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Posts By: Zinner & Co. Tax Department

A change to the Veterans Auto and Education Improvement Act of 2022 will affect military members and their spouses by giving them options to claim residency for tax purposes.

CPAs and taxpayers urged to contact elected officials and push for passage of H.R. 5155

Based on multiple media reports, the U.S. Treasury and IRS are preparing for the worst this filing season.

According to a Jan. 10 Washington Post article, the Treasury warned of enormous challenges this tax filing season that will likely delay refunds.

Treasury Department officials told reporters they predict a “frustrating season” for taxpayers and tax preparers due to delays caused by the pandemic, years of budget cuts to the IRS, and federal stimulus measures that have added to the tax agency’s workload.

Tax Deadline Remains April 15

While taxpayers still have to file their taxes by April 15, 2020, the deadline to pay taxes has been extended by 90 days until July 15, 2020.

During a March 17th press conference regarding the coronavirus pandemic, U.S. Treasury Secretary Steven Mnuchin announced taxpayers will have an additional 90-days through July 15, 2020 to pay their taxes, penalty-free and interest-free. 

He said individual taxpayers can defer up to $1 million of tax payments and corporations up to $10 million in tax payments.

The IRS has announced that the contribution limits for Flexible Spending Accounts (FSA) contribution limits have been increased to $2750 for the plan year beginning 2020.

Ohio's state constitution requires that the state's biennial budget be approved by June 30. That deadline has come and gone and Ohio's Legislature has not yet passed a budget. The house and senate both approved a measure that extends state funding at current levels for 17 days while lawmakers try to compromise on the 3,000+-page budget bill.

The sad reality is more than 50% of marriages end in divorce. The median duration of a marriage in the United States is 11 years. Divorce is a reality and there are some important things you need to know from a financial and tax perspective.

Historically, in the U.S., only goods were subject to sales tax. But as the economy has shifted from a production to a service-based economy (beginning in the 1950s), some services became subject to sales tax. 

Recently, proposed regulations were issued to provide some clarity concerning the new Section 199A deduction. 

As part of the Tax Cuts and Jobs Act, which became effective as of the beginning of this year, this new deduction generally provides a 20 percent deduction for a pass-through businesses (primarily partnerships and LLCs taxed as partnerships, S Corporations, Sole Proprietorships and single member LLCs) that generate Qualified Business Income (QBI). This deduction is taken at the individual level and is allowable after one takes the greater of their itemized deductions or the standard deduction.

QBI does not include wages earned by an employee, guaranteed payments paid to a partner or reasonable compensation paid to an S Corporation shareholder. 

In June, Zinner & Co. Partner Howard J. Kass, CPA, AEP®, CGMA, finished his one-year term as president of the Cleveland/Akron Chapter of the Society of Financial Service Professionals (CAFSP).

A CAFSP member since 2010, Kass was thankful for the support he received from the organization’s officers and board members during his term.

The Tax Cuts and Jobs Act of 2017 affected the tax deduction for interest paid on home equity debt as of 2018.

Under prior law, you could deduct interest on up to $100,000 of home equity debt, no matter how you used the money. The old rule is scheduled to return in 2026.

The bad news is that you now cannot deduct interest on home equity loans or home equity lines of credit if you use the money for college bills, medical expenses, paying down credit card debt, etc.

The good news is that the IRS has announced “Interest on Home Equity Loans Often Still Deductible Under New Law.”