Tax & Current Accounting Topics

https://www.irs.gov/newsroom/tax-withholding-estimator-helps-retirees-figures-tax-on-social-security-benefits

Free step-by-step webinar September 19 IR-2019-155, September 13, 2019 WASHINGTON — The new Tax Withholding Estimator, launched last month on IRS.gov, includes user-friendly features designed to help retirees quickly and easily figure the right amount of tax to be taken out of their pension payments. The mobile-friendly estimator replaces the Withholding Calculator. The estimator has features specially tailored to the unique needs of retirees receiving pension payments and Social Security benefits. The new tool offers retirees, as well as employees and self-employed individuals, a more user-friendly way to check their withholding. Whether they receive wages or pension payments, it helps taxpayers estimate if the right amount is being withheld from their income to cover their tax liability. The estimator uses a simple, six-step question-and-answer format using information like marital or filing status, income, withholding, adjustments, deductions and credits. To help people use the tool most effectively, the IRS is holding a free two-hour webinar on Thursday, September 19 at 2 p.m. Eastern time. Among other things, the webinar will feature step-by-step instructions on how to use the new estimator and a live question-and-answer session. To sign up, visit the webinar page on IRS.gov. Special help for retirees A retiree can use the estimator to enter any pension income or Social Security benefits they or their spouse receive. The tool then automatically calculates the taxable portion and incorporates it into an overall estimate of their projected tax liability and withholding for the year. If a withholding change is needed, the retiree can choose a tax due of close to zero or a refund amount. The estimator will then link to Form W-4P, Withholding Certificate for Pension or Annuity Payments, and give the retiree a specific withholding recommendation based on the option chosen. It also gives instructions on how to fill in each line of the form. Enhancements for everyone The enhancements for retirees are just a few of the many new features offered by the Tax Withholding Estimator. Others include: Plain language to improve taxpayer understanding. Mobile-friendly design. A new progress tracker to help taxpayers know how much more information they need to enter. The ability to go back and forth through the steps, correct previous entries and skip questions that don't apply. Tips and links to help users quickly determine if they qualify for various tax credits and deductions. Automatic calculation of taxes on self-employment income. The IRS urges both pension recipients and wage-earners to do a Paycheck Checkup now and review their withholding for 2019. This is especially important for anyone who faced an unexpected tax bill or penalty when they filed earlier this year. It's also a critical step for those who made withholding adjustments in 2018 or had a major life change, such as marriage, the birth of a child, adoption or buying a home. People most at risk of having too little tax withheld include those who itemized in the past, but now take the increased standard deduction. They also include households with two wage earners, employees with non-wage sources of income and those with complex tax situations. Also, anyone who changes their withholding in the middle or latter part of this year should do another Paycheck Checkup in January. That will help ensure that they have the right amount of tax withheld for all of 2020. Page Last Reviewed or Updated: 13-Sep-2019

The Treasury Department and the Internal Revenue Service today released final regulations (PDF) and additional proposed regulations (PDF) under section 168(k) of the Internal Revenue Code on the new 100% additional first year depreciation deduction that allows businesses to write off most depreciable business assets in the year they are placed in service by the business.

https://www.irs.gov/newsroom/treasury-irs-release-final-and-proposed-regulations-on-new-100-depreciation

The regulations released today on IRS.gov have been submitted to the Federal Register and may vary slightly from the published documents due to minor editorial changes. The documents published in the Federal Register will be the official documents.

The final regulations finalize the proposed regulations issued in August 2018 which implement several provisions included in the Tax Cuts and Jobs Act (TCJA). The proposed regulations contain new provisions not addressed previously.

The 100% additional first year depreciation deduction generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Machinery, equipment, computers, appliances and furniture generally qualify.

The deduction applies to qualifying property acquired and placed in service after September 27, 2017. The final regulations provide clarifying guidance on the requirements that must be met for property to qualify for the deduction, including used property. The final regulations also provide rules for qualified film, television and live theatrical productions.

