What is new in tax filings for 2020 tax period?
IRS tax forms change all the time.
The most beneficial way to find the latest forms is:
Sometimes forms are not updated by the April 15th. You can view a draft of the form to see approximate expectations of what might be new and changed. For example, in 2018 form 1040NR was changed slightly and this change brought a new filing requirement. Those who didn’t see this new change and subsequently didn’t file the new form were subject to penalties of $10,000 and more per year.
Further Consolidated Appropriations Act 2020
Setting every community up for retirement enhancement. (The SECURE act.) Credit for small employers pension startup and auto-enrollment plan, form 8881. Kiddie tax changed (the investment income). Retirement savings and pension changes. Distribution and contribution changes.
Disaster tax relief act of 2019.
- qualified principal residence excluded
- mortgage insurance premiums
- medical expenses floor
- tuition deduction
- Deferral of Social security employer tax payments (now 50% due 12/2021; 50% due 12/2022).
- Sick and family leave credits; Form 7202 credits for sick leave and family leave for certain self-employed individuals due to Coronavirus. Each spouse may be eligible to file a separate Form 7202.
- Additional $300 charitable contribution above the line deduction. $600 for married filed jointly. Must be made in cash to a qualified charitable organization.
- Recovery rebate credit.
- Retirement funds withdrawals. An exception to 10% early withdrawal penalty, not to exceed $100,000.
- Form 8915 (retirement)
- New Employee retention credit form 5888-A
- New casualty loss rules Form 4684
Families First Coronavirus Response Act paid sick leave due to Covid 19, etc
Coronavirus Aid Relief and Economic Security Act recovery rebate, retirement relief, eligible employers employer retention credit
Consolidated Appropriations Act 2021
- Additional 2020recovery rebate credit $600
- Extension of time for repayment of certain deferred payroll taxes through December 31, 2021.
- Expansion of above-the-line $250 teacher tax deduction to include personal protective equipment.
- Farming losses allowances
- Paid sick and family leave extended through Match 31, 2021.
- Reduction in medical expense deduction floor to 7.5%
- Increased phase-out threshold of Lifetime Learning Credit
- Exclusion from income for certain benefits provided to volunteer firefighters and medical responders
- The maximum amount of discharged debt excluded from income is now $750,000 (2021-2015).
- Also, the virtual currency question added to the 1040 form.
- Estimated tax payments added.
- Recovery rebate credit line added.
- Charitable contribution line added.
- Withholding from W2 is different.
- Form 1040-SR is now 4 pages (tax form for seniors) to allow for the bigger font.
- 1099-NEC form for non-employee compensation instead of 1099-MISC. 1099-MISC is for rent, royalty, etc.
3 new separate schedules added:
- Schedule NEC: (not effectively connected income)
- Schedule OI: income exempt from income tax due to treaty
- Schedule A: itemized
Schedule LEP allows individuals with limited English proficiency to change the language of their preference to file their taxes.
1040-X (amended tax return) can now be filed online (tax returns for years 2019 and subsequent years). In order to e-file an amended return, an original return must have been e-filed as well.
The $1,200 & $600 rebates:
Generally, you are eligible to claim the Recovery Rebate Credit if you were a U.S. citizen or U.S. resident alien in 2020, cannot be claimed as a dependent of another taxpayer for the tax year 2020, and have a Social Security number valid for employment that is issued before the due date of your 2020 tax return (including extensions).
Reference: https://www.webcaster4.com/ IRS video CPE