Tax season is officially underway! As we get into the thick of it, here are some tax news update you should know about.
401K contribution limits increased
Good news! In 2020, you can put more into your 401k. Contribution limits and profit-sharing plans have both increased. Workers can put away an extra $500 and those 50 years old and older can put away another $500 beyond that. Read about it in Forbes here.
New tool for small business owners
The IRS has launched a new online assistant designed to help employers, especially small businesses, easily determine the right amount of federal income tax to withhold from their workers’ pay. It’s called the Income Tax Withholding Assistant for Employers.
New W-4 Tax Withholding Form
You’ve probably already noticed that Form W4 is different. It’s the first overall since 1987. The new form reflects changes to the federal tax code from the Tax Cuts and Jobs Act. According to the IRS, the new form “reduces the form’s complexity and increases the transparency and accuracy of the withholding system.”
New rules on cloud transactions?
The IRS proposed new rules on cloud transactions involving digital content. According to Accounting Today, “The part of the proposed regs that’s most likely to generate controversy involves amending section 1.861-18 of the tax code in terms of the rules on sourcing of articles sold online.” Read the full story here.
IRS Free File Drama
As you know, there’s been a lot of drama surrounding the issues with the IRS Free File program. Well, the Treasury Inspector General for Tax Administration has decided to weigh in with a new report stating the program’s complexity, confusion and lack of taxpayer awareness are contributing reasons why many eligible taxpayers don’t participate in it. Read the news about it here.