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Individual Tax Relief Measures Addressing the Coronavirus

By Michelle Puma

During these challenging and unprecedented times, your highest priority is certainly the health of yourself and your loved ones.
However, to assist taxpayers with the economic pains caused by COVID-19 (commonly referred to as Coronavirus), the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March 27th. This Act contains a massive amount of relief and with it, a complexity that may be difficult to unravel. We have included the most salient points for each aspect of the law and separated them into categories (business and individuals) to assist with categorization. Please note there is some overlap of these provisions, therefore you might want to read each section below to determine what might apply to you. The provisions of the Act will apply to our clients to varying degrees; however, we have summarized the key components below.


The SECURE Act and Other Last-Minute Tax Changes

by Kassandra Cristobal

Despite all the gridlock in Washington, as well as an impeachment, the SECURE Act has passed. It changes a number of important retirement plan rules. The act runs over 120 pages, so the experts will be poring over it for some time. Meanwhile, a number of sources have weighed in on what they think are the key provisions. (Note that last-minute alterations and more detailed analysis may lead to additional changes in the coming weeks.)


Tax Saving Strategies for the Rest of 2019

by Don Purvis

As the end of the year approaches, it is a good time to think of planning moves that will help lower your tax bill for this year and possibly the next. Year-end planning for 2019 takes place against the backdrop of recent major changes in the rules for individuals and businesses. For individuals, these changes include lower income tax rates, a boosted standard deduction, severely limited itemized deductions, no personal exemptions, an increased child tax credit, and a watered-down alternative minimum tax (AMT). For businesses, the corporate tax rate has been reduced to 21%, there is no corporate AMT, there are limits on business interest deductions, and there are very generous expensing and depreciation rules. And non-corporate taxpayers with qualified business income (QBI) from pass-through entities may be entitled to a special deduction.


Individual Taxpayer Identification Numbers (ITINs) Expiring on December 31st, 2019

by Kassandra Cristobal

Do you have an Individual Taxpayer Identification Number (ITIN)? If so, it may be expiring soon.

All ITINs not used on a federal tax return at least once in the last three years will expire on December 31, 2019. In addition, ITINS issued before 2013 with middle digits of 83, 84, 85, 86, or 87 (Example: 9XX-83-XXXX) will expire at the end of the year.

The Internal Revenue Service (IRS) is encouraging taxpayers to submit their renewal applications early in order to avoid refund and processing delays in 2020. Taxpayers can renew their ITIN by completing a Federal Form W-7 and mailing it to the address listed on the form’s instructions with any required documentation. You can find the form here.

What is an ITIN?

An Individual Taxpayer Identification Number (ITIN) is a tax processing number assigned to individuals who do not have, or are not eligible to obtain, a Social Security number (SSN). Typically, only United States citizens and those non-citizens who are authorized to work in the U.S. receive SSNs.

For more information, visit the IRS’s Individual Taxpayer Identification Number web-page.

2019 Capital One Data Breach – 10 Ways to Protect Yourself from Identity Theft

by Amanda Domitrowich

In March of this year, Capital One was involved in a data breach which exposed the information of over 100 million U.S. and Canada customers. The hacker found a configuration vulnerability in Capital One’s infrastructure allowing access to typical credit card application data from consumers and small businesses who had applied for credit from 2005 on. Capital One has since fixed the configuration vulnerability and is working with law enforcement. Capital One will contact you via mail if you are a victim of the breach. Capital One has offered to provide free credit monitoring and identity protection to those affected.

What to do if you suspect you are a victim:

  1.  Place a fraud alert
  2. Contact fraud departments
  3. Freeze your credit
  4. Document everything
  5. Create a recovery plan –

Steps to take to prevent your identity and credit info from falling into the wrong hands:

  1. Know who you’re talking to. Before you reveal any personally identifying information, find out how it will be used and whether it will be shared with others.
  2. Pay attention to your billing cycles. Follow up with creditors if your bills don’t arrive on time. A missing credit card bill could mean an identity thief has taken over your credit card account and changed your billing address to cover his tracks.
  3. Guard your mail against theft. Deposit outgoing mail in post office collection boxes or at your local post office—not in your own mailbox for your carrier to pick up.
  4. Add multifactor authentication for your logins and other transactions. This is a second security step which requires more than one method of authentication before you can access your account.
  5. Put passwords on your credit card, bank and phone accounts. Avoid using easily available information such as your mother’s maiden name, your birth date or your phone number.
  6. Do not give out personal information on the phone, through the mail or over the internet unless you have initiated the contact and know who you’re dealing with.
  7. Keep items with personal information in a safe place. To thwart an identity thief who may pick through your trash to capture your personal information, tear or shred your charge receipts, copies of credit applications and other financial statements.
  8. Minimize the amount of identification information you carry to what you actually need. Don’t carry your social security card—memorize the number and store the card in a secure place.
  9. Monitor your credit reports.
  10. Keep passwords secure.

For more tips and information, visit the FTC’s website. 

IRS released final 199A regulations and safe harbor rules for rentals

by Cortney Chandler

The wait is over! The IRS just released the final 199A Qualified Business Income (QBI) deduction regulations along with safe harbor rules for real estate rentals.  Some key take-aways to note are:

  1. These documents provide clarity on several issues regarding QBI.
  2. Safe harbor sets 250 hours of service threshold and documentation requirements.
  3. Section 754 step ups (caused by a sale of a partnership interest or death of a partner) will be treated as qualified property in the calculations.
  4. Triple net leases are excluded from the safe harbor, but may still qualify for QBI under limited circumstances.


California to Implement Wayfair “Economic Nexus” Thresholds starting April 1st, 2019

By: Kassandra Cristobal

Beginning on April 1st of 2019, certain retailers located outside of California that are engaged in business in the state (but with no physical presence in the state) will be required to collect California state and district use tax if their sales of tangible personal property are comprised of either:

  • $100,000 of sales into the state; or
  • 200 separate sales transactions into the state

Retailers will be required to collect the taxes on any sales taking place on or after April 1st and remit them to the California Department of Tax and Fee Administration (CDTFA) through their sales and use tax return.


How to Estimate a Company’s Obligation to Collect Sales Tax Under South Dakota v Wayfair (17-494, 06/21/2018, U.S.)

by: Tony Pimentel

Wayfair sold products to South Dakota residents, however, it did not collect sales tax as it did not have a physical presence in South Dakota.  Under the physical presence test, it did not have to do so. South Dakota could have subpoenaed the required data and collected the use tax from its citizens, but it decided it was much easier to file suit to force Wayfair to collect the tax. The Supreme Court sided with South Dakota and ordered Wayfair to collect the tax based on the enabling statute.


Filing Status During a Divorce


By: Megan Doherty

Should you file-single, joint, or married filing separately-for federal income tax purposes during the pendency of your divorce/separation proceedings?  In general, your filing status depends on your marital status, and your marital status depends upon your status under state law.


Changes to Partnership Audit Procedures – Will this Affect You or Your Business?


By: Amber Stevenson

The IRS has issued proposed regulations (Centralized Partnership Audit Rules, also known as “CPAR”) regarding how audit adjustments related to partnership tax returns will be assessed.  If you own an interest in a partnership or an entity taxed as a partnership, or even if you used to own an interest in one of these types of entities, this could affect you and it’s important to be aware of the changes so you aren’t surprised by a tax bill down the road.


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