Under the Families First Coronavirus Response Act, employers can grant paid leave for an employee to take care of their health needs related to COVID -19 or to care for their family members. This relief helps ensure employees are not forced to choose between being paid or staying home to care for themselves, a child or other family member.
In addition to the relief for employees, businesses can claim two new refundable payroll tax credits for granting paid leave to their employees. The paid sick leave credit and paid family leave credit are available for eligible employers who pay qualified sick leave wages and/or qualified family leave wages from April 1, 2020 through December 31, 2020, and who have fewer than 500 employees. 
The paid sick leave credit and the paid family leave credit will immediately and fully reimburse employers for the cost of providing COVID-19 related leave to their employees.
Here is what employees need to know about paid leave under the CARES Act.
Paid sick leave for workers
An employer can allow  a full-time employee up to 80 hours of paid sick leave.  A part-time employee may be allowed paid sick leave for the number of hours the employee works over a two-week period, if the employee is unable to work or telework because they are:

• Subject to federal, state, or local quarantine or isolation orders related to COVID-19
• Advised by a health care provider to self-quarantine due to COVID-19
• Experiencing COVID-19 symptoms and are seeking a medical diagnosis
• Caring for a person subject to federal, state, or local quarantine orders related to COVID-19 or has been advised to self-quarantine
• Caring for a child whose school or place of care is closed or care provider is unavailable for reasons related to COVID-19
• Experiencing any other substantially similar condition

Employers pay the benefits at 100% of employee’s regular pay up to $511 per day and $5,110 in total for the care of employee’s own health.

For the care of an employee’s family members, employers pay benefits at two-thirds of the employee’s regular pay up to $200 per day and $2,000 total.
Paid family leave to care for child
An employer can give up to 10 weeks of paid family leave at two-thirds their regular pay for up to $200 per day and $10,000 total if the employee is unable to work or telework because they’re caring for a child whose:

• School or place of care is closed due to COVID-19
• Childcare provider is unavailable due to COVID-19

With two weeks of paid sick leave and 10 weeks of paid family leave combined, an employee could receive up to a total of 12 weeks up to $12,000 of paid leave to care for a child.
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When the IRS makes a determination about someone’s tax return, that person can challenge the IRS’s decision. In fact, the taxpayer has a right to do so. This is one of ten rights laid out in the Taxpayer Bill of Rights. They also have the right for that challenge to be heard by the agency. 
This means taxpayers have the right to:

• Object to formal IRS actions or proposed actions and provide additional documentation in their response.
• Expect the IRS to consider their timely objections and documentation promptly and fairly.
• Receive a response if the IRS does not agree with them.

When a taxpayer does not agree with the IRS, they should not only know their rights, but also what to expect. Here are some situations a taxpayer might experience:

• A math or clerical error on their tax return. If the IRS sends a notice about a math or clerical error on their tax return, taxpayers have 60 days to reply if they disagree. Taxpayers should provide copies of any records to help correct the error. They can also call the number on the notice or bill for help.
  • If the IRS agrees. They will make the necessary adjustments to the account and send a corrected notice.
  • If the IRS disagrees. The agency will send a notice proposing a tax adjustment. This is called a statutory notice of deficiency. It gives the taxpayer the right to challenge it in the United States Tax Court before paying it. They have 90 days from the date of the notice to respond. They have 150 days if the notice is addressed outside the U.S. The taxpayer information webpage provides more information about the United States Tax Court.
• Audit. If a taxpayer submits documentation or objects during a return examination or audit, and the IRS disagrees with them, the agency will issue a statutory notice of deficiency. This notice will explain why the IRS is increasing their tax. The taxpayer may then petition the U.S. Tax Court before paying the tax.
• Levy or Lien. If the IRS notifies a taxpayer of plans to levy their bank account or other property, the taxpayer can generally request a hearing before the Office of Appeals. In most cases, the taxpayer can also appeal the proposed or actual filing of a notice of federal tax lien.

