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5/6/2020
Key 2020 Coronavirus Tax Changes
- Early distribution penalty waived
The 10% early distribution penalty on up to $100,000 of retirement withdrawals for coronavirus-related reasons is waived during 2020. New tax rules allow tax liabilities on these distributions to be paid over a three-year period. So if you need the funds, you won't see your tax bill skyrocket in one year. Even better, you can return these distributions back into your retirement account over a three-year period and not be subject to the annual contribution limits.
Action: This could be a great way to handle emergency payments until you receive a stimulus check, unemployment payments, or a pending small business loan. - Required minimum distributions (RMDs) waived for 2020
Required minimum distributions (RMDs) in the year 2020 for various retirement plans is suspended. The corresponding 50% penalty associated with not taking an RMD is also suspended in 2020.
Action: Taking out distributions when the market takes a tumble can hurt retirement income for many years. This change allows you to wait to let the value in your retirement account rebound before you withdraw funds. - IRS installment agreement suspension
The IRS is suspending payments of all amounts due from April 1 through July 15, 2020. If you do not pay your IRS installment payment during this time your installment agreement will not be in default. Interest will continue to accrue on these installment agreements.
Action: Being on the bad side of the IRS is never fun. If you currently have an IRS installment agreement, look to take advantage of this delay. - Offers-in-compromise
The IRS will allow you until July 15, 2020 to provide additional requested information for any pending offers-in-compromise (OIC) and will not close out the OIC during this time without your consent. The IRS is also suspending any payments due under an OIC until July 15, 2020. - Enforcement activities suspended? Not so fast...
The filing and enforcement of liens and levies will generally be suspended. However, IRS Revenue Officers will continue to pursue high income non-filers and initiate other actions when warranted. - No new audits
The IRS will not initiate new audits during this time, but will act to protect the statute of limitations.
850-725-5696
Mike@MikeMcVay.com
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5336 N Blue Angel Pkwy
Pensacola, FL 32526
Certified QuickBooks ProAdvisor & Licensed Tax Accountant Pensacola, FL
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Mike McVay, Accountant Experienced IRS Tax Resolution Specialist
With over 20-years experience working with individuals, families & small business owners. McVay has long term knowledge in taxation to help with their income tax, I.R.S tax issues and businesses management.
850-725-5696
Mike@MikeMcVay.com
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