your work through the portal, email, and snail mail systems. Ask us how we will be able to provide that service.
Your marital status on your tax retum is determined on December 31. If you got married on or before that date,. you file a “married filing joint” or “married filing separate” return for the entire year. If you got divorced in the current tax year and the divorce was final by December 31, then you file as a “single” person for the entire year. If you have others living in your household, then you may be able to file “head of household”. If you had any marital status changes, give us a call to help you determine the correct marital status. This information is necessary to calculate the proper withholding amounts for wages, unemployment or other special types of income.
Do not allow any dependent children to file their own return, particularly college students, and do not file them yourself. Although this guidance appears self-serving for us, let us assure you this guidance is meant to protect you from your children inadvertently costing you literally thousands of dollars in potential health care tax credits, education credits, and dependent tax credits.
The 2020 mileage rates are 57.5 cents per mile for business, 17 cents for medical or moving, and 14 cents for charitable.
If you are in the trade or business, and receive more than $10,000 in cash in one or a series of related transactions, then you are to file Form 8300 with the IRS within 15 days of the transaction. Most would think that this will not apply. But the definition of “cash” and Rrelated transactions” is broader than you might think. Cash includes cash, cashier’s checks, money orders, traveler’s checks, and money orders unless excluded in IRS Publication 1544. Related transactions can be one transaction, or a series that might be related to the same transaction such as monthly rents, purchases of products or supplies, and other transactions that can be tied together. The rule seems to be ‘when in doubt, report’. Give us a call to discuss in more detail.
For businesses that have employees, there may be a requirement to pay the payroll taxes more frequently than quarterly. For those meeting the requirements, the only method for making these payments will be through the IRS EFTPS system. You can sign up by calling 1-800-555-4477 or through the website at www.eftps.gov. The Oregon payment requirements follow the same dates as Federal.
Those with less than $25.000 of gross receipts MUST file postcard Form 990-N by May 15th. Those organizations with more than $25,000 MUST file either Form 990-EZ or Form 990. FAILURE TO FILE FOR THREE YEARS WILL CAUSE YOUR EXEMPTION TO BE LOST.
Did you know that upon death any assets held in only the name of the decedent must go through a probate process which turns the property over to the court system for final outcome. The ways to avoid probate cost are (1) to have joint ownership of the property, (2) beneficiary designations, or (3) have all property owned by a trust.
Reasons to avoid probate include (1) costs of probate can be great, (2) probate information is open to the public, (3) court system controls who those assets are transferred to.
Going through the probate process puts creditors on a time limit for collecting or arranging collection on those estate liabilities. When going through this process, the probate court uses the will in determining the decedent’s wishes for their asset disposition. If there is no will, the state law determines that disposition.
The annual gift exclusion for 2020 is $15,000.
If a person dies and has a gross estate greater than $11,400,000, then a Federal Form 706 and Oregon Form 706 have to be filed. If the gross estate is less than $11,400,000 and over $1,000,000, and the deceased is an Oregon resident, then only the Oregon Estate Tax Form 706 is required to be filed. For Washington State, the threshold is over $2,000,000. Gross estate includes any asset in the decedent’s name plus assets under control by the decedent at the time of his/her death plus an add back of all prior gift transfers.
If you are a disabled war veteran or the surviving spouse of a war veteran, you may be entitled to exempt $17,911 or $21,493 of your homestead property’s assessed value from property taxes. The exemption amount increases by 3 percent each year. The exemption is first applied to your home and then to your taxable personal property. If you are an Oregon resident and a qualifying veteran or that veteran’s surviving spouse and live in your home, you may file a claim and receive the exemption.