​The standard deduction reduces your taxable income. In 2019 the standard deduction is $12,200 for single filers and married filers filing separately, $24,400 for married filers filing jointly and $18,350 for heads of household.

The Setting Every Community Up for Retirement Enhancement Act of 2019, better known as the SECURE Act, which originally passed the House in July, was approved by the Senate on Dec.19, 2019, as part of an end-of-year appropriations act and accompanying tax measure, and signed into law on Dec. 20 by President Donald Trump. The far-reaching bill includes significant provisions aimed at increasing access to tax-advantaged accounts and preventing older Americans from outliving their assets.


KEY TAKEAWAYS​The SECURE Act became law on Dec. 20, 2019.

• The SECURE Act will make it easier for small business owners to set up “safe harbor” retirement plans that are less expensive and easier to administer.
• Many part-time workers will be eligible to participate in an employer retirement plan.
• The Act pushes back the age at which retirement plan participants need to take required minimum distributions (RMDs), from 70½ to 72, and allows traditional IRA owners to keep making contributions indefinitely.
• The Act mandates that most non-spouses inheriting IRAs take distributions that end up emptying the account in 10 years.
• The Act allows 401(k) plans to offer annuities.

While many people are required to file a tax return, it’s a good idea for everyone to determine if they should file. Some people with low income are not required to file, but will need to do so if they can get a tax refund.

Here are five tips for taxpayers who are deciding whether to file a tax return:

Find out the general reasons to file
In most cases, income, filing status and age determine if a taxpayer must file a tax return. Other rules may apply if the taxpayer is self-employed or can be claimed as a dependent of someone else. There are other reasons when a taxpayer must file. The Interactive Tax Assistant can help someone determine if they the need to file a return.
 
Look at tax withheld or paid
Here are a few questions for taxpayers to ask themselves:

• Did the taxpayer’s employer withhold federal income tax from their pay?
• Did the taxpayer make estimated tax payments?
• Did they overpay last year and have it applied to this year’s tax?

If the answer is “yes” to any of these questions, they could be due a refund. They must file a tax return to get their money.
Look into whether they can claim the earned income tax credit
A working taxpayer who earned less than $55,592 last year could receive the EITC as a tax refund. They must qualify and may do so with or without a qualifying child. They can check eligibility by using the 2019 EITC Assistant on IRS.gov. Taxpayers need to file a tax return to claim the EITC.
 
Child tax credit or credit for other dependents
Taxpayers can claim the child tax credit if they have a qualifying child under the age of 17 and meet other qualifications. Other taxpayers may be eligible for the credit for other dependents. This includes people who have:

• Dependent children who are age 17 or older at the end of 2019
• Parents or other qualifying individuals they support

The Child-Related Tax Benefits tool can help people determine if they qualify for these two credits.
Education credits
There are two higher education credits that reduce the amount of tax someone owes on their tax return. One is the American opportunity tax credit and the other is the lifetime learning credit. The taxpayer, their spouse or their dependent must have been a student enrolled at least half time for one academic period to qualify. The taxpayer may qualify for one of these credits even if they don’t owe any taxes. Form 8863, Education Credits is used to claim the credit when filing the tax return.

The home office deduction can help small business owners save money on their taxes. Taxpayers can take this deduction when they file their taxes if they use a portion of their home exclusively, and on a regular basis, for any of the following:

• As the taxpayer’s main place of business.
• As a place of business where the taxpayer meets patients, clients or customers. The taxpayer must meet these people in the normal course of business.
• If it is a separate structure that is not attached to the taxpayer’s home. The taxpayer must use this structure in connection with their business
• A place where the taxpayer stores inventory or samples. This place must be the sole, fixed location of their business.
• Under certain circumstances, the structure where the taxpayer provides day care services.

