Beginning in July, some tax software will require two-factor authentication for users to log into their tax preparation software. This will be in addition to the usual password requirement. (Beginning with the version for the 2016 tax year, most tax software began requiring users to enter a password to log into the software.) This new requirement will add an additional layer of security an...
Recently, the IRS announced that the Schedule D Tax Worksheet that was contained in the Instructions for Schedule D for the 2018 version of Form 1040 contained an error. The error affected taxpayers with capital gains subject to the maximum rate of 25% or 28%. Such gains are reported on lines 18 or 19 of the 2018 version of Schedule D and can result from the sales of depreciable real estate,...
As discussed in our March 26, 2019 post, in late March of 2019, The IRS announced additional retroactive relief for some taxpayers who might otherwise have been subject to the penalty for underpayment of estimated taxes. However, since many taxpayers had already filed returns for the 2018 tax year before this additional relief was announced, the late relief created a complication for taxpayers ...
As part of the budget legislation that was recently enacted by New York State for the fiscal year that began on April 1, 2019, the New York State income tax rules for trusts and estates have been retroactively changed as of January 1, 2018. For taxable years beginning after December 31, 2017, Form IT-205, Fiduciary Income Tax Return, will now permit a subtraction adjustment/deduction for taxes...
Recently, New York State has sent erroneous notices to numerous taxpayers regarding their 2018 personal income tax refunds. In this situation, the taxpayer has already received the refund requested on the taxpayer’s 2018 New York State personal income tax return. However, after receiving the refund, the taxpayer receives a notice that indicates that the allowable refund for the 2018 tax ye...
As practitioners prepare extensions for the upcoming filing due date, it is important to tell clients about estimates used in computing the amount due for the extension. For example, if a client has not yet received a Schedule K-1, it is important to tell the client that an estimate of the income from that missing K-1 was used to compute the amount due with the extension. It is also importan...
As discussed in our seminars, several tax provisions that affect individual taxpayers expired after 2017. These provisions include, among others, the above-the-line deduction for higher education tuition/fees, the mortgage insurance premiums deduction on Schedule A, the exclusion of income on the discharge of up to $2 million of home acquisition indebtedness secured by a principal residence, an...
As discussed in our seminars, the Tax Cuts and Jobs Act changed the rules for deemed distributions of loans from employer-sponsored retirement plans when an employee leaves employment. (See page 57 of the M+O=CPE Individual Tax Year-End Workshop Reference Book Tax Year 2018 for a discussion of these provisions.) The outstanding loan amount is treated as a deemed distribution, unless the form...
The IRS has announced additional relief for some taxpayers who might otherwise be subject to the penalty for underpayment of estimated taxes. As discussed in our January 16, 2019 post, the IRS had previously provided relief for some individual taxpayers who may have insufficient withholding due to changes made by the Tax Cuts and Jobs Act and the revised withholding tables issued shortly afte...
As discussed in our seminars, qualified improvement property was affected by a technical glitch in the Tax Cut and Jobs Act, which was enacted on December 22, 2017. Qualified improvement property is any improvement to an interior portion of a building which is nonresidential real property that meets certain other restrictions and requirements. (See pages 59 to 60 of the M+O=CPE Individual Tax...
