Jassen Bowman EA
Jassen Bowman EA

Six Financial Best Practices for Year-End 2020

By any measure, 2020 has been an interesting year. Tens of millions of Americans have faced unemployment, and millions of small businesses have had to scale back operations, or even worse, close permanently. And right when things start to feel like they’ll return to normal, something else happens.

Thankfully, with multiple COVID-19 vaccines in the works, there’s hope the load will lighten in the new year, which is fast approaching. While we prepare for a fresh start, here are six financial best practices for year-end 2020 and beyond, none of which require any heavy lifting.

  1. Give as you’re able, get a little back. What the 2017 Tax Cuts and Jobs Act (TCJA) took from charitable giving, this year’s CARES Act partially gave back – at least for 2020.
  • A $300 “Gift”: Under the TCJA, it became much harder to realize itemized tax deductions beyond what the increased standard deductions already allow. But this year, the CARES Act lets you donate up to $300 to a qualified charity, and deduct it “above the line.” In other words, even if you’re taking a standard deduction, you can give a little extra, and receive an extra tax break back, without having to itemize your deductions.
  • Giving Large: If you are itemizing deductions, the CARES Act also temporarily suspends the usual “60% of your AGI” limit on qualified cash contributions. The exception does NOT apply to Donor Advised Fund contributions, and has a few other restrictions. But if you’ve already been thinking about making a large donation to a favorite charity, 2020 might be an especially good year to do so – for all concerned.
  1. Revisit life’s risks. As the pandemic reminded us, life is full of surprises. That’s why it’s imperative to build wealth, and protect it against the inevitable unexpected. Is your current coverage still well-aligned with your potentially altered lifestyle? Perhaps you’re driving less, with lower coverage requirements. Or new health or career risks now warrant stronger disability insurance. Might it be time to consider long-term care or umbrella coverage? Bottom line, there’s no time like the present to prepare for your future greatest risks. 
  1. Leverage lower tax rates. While it’s never a sure bet, Federal income tax rates seem more likely to rise than fall over the next little while. Even before this year’s massive relief spending, the TCJA’s reduced individual income tax rates were set to expire after 2025, reverting to their prior, higher
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Expand Your Practice by Becoming a Certified Taxpayer Representative™

Until recently, it has been difficult for tax professionals to enter into the tax resolution world. Many have been put off by the idea of having to learn a completely new area of practice and procedure, let alone having to delve into the gory morass of the Internal Revenue Manual. However, new training options have put tax resolution certification within reach of more  tax professionals. This means that there are more ways to expand your practice.

What Is a Tax Resolution Specialist?

A tax resolution specialist is someone who helps people resolve any open debt that they may owe to the IRS. Along with tax resolution specialists, those who receive this type of training are also referred to as:

• Taxpayer representatives
• Tax relief specialists
• Tax controversy professionals
• Tax problem recovery experts

More tax professionals are starting to offer tax resolution services. If you decide to expand into tax assistance, it will give you a way to increase your income, as these cases tend to pay well. They also give you greater flexibility in how you run your business. This makes it a service that you can offer your clients year-round, giving you a way to earn a steady income instead of focusing on making most of your income when tax season rolls around.

Tax Resolution Services

Tax resolution training includes teaching you how to deal with tax issues such as:

• Examination representation
• Offers in Compromise
• Liens and levies
• Installment Agreements
• Innocent and injured spouse relief
• Penalty abatements
• Trust Fund Recovery Penalties

…and, of course, the proverbial “much, much more!”

Examination Representation

If you decide to offer examination representation services, then you’ll be standing in for a client during a tax audit performed by state officials or the IRS.

Offers in Compromise

During your taxpayer representation program, you’ll learn how to submit an offer in compromise to the IRS when it is appropriate to do so. This is the area of the tax law that allows your clients to settle their tax debt for a lower amount than what is owed. During your training course, you’ll learn when this is the best option for your clients, who qualifies, and how to get the best possible “deal” for your client.

Liens and Levies

When one of your clients owes unpaid taxes, the IRS may issue a levy. This will allow the agency to seize your client’s … Continue reading

IRS Announces 2021 PTIN Renewal Requirements & Fees

The IRS has announced that the 2021 PTIN renewal window is now open. All current PTINs will expire on December 31, 2020.

All tax professionals, regardless of licensure, must renew their PTIN if they prepare any return or claim for refund in 2021. The total renewal fee is $35.95, of which $21 goes to the IRS and $14.95 goes to the federal contractor administering the PTIN registration program. Once paid, nobody can receive a refund on these fees.

All Enrolled Agents must also renew their PTINs, regardless of whether or not they prepare tax returns, and without regard to your normal EA renewal year. In other words, all EAs, including those only offering taxpayer representation services, must hold a valid PTIN at all times. This requirement does not apply to CPAs and attorneys engaged in taxpayer representation if they are not also preparing tax returns for a fee.

To renew your PTIN for 2021, or to apply for your first PTIN if you are a new tax practitioner, simply visit the IRS PTIN system here: https://rpr.irs.gov/datamart/mainMenuUSIRS.do

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