Tax Facts

DISCLAIMER:  Any tax advice noted below is based on the facts provided to us and on current tax law interpretation. Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties. Should the information below be incorrect or incomplete or should the law or its interpretation change, our advice may be inappropriate. We are not responsible for updating our advice for changes in law or interpretation after the date noted above. The following cannot be used as support in any tax audit.

In order to better serve you, if you are planning a vacation or extended trip away from home during tax season, please be sure to let us know. If you started a business or purchased or sold a rental property and you did not discuss this with Denise in advance, please call our office and bring this change to our attention.

Mileage Rates and Per Diem Rates

Standard mileage rates: 2019 2018
Business or Employer 0.58 cents 0.545 cents
Medical and Moving 0.20 cents 0.18 cents
Charitable 0.14 cents 0.14 cents

Simplified Employee Pension (SEP) Contributions

There are various rules related to contributing to your SEP plan; our clients should contact us for information on this. For 2018 the maximum contribution is $55,000.00, for 2019 $56,000.00.

IRA Contributions

There are various rules related to contributing to your IRA; our clients should contact us for information on this. For 2018 the maximum contribution for those less than 50 years old is $5500.00. For those 50 years and older the maximum contribution is $6500.00.

The maximum contribution amounts increase for 2019.  Less than 50 years old $6000.00, and those 50 years and older $7000.00.

HSA Annual Contributions

There are various rules related to contributing to your HSA account; our clients should contact us for information on this.

For the 2018 calendar year, the annual limitation on deductions for an individual with self-only coverage under a high-deductible health plan is $3450. The annual limitation on deductions for an individual with family coverage under a high-deductible health plan is $6850. The law previously stated the limit to be $6900. If you made a contribution using the old limit, please contact the custodian of your account and request $50 be pulled from your account. Otherwise, you will be paying a 6% excise tax on the excess. For 2018, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1350.00 for self-only coverage or $2700.00 for family coverage, and the annual out-of-pocket expenses (deductible, co-payments, and other amounts, but not premiums) do not exceed $6650.00 for self-only coverage or $13300.00 for family coverage.

For 2019, annual limit is $3500.00 for individual and $7000.00 for families. Maximum catch-up contributions for people over 55 is $1000.00.

Gift Tax Exclusion

For 2018 and 2019 the amount of the gift tax exclusion has increased to $15,000.00.

The PA government and local municipalities do not allow taxpayers to deduct per diem rates on their income tax returns. You must use your actual expenses.

Check your bank – did your check/payment clear your bank?

Anytime you issue a check to any government agency please be sure the check clears your bank. If the check does not clear your bank within 20 days you need to contact the agency. The bank might be able to help you. If it was from a tax return we completed please call our office so we can resolve the problem.

Direct Deposit

Your refund can be directly transmitted to your bank and deposited into your checking or savings account. You can even transmit your refund to your IRA account. If you plan on depositing your refund into a checking or savings account we will need a photocopy of a blank check or bank identification card, not your debit card. A deposit slip cannot be used. We also need the bank’s routing number and your account number.

Your 401k Statements

Save all your year-end 401k statements until a few years after the account is closed. Include your year-end statement with the tax information you give us at the end of the year.

Marriage/Divorce Checklist

Whether you are getting married or going through a divorce, here is a list of items to keep in mind while going through this life event:

    • Change of name – report it to the SSA. File Form SS-5, Application for Social Security Card. You can either go online to SSA.gov to download and print the form or you can call SSA at 800-772-1213 to order the form, or get it from your local SSA office.
    • Change tax withholding – Our clients should contact us before making changes to their Form W-4.
    • Changes in circumstances – if you receive advance payments of the premium tax credit you should report the changes in circumstances, such as marriage or divorce, to your Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments.
    • Change of address – Our clients should call us with their new address. Let the IRS know if you move. File Form 8822, Change of Address, with the IRS. We will file this form for our clients if you notify us of your address change. You should also notify the U.S. Postal Service. You can change your address online at USPS.com or report the change at your local post office.
    • Review and if needed, change beneficiaries.
    • Change your Will.

Having a yard sale? Please read the following –

Have you ever wondered if you need to pay taxes on the income you earn from selling your used stuff? Typically, since the items sell for far less than what you paid for them, the transaction is tax-free. As long as this is a once or twice a year event—and not a set-up at a farmer’s market or flea market on a regular basis—then you don’t need to worry about profits and losses, sales tax or self-employment tax.

Please remember that our web site is updated twice a year. Tax laws change throughout the year. Certain tax laws may not impact all of us the same. It is very important to contact our office if you have any concerns or questions related to the above information.

DISCLAIMER: Any tax advice noted above is based on the facts provided to us and on current tax law interpretation. Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties. Should the information below be incorrect or incomplete or should the law or its interpretation change, our advice may be inappropriate. We are not responsible for updating our advice for changes in law or interpretation after the date noted above. The following cannot be used as support in any tax audit.