Deductible expenses for business use of a home include:

• Real estate taxes
• Mortgage interest
• Rent
• Casualty losses
• Utilities
• Insurance
• Depreciation
• Repairs and Maintenance

Certain expenses are limited to the net income of the business. These are known as allocable expenses. They include things such as utilities, insurance, and depreciation.  While allocable expenses cannot create a business loss, they can be carried forward to the next year. If the taxpayer carries them forward, the expenses are subject to the same limitation rules.
There are two options for figuring and claiming the home office deduction.

• Regular method: This method requires dividing the above expenses of operating the home between personal and business use. Self-employed taxpayers file Form 1040, Schedule C, and compute this deduction on Form 8829.
• Simplified method: The simplified method reduces the paperwork and recordkeeping for small businesses. The simplified method has a set rate that is capped at $1,500 per year, based on $5 a square foot for up to 300 square feet.

There are special rules for certain business owners:

• Daycare providers complete a special worksheet, which is found in Publication 587.
• Self-employed individuals use Form 1040, Schedule C, Line 30 to claim deduction.
• Farmers claim the home office deduction on Schedule F, Line 32.

​Taxpayers may discover an error after filing their tax return. They shouldn’t panic, they just need to correct it by filing an amended tax return.
Here are some common reasons to file an amended return:

• Using the wrong filing status
• Entering income incorrectly
• Not claiming credits for which they’re eligible
• Claiming deductions incorrectly

The IRS may correct math or clerical errors on a return and may accept returns without certain required forms or schedules. In these instances, there's no need for taxpayers to amend the return.
Taxpayers who do need to amend their tax return might have questions about how to do so. Here are some things they should know. The taxpayer should:

• Complete paper Form 1040-X, Amended U.S. Individual Income Tax Return. Taxpayers must file an amended return on paper even if they filed the original return electronically.
  
  
• Mail the Form 1040-X to the IRS address listed in the form’s instructions under Where To File. Taxpayers filing Form 1040-X in response to an IRS notice should mail it to the IRS address indicated on the notice.
  
  
• Attach copies of any forms or schedules affected by the change.
  
  
• File a separate Form 1040-X for each tax year. Mail each tax year in a separate envelope and enter the year of the original return being amended at the top of Form 1040-X.
  
  
• Wait – if expecting a refund – for the original tax return to be processed before filing an amended return.
  
  
• Pay additional tax owed as soon as possible to limit interest and penalty charges.
  
  
• File Form 1040-X to claim a refund within three years from the date they timely filed their original tax return or within two years from the date the person pays the tax – usually April 15 – whichever is later.
  
  
• Track the status of an amended return three weeks after mailing using Where’s My Amended Return? It can take up to 16 weeks for the IRS to process an amended tax return.

​Why is my refund smaller, or why do I owe money this year?
Due to the tax reform changes included in the Tax Cuts and Jobs Act (TCJA), the most significant revision of the U.S. tax code in more than 30 years, withholding tables changed for tax year 2018. This could mean less money was taken out of each paycheck and applied to your total tax, so there is less to refund. If you are used to receiving a small refund, you may even owe tax this year.
Other tax reform changes include an increase in the standard deduction, suspension of personal exemptions, an increase in the child tax credit, a limit or discontinuance on certain deductions and a new credit for other dependents. Any or all of these changes could have a significant impact on your total tax, especially in comparison to previous years.
To compare your total tax to last year, look at your 2017 Form 1040, Line 63 and your 2018 Form 1040, Line 15. These amounts represent your total tax liability for each year.
Should I adjust my withholding?
If your refund is smaller than in previous years, or you owe a balance, you can change the amount withheld from your paycheck going forward if you wish. File form W-4 to adjust the amount taken out of each paycheck.
What do I do if I owe money this year?
If you owe money on your federal return, you have until April 15th, 2019 to pay the IRS. Keep in mind, you do not have to pay at the same time you file. You can file your return anytime and wait to pay until April 15th.
If you are unable to pay the money you owe, you can contact the IRS to set up a payment plan. Failing to file your return and pay any tax liability by April 15th may result in penalties, interest charges, tax liens and/or levi

Written by TaxConnections Admin
The Tax Cuts and Jobs Act (TCJA) made changes that impact the depreciation and expensing of vehicles.

