Health Savings Accounts for 2020

Recently, the IRS announced next year’s contribution limits for health savings accounts (HSAs), as well as requirements for high-deductible health plans (HDHPs) to which HSAs must be linked (Rev. Proc. 2019-25). For 2020, the maximum deductible contribution to an HSA is $3,550 (up from $3,500 in 2019) for self-only coverage, or $7,100 (up from $7,000…

National Taxpayer Advocate’s Mid-Year Report

Nina Olson, the National Taxpayer Advocate, has released her final report (she’s retiring after serving for 18 years) (IR-2019-119, 6/20/19). The report reviews the 2019 tax filing season and lists the challenges facing the IRS. The top challenge: taxpayer service, which she rates as poor and says that lack of funding is no excuse. During…

IRAs Payable to a Trust

When you own an IRA, you can designate who you want to inherit it. This can be a spouse, a child, a trust, or your estate. There are different tax consequences for each type of designation you select. Here are two examples: IRA payable to trust for the benefit of a surviving spouse. A decedent…

What to Know About a CP2000 Notice

If you report income on your return that doesn’t match what’s been reported by banks, brokerage firms, and other third parties, to the IRS, you may receive IRS Notice CP2000 (FS-2019-10). This notice informs you of the mismatch and gives you steps for resolving the issue. Technically, this isn’t an audit. The IRS is just…

IRS Interest Rates Decrease for Q3 2019

The IRS has announced that the interest rates applicable to overpayments and underpayments of federal taxes is lower in the third quarter of 2019 compared with the rates in the second quarter of the year (Rev. Rul. 2019-15). The rates are: 5% for overpayments by individuals and other noncorporate taxpayers 4% for overpayments by corporations…

2019 List of Dirty Dozen Tax Scams

The IRS has released its annual list of the top 12 tax scams that taxpayers should avoid (IR-2019-49). They are essential the same as last year, although some scams are featured more prominently than before. The top tax scams are: Phishing (IR 2019-26): Taxpayers should be alert to the ongoing threat of fake emails or websites…

Parsonage Allowance Is Constitutional

For nearly 70 years, clergy receiving housing (an in-kind benefit) or a housing allowance (a cash benefit) were able to exclude the full amount from gross income. However, the Freedom From Religion Foundation (FFRF) challenged the housing allowance as a violation of the Establishment Clause of the U.S. Constitution. That clause prohibits the federal government…