Monthly News: March 2020
Farmers and fishermen who chose not to make quarterly estimated tax payments have to file their 2019 Tax return by March 2nd along with the payment for all taxes owed to avoid the estimated tax penalty. This applies to all farmers and fishers whose farming or fishing income was least 2/3 of their gross income.
The IRS will be making visits to high-income taxpayers who have not filed taxes for the previous year or years. The IRS has hired additional enforcement personnel and they will be making face to face visits. So if you haven’t filed previous years returns it would be best to do so before you receive a visit.
IRA owners who turn 70 ½ this year and got RMD (Required minimum distribution) statements can disregard them. Financial institutions that maintain these IRA’s must send these notices out by January 31st. With the passage of the Secure Act, taxpayers are not required to take RMD’s until age 72 now. You will not be penalized for not taking the RMD if you turn 70 ½ in 2020 and don’t take the distribution. If you turned 70 ½ in 2019 you must take the RMD by April 15th or you will be penalized.
The tax break for installing energy-efficient windows is back and applies for 2018-2020 tax years. It is 10% with a limit of up to $500. This also applies to roofs, doors and insulation that are added to the primary residence. To take the break for 2018 you must amend your 2018 return.
Payroll tax fraud is a high priority for the IRS and the Justice department. The DOJ is increasing the number of civil injunctions against businesses and their officers that have repeatedly failed to deposit taxes withheld from workers.
The IRS is also focusing on tax scams involving improper fuel-tax-credit claims. Farmers and others that use off-road fuel for their business can take a credit for the federal fuel tax they pay. The IRS has added filters to electronically screen returns with suspicious credits. The IRS and the EPA have teamed up to keep these fraudulent schemes from growing.