2020 tax filing season is upon us



SIDNEY — “With a full year of the many changes presented by the Tax Cuts and Jobs Act behind us, taxpayers now know more about what to expect during the 2020 tax filing season. The IRS has issued final regulations and guidance in some areas to help further clarify some provisions of this new law. Many corporations, partnerships, limited liability companies and individuals are impacted by these new rules which can provide significant tax saving opportunities for some and be a tax burden for others” according to John Boeckman, president and managing partner of Monnier & Co., CPA’s.

His report continues:

By now many business owners have made the decision regarding the right form of entity to conduct their business. The change in the C-corporation tax rate to a flat 21 peercent, and the new 20% deduction available to owners of “pass-through” businesses, were the primary factors affecting this decision. For many different reasons, our experience has been that most businesses have stayed the course and remained in their current form, however there is no general rule to follow. Each business is different and different factors enter into this choice of entity decision.

Many businesses owners benefitted from the new law. The 20 percent deduction, or Section 199A deduction, essentially allows owners of “pass-through” entities to write off 20% of the income allocated to them. New regulations also allow owners of real estate operations to qualify for this deduction as long as minimum service thresholds are met.

Higher code section 179 limits along with 100% bonus depreciation allows most businesses to write off all new and used equipment purchases. This is a powerful tax benefit which can result in increased cash flows because of the immediate expensing that is permitted.”

For individuals, the state and local tax deduction cap of $10,000 was unpleasant if they were paying significant state and local income taxes. A number of states considered the enactment of a state tax credit for charitable contributions as a way to circumvent the $10,000 limitation. The IRS has issued proposed regulations that prohibit the use of charitable contributions to avoid this limitation.

One rule change that came at the end of 2019 was the change in the age at which minimum distributions are required to be taken from retirement plans. The age was increased from 70 ½ to 72. The change is available to those who turn 70 ½ in 2020.

Monnier & Co. is pleased to announce the addition of three new members to its staff. Joe Vondenhuevel joined the firm after working for a large public company in its internal audit department. Joe is a graduate of Wright State University. Kevin McCarty was a manager with a large insurance processing company and recently switched his profession to accounting. Kevin is a graduate of Sinclair Community College and Wright State University. Deanna Mason came to the firm after working in the tax preparation business for many years. Deanna is a graduate of American Intercontinental University where she received both a Bachelor’s degree and a Master’s degree in business administration. A full-service accounting firm, Monnier & Co. offers traditional audit, accounting and tax services as well as estate planning, merger and acquisition planning, business and individual tax consulting, business succession planning, financial reporting services, business valuations, and technology consulting. The staff at Monnier & Co. is dedicated to providing quality service. We invite you to consult with any of our professionals regarding these or any other accounting or tax issues. Feel free to call us at 937-492-6101 or visit our website at monniercpa.com.