No major changes in tax laws for 2020

PRESCOTT – It’s everybody’s least favorite time of the year – tax time.

Soon, people will be getting their 1099s and W2 forms, gathering all their information and taking it to their tax preparer, hoping to get a refund.

Carl Dalrymple, owner of Dalrymple-Crain Accounting, said in some cases those who haven’t changed their withholding information could be paying in. But, basically, the tax laws this year aren’t much different from last year’s.

He said Congress made three changes late in 2019. The first deals with retirement. According to Dalrymple, in the past people could retire at 70.5-years-old, but now they can wait till 72 if they choose before collecting their retirement.

The second change allows those who reach the age of 70.5 to contribute to an IRA account if they so choose. In the past this wasn’t allowed.

Change number three deals with mortgage insurance interest on homes. In 2017 Congress passed a law stating this could no longer be deducted on taxes. Now, not only is this an allowable tax deduction, but Congress made it retroactive to 2017. This means homeowners can file an amended return for this deduction.

Dalrymple said last year the IRS form for S Corporations or individual returns was simple with a 20 percent reduction on the QV2. This year, the IRS has complicated things and the new form is three pages long. Overall, he said, tax returns are getting more complicated.

Otherwise, though, the forms and laws are basically the same as they were in 2019. One major change is those who make charitable donations of $250 or more need to get documentation from the organization donated to as the IRS no longer accepts cancelled checks as proof of donation. Dalrymple said, the information needed should include the date of the donation, the amount of the donation and a disclaimer stating the donor received no goods or services for the donation.

For those who haven’t been paying in their estimated taxes, this needs to be done and the taxes paid in full by March 1 in order to avoid a penalty.

He said the depreciation laws for taxes remain unchanged, and he does his best to help farmers cut their taxes where they can.