Last month the tax professionals at Storen Financial met to prepare for the 2019 tax season. Over the two day retreat we focused on new tax laws, forms, and other changes as well as reviewed common issues that affect Storen clients from year to year. Every year we strive to improve our products and processes, so we also discussed new ways to streamline while still putting the client first and fulfilling our regulatory obligations. We have some new staff members that were welcomed into the fold and brought up to speed as well.
Some of the new issues we discussed with respect to federal taxes include:
- The new form 1040 (yes, they changed it again!)
- Form 1040-SR, a new version of the 1040 for some taxpayers age 65 and over
- The IRS is focusing on virtual currency (i.e. Bitcoin, etc.) for audit since many people aren’t reporting it, so there is a question on the Form 1040 Schedule 1 that all taxpayers will have to answer starting in 2019
- Setting Every Community Up for Retirement Enhancement (SECURE) Act
- Changes on the Schedule K-1 for Partnerships and S Corporations regarding basis
- If you own a business you likely benefited from the Qualified Business Income Deduction on your 2018 tax return. Starting in 2019, the IRS created some new Forms (8995 & 8995-A) to document aspects of this deduction
- Taxpayer Certainty and Disaster Tax Relief Act of 2019, extended some expiring tax deductions and credits, such as:
- Adjustment to gross income of tuition and fees expenses
- Itemized deduction of medical expenses (over 7.5% of income)
- Itemized deduction of mortgage insurance premiums
- Nonbusiness energy property credit, for energy efficient improvements to principal residence (i.e. windows, doors, furnace, water heater, etc.)
- Health care individual responsibility payment (penalty for not having minimum essential health insurance coverage) is now $0 starting in 2019
- Business entities now have to report the number of Form W-2s they issued for the year, so if Storen doesn’t prepare your payroll please provide a copy of your Form W-3 with your tax documents.
- The IRS developed a new Form W-4 that employees have to use for new jobs or any withholding changes as of January 1, 2020. It is completely different and very complicated; so ask us about it and we can help you fill it out!
There are a number of changes with Indiana taxes as well; here are some of the highlights:
- Indiana income tax on military retirement income is being phased out. Each recipient could exclude $6,250 from taxable income in 2018, but approximately 25% will be excluded in 2019, 50% in 2020, 75% in 2021, and will be fully excluded in 2022.
- Indiana is going to allow some additional depreciation on assets that are no longer allowed to treat as a like-kind exchange (i.e. trading in an old work truck for a newer one)
- Businesses in Indiana are subject to Tangible Personal Property Tax on their assets (assessed by the county). However, if you have less than $40,000 in assets you are exempt from this tax. This was increased from $20,000 in 2018.
- Don’t forget to contribute to Indiana College Choice 529 accounts! You can claim a credit of $1 for every $5 you put into an eligible 529 account (up to a $1,000 credit). There is no requirement for the money to stay in the account for any length of time, and the account can benefit anyone. So if you want to give a gift to a grandchild, niece/nephew, other relative, godchildren, friends, etc. put money into a 529 account for them and you will still get the credit!
At Storen Financial Group, we strive to provide our clients with valuable information and advice in addition to accurate tax returns. We have investment advisors on staff and are conscientious about our clients’ financial needs and retirement plans. We also provide a number of business services to assist our clients who own businesses. Those services include bookkeeping, payroll, 1099 preparation, retirement plan setup and administration, and advising. In addition to the services we provide, we also have partnered with a number of other professionals who can service all our clients’ financial needs. If you need assistance with elder law, business law, real estate, insurance, etc. ask us and we will refer you to a quality provider.
Click here for everything you need for this tax season.
Blog by Tim McGuffin, EA – Business Tax Professional, Accounting Team Lead
Learn more about Tim and the rest of the Storen Financial team here.