Additionally, in the proposed regulations, the Treasury Department and IRS propose rules regarding (i) certain property not eligible for the additional first year depreciation deduction, (ii) a de minimis use rule for determining whether a taxpayer previously used property; (iii) components acquired after Sept. 27, 2017, of larger property for which construction began before Sept. 28, 2017; and (iv) other aspects not dealt with in the previous August 2018 proposed regulations. The proposed regulations also withdraw and repropose rules regarding application of the used property acquisition requirements (i) to consolidated groups, and (ii) to a series of related transactions.

For details on claiming the deduction or electing out of claiming it, see the final regulations or the instructions to Form 4562, Depreciation and Amortization (Including Information on Listed Property). For tax years that include September 28, 2017, see Rev. Proc. 2019-33 (PDF) for further information about making a late election or revoking an election.

Taxpayers who elect out of the 100% depreciation deduction must do so on a timely-filed return. Those who have already timely filed their 2018 return and did not elect out but still wish to do so have six months from the original deadline, without an extension, to file an amended return.

For more information about this and other TCJA provisions, visit IRS.gov/taxreform.

Earlier this year, the IRS provided additional expanded penalty relief (PDF) to individual taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year. 

http://accountinginstruction.info/

https://www.irs.gov/forms-pubs/irs-automatically-waives-estimated-tax-penalty-for-eligible-2018-tax-filers-16-aug-2019

The IRS is now automatically waiving the estimated tax penalty for eligible taxpayers who already have filed their 2018 federal income tax returns but who did not claim the waiver. Filing Form 843 for Expanded Underpayment of Estimated Income Tax Penalty Relief, posted March 27, 2019, is superseded to the extent it directs individual taxpayers who already have paid the penalty to file Form 843 to claim a refund.

Over the next few months, IRS is mailing notices (CP21) to affected taxpayers notifying them the penalty was waived. The automatic waiver has been granted to any eligible taxpayer whether or not they already have requested penalty relief on Form 843. After receiving their notice in the mail, taxpayers who already have paid the penalty should receive their refunds within three weeks, if they don’t owe any other taxes or debt the IRS is required to collect. Eligible taxpayers who already have filed a 2018 return do not need to request penalty relief, contact the IRS, or take any other action to get this relief.

The automatic waiver applies to any individual taxpayer who paid at least 80 percent of their total tax liability through federal income tax withholding or quarterly estimated tax payments but did not claim the special waiver available to them when they filed their 2018 return earlier this year. This waiver is designed to provide relief to any taxpayer who filed too early to take advantage of the waiver or was unaware of it when they filed.

For those yet to file, the IRS urges every eligible taxpayer to claim the waiver on their return. This includes those with tax-filing extensions due to run out on October 15, 2019. The fastest and easiest way to do that is to file electronically and take advantage of the waiver computation built into their tax software package. Those who choose to file on paper can fill out Form 2210 (PDF) and attach it to their 2018 return. See the Instructions for Form 2210 for details.

If you have questions about the notice or it’s been longer than three weeks, you may call the toll-free number listed on the top right corner of the letter.

Section 1274.--Determination of Issue Price in the Case of Certain Debt Instruments

Issued for Property

https://www.irs.gov/pub/irs-drop/rr-19-20.pdf

http://accountinginstruction.info/

(Also Sections 42, 280G, 382, 467, 468, 482, 483, 1288, 7520, 7872.)

Rev. Rul. 2019-20

 This revenue ruling provides various prescribed rates for federal

income tax purposes for September 2019 (the current month). Table 1

contains the short-term, mid-term, and long-term applicable federal rates

(AFR) for the current month for purposes of section 1274(d) of the Internal

Revenue Code. Table 2 contains the short-term, mid-term, and long-term

adjusted applicable federal rates (adjusted AFR) for the current month for

purposes of section 1288(b). Table 3 sets forth the adjusted federal longterm rate and the long-term tax-exempt rate described in section 382(f).

Table 4 contains the appropriate percentages for determining the lowincome housing credit described in section 42(b)(1) for buildings placed in

service during the current month. However, under section 42(b)(2), the

applicable percentage for non-federally subsidized new buildings placed in

service after July 30, 2008, shall not be less than 9%. Finally, Table 5

contains the federal rate for determining the present value of an annuity,

an interest for life or for a term of years, or a remainder or a reversionary

interest for purposes of section 7520. 