2018 Depreciation Limitations On Luxury Automobiles And Personal Use Property
For passenger automobiles placed into service after December 31, 2017, SECTION 13202 of the Tax Cuts And Jobs Act increases the dollar limitations on depreciation and expensing for passenger automobiles. For 2018, the amount of the depreciation and expensing deduction for a passenger car, light duty truck or van shall not exceed--

• $10,000 for the 1st taxable year in the recovery period,
• $16,000 for the 2nd taxable year in the recovery period,
• $9,600 for the 3rd taxable year in the recovery period, and
• $5,760 for each succeeding taxable year in the recovery period.

These numbers shall be adjusted for inflation after 2018. As such, for 2018, the limits for light-duty trucks, vans, and passenger cars are the same.
The TCJA retained the $8,000 limit for additional first-year depreciation for passenger automobiles. So in 2018, the maximum amount a taxpayer can deduct for a passenger automobile in the first year is $18,000.

Larger Vehicles
The TCJA increased bonus depreciation to 100 percent for qualifying property acquired and placed into service after September 27, 2017, and before January 1, 2023. It also extended bonus depreciation to used property acquired and placed into service after September 27, 2017.
SUVs with a gross vehicle weight rating above 6,000 lbs. are not subject to depreciation limits. They are, however, limited to a $25,000 IRC §179 deduction. IRC § 179(b)(5)(A). No depreciation or §179 limits apply to SUVs with a GVW more than 14,000 lbs. Trucks and vans with a GVW rating above 6,000 lbs. but not more than 14,000 lbs. generally have the same limits: no depreciation limitation, but a $25,000 IRC §179 deduction. These vehicles, however, are not subject to the §179 $25,000 limit if any of the following exceptions apply:

• -The vehicle is designed to have a seating capacity of more than nine persons behind the driver’s seat;
• -The vehicle is equipped with a cargo area at least 6 feet in interior length that is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment; or
• -The vehicle has an integral enclosure, fully enclosing the driver compartment and load-carrying device, does not have seating behind the driver’s seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.

Although SUVs purchased after September 27, 2017, remain subject to the $25,000 IRC § 179 limit, they are eligible for 100% bonus depreciation if they are above 6,000 lbs. This is true for both new and used vehicles. For a taxpayer’s first taxable year ending after Sept. 27, 2017, taxpayers may elect to apply a 50 percent allowance instead of the 100 percent allowance. To make the election, they must attach a statement to a timely filed return (including extensions) indicating they are electing to claim a 50% special depreciation allowance for all qualified property. Once made, the election cannot be revoked without IRS consent. As noted above, taxpayers may also elect out of bonus entirely for any class of property by filing an election on a timely filed return. Once filed, that election can also not be revoked without IRS consent.

Business Use Of Car
If you use your car in your job or business and you use it only for that purpose, you may deduct its entire cost of operation (subject to limits). However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use.
You can generally figure the amount of your deductible car expense by using one of two methods: the standard mileage rate method or the actual expense method. If you qualify to use both methods, you may want to figure your deduction both ways before choosing a method to see which one gives you a larger deduction.
Standard Mileage Rate – The Internal Revenue Service issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.
• 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.
• 14 cents per mile driven in service of charitable organizations.

The business mileage rate and the medical and moving expense rates each increased 1 cent per mile from the rates for 2017. The charitable rate is set by statute and remains unchanged.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
Use of Standard Mileage Rates
To use the standard mileage rate, you must own or lease the car and:

• You must not operate five or more cars at the same time, as in a fleet operation,
• You must not have claimed a depreciation deduction for the car using any method other than straight-line,
• You must not have claimed a Section 179 deduction on the car,
• You must not have claimed the special depreciation allowance on the car,
• You must not have claimed actual expenses after 1997 for a car you lease, and
• You can’t be a rural mail carrier who received a “qualified reimbursement.”

