Dear Clients and Friends,
Season’s Greetings from all of us at Beverly and Bucker! We hope that the holidays find you in good health and high spirits. As we prepare for the upcoming tax season, we have some news for our clients and a few announcements.
We’re excited to welcome back Marcel Kay and Christy Gray this tax season! Marcel, a Fredericksburg native, has been with us for three years and has continued his work in the local community between tax seasons. This will be Christy’s second year with us and we are happy to announce that she has passed the Individual Tax portion of the Enrolled Agent Exam. These exams are tough and require a great knowledge of tax preparation. We’re very proud of Christy and glad to have her on the team. As always, we look forward to implementing our knowledge to provide our clients with the best service this tax season.
Last year was a doozy! We had several clients who were surprised by their results, mostly due to under-withholding. It appears that many payroll departments were using inaccurate tax tables and not taking out enough. We’ve checked in with several clients and it seems like the tax tables are more accurate this year, but it’s always good to make sure that you have enough federal and state tax withheld. IRS has provided a “paycheck checkup” on their website. Please visit if you would like to see if you are underwithheld in 2019. If you have concerns, please contact me and we can discuss if an estimated payment is necessary. If you need to make an estimated payment for 2019 it will be due January 15th, 2020.
● Businesses: Note that Partnership and S-Corp business returns are due March 15th If you are a Corporation, S-Corp, Partnership, or Self Employed business owner, we request that you to drop off your information by January 31st, 2020. In many cases, our accounting department will need to complete Year-End Statements for your company that are then used to prepare your tax return. If we do not receive the necessary info to prepare your Year-End Financial Statements by Jan. 31, 2020, we may have to file an extension for your business return. This does not mean that you will incur penalty, be considered late, or be forced to file an extension for your personal returns. We intend to file all returns by or before April 15th. If you know that you would like an extension, feel free to call in now so that we can add you to our list. If you do not want an extension, it is imperative that we receive your information well in advance of the March 15th deadline.
● Investments: If you have investments and receive the brokerage statement in midMarch, we recommend that you drop off your tax papers or make your appointment before receiving these forms. This allows us to prepare the majority of your return in advance. We will be able to apply the brokerage statements as soon as they arrive and complete your return. If you wait to drop off all of your forms before receiving this statement, your taxes may need to be filed for extension.
● Appointments: Please schedule your appointment soon as spaces fill up quickly. If you are unable to find an appointment with your preferred tax preparer, please know that we are all here to provide quality service and prepare accurate tax returns to get you the best results.
● Drop off service: For your convenience, we also offer a drop-off option which saves many clients from having to take time away from work. We are happy to correspond via phone or email while preparing dropped off returns if there are any questions or concerns. Documents can be dropped off at our front desk during office hours or in the drop-off slot to the left of our front door after hours. Please include a phone number with any information you drop off.
● Client Organizer: Client organizers serve as a type of checklist for your tax information. If we’ve prepared your returns in the past, your organizer will show items that you have provided in prior years. Please contact us to request a client organizer if needed. We can send the organizer via mail or email, or you can pick one up in person.
IRS has been sending more letters than we have ever seen before. We responded to twice as many letters in 2019 than we have in any other year. It is possible that this is due to IRS automating more of its correspondence in an attempt to minimize fraudulent returns. Regardless of the reason, it appears that this will continue for the foreseeable future. Know that if we fail to report information that you have provided to us, causing IRS to send a letter of adjustment, we will correspond for you free of charge. However, due to the recent increase in the volume of letters from IRS, we must charge a fee to respond to letters not caused by preparation error.
We would like to reiterate that the IRS will never contact taxpayers via phone. If you receive a phone call from a person or machine claiming to be from the IRS, please disregard or call us immediately. We are here to answer any questions concerning correspondence to or from IRS.

Tax Alerts
October 19, 2020
Tax Briefing(s)

The Treasury and IRS have issued guidance on the recent order by President Trump to defer certain employee payroll tax obligations on wages paid from September 1, 2020, through December 31, 2020. Under the guidance:

The IRS has released the 2020-2021 special per diem rates. Taxpayers use the per diem rates to substantiate the amount of ordinary and necessary business expenses incurred while traveling away from home. These special per diem rates include the special transportation industry meal and incidental expenses (M&IEs) rates, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method. Taxpayers using the rates and list of high-cost localities provided in the guidance must comply with Rev. Proc. 2019-48, I.R.B. 2019-51, 1390.

The Treasury and IRS have issued final regulations that limit the Code Sec. 245A dividends received deduction and the Code Sec. 954(c) exception on distributions supported by certain earnings and profits not subject to the integrated international tax regime created by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97). Proposed regulations and temporary regulations, issued on June 18, 2019, are adopted and removed, respectively.

Treasury has issued final and amended regulations on the rules for distributions made by terminated S corporations during the post-termination transition period (PTTP). These regulations apply after an S corporation has become a C corporation.

Final regulations clarify that the amount of the rehabilitation credit for a qualified rehabilitated building (QRB) is determined as a single credit in the year the QRB is placed in service. This is the case even though the credit is allocated ratably over a five-year period. The final regulations adopt without modification proposed regulations released earlier this year ( NPRM REG-124327-19).

The IRS has released final regulations that clarify the definition of a "qualifying relative" for purposes of various provisions for tax years 2018 through 2025. These regulations generally affect taxpayers who claim federal income tax benefits that require a taxpayer to have a qualifying relative.

The IRS has announced that Medicaid coverage of Coronavirus Disease 2019 (COVID-19) testing and diagnostic services is not minimum essential coverage for purposes of the premium tax credit under Code Sec. 36B.

The IRS has released guidance in the form of questions and answers with respect to certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), and the Bipartisan American Miners Act of 2019 (Miners Act).

Final regulations provide additional guidance on the base erosion and anti-abuse tax (BEAT) under Code Sec. 59A. The regulations also address certain aspects of the BEAT under Code Secs. 1502 and 6031.

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