Applicable Federal Rates (AFR) for September 2019

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term

AFR 1.85% 1.84% 1.84% 1.83%

110% AFR 2.03% 2.02% 2.01% 2.01%

120% AFR 2.22% 2.21% 2.20% 2.20%

130% AFR 2.40% 2.39% 2.38% 2.38%

Mid-term

AFR 1.78% 1.77% 1.77% 1.76%

110% AFR 1.96% 1.95% 1.95% 1.94%

120% AFR 2.13% 2.12% 2.11% 2.11%

130% AFR 2.31% 2.30% 2.29% 2.29%

150% AFR 2.68% 2.66% 2.65% 2.65%

175% AFR 3.12% 3.10% 3.09% 3.08%

Long-term

AFR 2.21% 2.20% 2.19% 2.19%

110% AFR 2.43% 2.42% 2.41% 2.41%

120% AFR 2.66% 2.64% 2.63% 2.63%

130% AFR 2.88% 2.86% 2.85% 2.84%

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term

adjusted AFR 1.40% 1.40% 1.40% 1.40%

Mid-term

adjusted AFR 1.34% 1.34% 1.34% 1.34%

Long-term

adjusted AFR 1.68% 1.67% 1.67% 1.66%

REV. RUL. 2019-20 TABLE 3

Rates Under Section 382 for September 2019

Adjusted federal long-term rate for the current month 1.68%

Long-term tax-exempt rate for ownership changes during the

current month (the highest of the adjusted federal long-term

rates for the current month and the prior two months.) 1.89%

REV. RUL. 2019-20 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for September 2019

Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized

new buildings placed in service after July 30, 2008, shall not be less than 9%.

Appropriate percentage for the 70% present value low-income

housing credit 7.46%

Appropriate percentage for the 30% present value low-income

housing credit 3.20%

 IRS launches new Tax Withholding Estimator; Redesigned online tool makes it easier to do a paycheck checkup  Tax Withholding Estimator http://bit.ly/31mtzzW http://accountinginstruction.info/  WASHINGTON — The Internal Revenue Service today launched the new Tax Withholding Estimator, an expanded, mobile-friendly online tool designed to make it easier for everyone to have the right amount of tax withheld during the year. The Tax Withholding Estimator replaces the Withholding Calculator, which offered workers a convenient online method for checking their withholding. The new Tax Withholding Estimator offers workers, as well as retirees, self-employed individuals and other taxpayers, a more user-friendly step-by-step tool for effectively tailoring the amount of income tax they have withheld from wages and pension payments. “The new estimator takes a new approach and makes it easier for taxpayers to review their withholding,” said IRS Commissioner Chuck Rettig. “This is part of an ongoing effort by the IRS to improve quality services as we continue to pursue modernization and enhancements of our taxpayer relationships.” The IRS took the feedback and concerns of taxpayers and tax professionals to develop the Tax Withholding Estimator, which offers a variety of new user-friendly features including: • Plain language throughout the tool to improve comprehension. • The ability to more effectively target at the time of filing either a tax due amount close to zero or a refund amount. • A new progress tracker to help users see how much more information they need to input. • The ability to move back and forth through the steps, correct previous entries and skip questions that don’t apply. • Enhanced tips and links to help the user quickly determine if they qualify for various tax credits and deductions. • Self-employment tax for a user who has self-employment income in addition to wages or pensions. • Automatic calculation of the taxable portion of any Social Security benefits. • A mobile-friendly design. In addition, the new Tax Withholding Estimator makes it easier to enter wages and withholding for each job held by the taxpayer and their spouse, as well as separately entering pensions and other sources of income. At the end of the process, the tool makes specific withholding recommendations for each job and each spouse and clearly explains what the taxpayer should do next. The new Tax Withholding Estimator will help anyone doing tax planning for the last few months of 2019. Like last year, the IRS urges everyone to do a Paycheck Checkup and review their withholding for 2019. This is especially important for anyone who faced an unexpected tax bill or a penalty when they filed this year. It’s also an important step for those who made withholding adjustments in 2018 or had a major life change. Those most at risk of having too little tax withheld include those who itemized in the past but now take the increased standard deduction, as well as two-wage-earner households, employees with nonwage sources of income and those with complex tax situations. To get started, check out the Tax Withholding Estimator on IRS.gov.