To use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then, in later years, you can choose to use the standard mileage rate or actual expenses.
For a car you lease, you must use the standard mileage rate method for the entire lease period (including renewals) if 
you choose the standard mileage rate.
Actual Expenses – To use the actual expense method, you must determine what it actually costs to operate the car for the portion of the overall use of the car that’s business use. Include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) attributable to the portion of the total miles driven that are business miles.
Note: Other car expenses for parking fees and tolls attributable to business use are separately deductible, whether you use the standard mileage rate or actual expenses.
Depreciation                 
Generally, the Modified Accelerated Cost Recovery System (MACRS) is the only depreciation method that can be used by car owners to depreciate any car placed in service after 1986. However, if you used the standard mileage rate in the year you place the car in service and change to the actual expense method in a later year and before your car is fully depreciated, you must use straight-line depreciation over the estimated remaining useful life of the car.
Recordkeeping
The law requires that you substantiate your expenses by adequate records or by sufficient evidence to support your own statement.

​Lower Tax Rates and Changed Income Ranges
The bill retains the seven tax brackets found in current law but lowers a number of the tax rates. It also changes the income thresholds at which the rates apply.
The current brackets are: 10%, 15%, 25%, 28%, 33%, 35% and 39.6%
The new brackets will be: 10%, 12%, 22%, 24%, 32%, 35% and 37%
The income thresholds at which these brackets kick in have changed, as well.
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​For single filers:
Alternative Minimum Tax Exemptions Increased
The bill also eases the burden of the individual alternative minimum tax (AMT) by raising the income exempted from $84,500 (adjusted for inflation) to $109,400 married filing jointly and from $54,300 (adjusted for inflation) to $70,300 for single taxpayers, so fewer taxpayers will pay it.
Tax Relief for Individuals and Families
Increased standard deduction:
The new tax law nearly doubles the standard deduction amount. Single taxpayers will see their standard deductions jump from $6,350 for 2017 taxes to $12,000 for 2018 taxes (the ones you file in 2019).
Married couples filing jointly see an increase from $12,700 to $24,000. These increases mean that fewer people will have to itemize. Today, roughly 30% of taxpayers itemize. Under the new law, this percentage is expected to decrease.
Increased Child Tax Credit:
For, families with children the Child Tax Credit is doubled from $1,000 per child to $2,000. In addition, the amount that is refundable grows from $1,100 to $1,400. The bill also adds a new, non-refundable credit of $500 for dependents other than children. Finally, it raises the income threshold at which these benefits phase out from $110,000 for a married couple to $400,000.
 
Eliminations or Reductions in Deductions
Personal and dependent exemptions:
The bill eliminates the personal and dependent exemptions which are currently $4,050 for 2017 and were expected to increase to $4,150 in 2018.
State and local taxes/Home mortgages:
The bill limits the amount of state and local property, income, and sales taxes that can be deducted to $10,000. In the past, these taxes have generally been fully tax deductible.
The bill also caps the amount of mortgage indebtedness on new home purchases on which interest can be deducted at $750,000 down from $1,000,000 in current law.
Health care:
The bill eliminates the tax penalty for not having health insurance after December 31, 2018. It also temporarily lowers the floor above which out-of-pocket medical expenses can be deducted from the current law floor of 10% to 7.5% for 2017 and 2018
So for 2017 and 2018, you can deduct medical expenses that are more than 7.5% of your adjusted gross income as opposed to the higher 10%.
Self-employed (contractors, freelancers, sole proprietors) and small businesses:
The bill has a myriad of changes for business. The biggest includes a reduction in the top corporate rate to 21%, a new 20% deduction for incomes from certain type of “pass-through” entities (partnerships, S Corps, sole proprietorships), limits on expensing of interest from borrowing, almost doubling of the amount small businesses can expense from the 2017 Section 179 amount of $510,000 to $1,000,000, and eliminates the corporate alternative minimum tax (AMT).