The 2019 tax season is vastly different from the years prior. Below are five things that have affected the 2019 tax season the most.
The government shutdown for three weeks has slowed the IRS down. They are working through the backlog, but individuals are seeing longer wait times for correspondence notices and refund checks.
New Partnership Audit Regime Rules
All Partnerships and LLCs are subject to new partnership audit regime rules. Clients will need to decide whether they want to elect out of the new rules or identify a partnership representative on their tax returns. If you are part of a partnership, you will be receiving more information from us about this.
New QBID Regulations
New Qualified Business Income Deduction final regulations were just released last week. This deduction allows those individuals with pass-through entities a 20% deduction on their tax return, if they qualify. The IRS’s final regulations clear up some of the uncertainty, but anything not touched on will likely need to wait until the 2020 filing season to be addressed due to the timing of the release.
Ecommerce Tax Regulations
State and local tax concerns are growing after the Wayfair The U.S. Supreme Court ruling on South Dakota vs. Wayfair last year. The ruling overturned 26 years of precedent when it comes to e-commerce and tax nexus. Each state is beginning to issue guidance on who’s liable to collect state and local taxes on online purchases and, unfortunately, each state has slightly different rules.
Tax Reform Changes
Tax reform changes are causing uncertainty. The way everything was pushed through Congress at the last minute in December 2017 created a lot of unintended consequences. New items for the 2019 tax season include required due diligence for head of household as well as the earned income tax credit and safe harbor elections for the qualified business income deduction.
Keep Tabs on Changes to Taxes
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