IRS Revises Necessary Tax Forms In Time For Filing Season - Form 1099 online

Wednesday 10 June 2020

IRS Revises Necessary Tax Forms In Time For Filing Season

IRS Revises Necessary Tax Forms In Time For Filing Season. With filing season just around the corner, the IRS is receiving out a handful of new and revised tax forms, guidance, and publications. Here are some of the highlights of what to expect in the 2020 tax year.

Form 1040-SR, U.S. Tax Return For Seniors

One of the new forms creating headlines is Form 1040-SR, presently available as a draft. The form, with larger print than the standard Form 1040. This form designed to be more comfortable to read for the approximately 15 million senior households required to file tax returns in 2020.

There are no income boundaries on the kinds of earnings that can be reported on form 1040-SR. Although, the new form is only for use by taxpayers who are at least age 65 years old. If married, both husband and wife must be at least 65 years old. Perhaps most noticeably, the new form prominently represents the standard deduction amounts for the 2019 tax year. The new format also makes it easier to estimate the extra standard deduction amount for seniors or the blind. Since the additional deduction differs depending on marital status, age, and blindness. Having that data on the front page will make it simpler for taxpayers filing paper returns to determine.

Form 1040, U.S. Individual Income Tax Return

The draft of Form 1040 seems much the same as it did the previous year. You may recall that the IRS shortened the first two pages of Form 1040. But introduced many new schedules to compensate. One of those, Schedule 1, is now used to report income like capital profits, earlier reported on the first page of Form 1040. For the 2020 tax filing season, those numbered schedules remain in place. Now, though, Schedule 1 features an extra question.

At any time during 2019, did you get, sell, post, exchange, or otherwise take any financial interest in any virtual currency? The wording is quite near to the language on Schedule B, Interest and Ordinary Dividends, linked to offshore accounts. Though, unlike the questions on Schedule B, the new practical money question isn’t hidden at the bottom. It is prominently exhibited at the top. The question is focused on taxpayers who have failed to report virtual currency transactions and isn’t unexpected. The IRS directing on noncompliance among cryptocurrency investors.

Form 1065, U.S. Return Of Partnership Earnings

There are some vital changes to draft Form 1065 and the relevant Schedule K-1 for 2019. Those differences enter separate lines which have been added for assured payments for services and secured payments for capital. New location to report more than one thing for at-risk purposes and more than one action for passive activity purposes.

The directions continue to develop Section 199A reporting requirements. Now, that data will be reported on a supplemental schedule, instead of directly on Schedule K-1. The addendum will also be used to note when qualified trade income is from a particularized service trade.

Changes to Schedule K-1 have defined reporting requirements that apply to disregarded entities. Taxpayers suggested not to use the taxpayer ID of a disregarded entity. This requirement formerly only listed in the form directions. There is additionally a new checkbox at Item H to note a disregarded entity and name the beneficial owner. Luckily, one expected change to Form 1065 has been pushed back. The IRS newly announced in Notice 2019-66 that the obligation to report partners’ shares of partnership capital on the tax basis method won’t be effective for 2019. It will instead be useful starting in 2020.

Form W-4, Employee’s Withholding Certificate

A basic change to Form W-4 is apparent from the start: the name has changed. The title of Form W-4 modified to Employee’s Withholding Certificate from Employee’s Withholding Allowance Certificate.

IRS Revises Necessary Tax Forms In Time For Filing Season. The need is purposeful. Allowances no longer used for the redesigned Form W-4. In the past, the value of a withholding allowance tied to the individual exemption. However, under the 2017 tax law, the individual exemption is zero, which makes that uncertain. Now the form relies on filing status, dependents, and the number of jobs worked by the taxpayer to decide the proper withholding.

The new form will be beneficial in 2020. Existing workers encouraged, but not needed, to use the new form. However, beginning in 2020, all new employees must use the revised form. Any employees appointed before 2020 who wish to adjust their withholding must also use the redesigned form. The IRS expects to issue a final version of Publication 15-T, Federal Income Tax Withholding Methods, this month. The publication will assist companies with calculating withholding using the revised form W-4. The third new release draft of the publication is available now.

Form 1099-NEC, Nonemployee Compensation

IRS Revises Necessary Tax Forms In Time For Filing Season. Under the Protecting US citizens from the Tax Hikes Act of 2015, the due date for employers to submit forms 1099-MISC for nonemployee compensation was January 31. However, other earnings reported on 1099-MISC Form amounts not related to nonemployee compensation, the due date was Feb. 15.

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