What a year 2020 has been!! Here we are again at the holiday season and the end of a challenging year. We hope you are safe, healthy and can enjoy your family with 6 feet of separation!! It has been a whirlwind year for us too with COVID, a delayed tax filing deadline and an acquisition! As we prepare for the 2020 filing season, we want to give you a few last-minute tax reminders and some heads up on procedures for this years’ tax season.
ORGANIZERS AND APPOINTMENTS: In an effort to reduce paper and embrace the digital age, this year we will be emailing tax organizers, instead of mailing paper copies. These will be sent out in early January. If you would like to request a paper copy, please call our office or reply to the email you receive with the organizer.
As the COVID situation is still scary and vaccines tenuous, we have decided that we will not be scheduling in person appointments for tax season. This was a difficult decision as we look forward to catching up with each of you one-on-one and giving you this option. However, we felt this is the best route to ensuring the health and safety of our staff, and that we make it to the end of tax season for you! Please drop off your tax information at the front desk, mail it, or upload it to our portal as soon as you have it available. We will contact you if we have ANY questions during the preparation or review of your return.
You can upload your tax information, view prior tax returns or other documents in our secure online portal. If you have an active account in our new portal, you can access the portal through the “Portal” link on our website at www.prescottaccountants.com.
OUR TAX DEADLINE for receiving your tax information is March 19th. This means received by our office on or before March 19th. If you have MOST everything except for a late arriving Investment 1099 or delayed Partnership K-1, bring what you have and deliver the late arrivals when they come. This gives us an opportunity to start the preparation process on your return without delay. We cannot guarantee filing by April 15th if we receive your information after March 19th. Any tax returns received after this date may have to file an extension based on your estimate of the tax owed.
MAKE CASH CHARITABLE CONTRIBUTIONS BY DECEMBER 31: The CARES Act (and the new Stimulus Package noted below) allow for a deduction above and beyond the standard deduction for those taxpayers who do not itemize their deductions. This added deduction is $300 for single filers and $600 for Married Filing Joint filers. The contribution has to be made by December 31, so plan accordingly!!
ECONOMIC IMPACT PAYMENTS (STIMULUS CHECKS): The CARES Act set up stimulus payments to taxpayers of up to $1,200 per adult and $500 per child. These payments will not be included in your taxable income for 2020, but instead were an advance payment of a tax credit on your 2020 tax return. The IRS used either your 2019 or 2018 income to calculate the advance payment. Your actual 2020 income will be used to calculate the true credit you are eligible for. If you received less than you were eligible to receive, you will receive a credit for the remainder of the amount you were eligible to receive on your 2020 tax return. If you happened to receive more from the IRS than you were eligible for, you will not have to repay the excess. Since we will be required to reconcile the credit you are eligible for against the advanced payments you received, we will need to know the advance payment when you provide us your 2020 tax information. The new stimulus package also contains another stimulus check. We believe the new stimulus checks will function similarly to the original. We will address this in the correspondence regarding the new stimulus package.
NEW STIMULUS PACKAGE: As we write this, the new stimulus package is working its way to the president’s desk for signature. There are many significant parts of the new law, including stimulus checks, new PPP loans, changes to previous PPP loans, tax credits, charitable deductions, meals deductions and many other items. Please keep an eye out for our update we will be sending out soon with more details.
TAX IDENTITY THEFT: We want to remind you that tax identity theft is a significant and growing threat. Unfortunately, it can take many forms. Be cautious if you:
- Receive a notice or letter from the IRS regarding a tax return, tax bill or income that doesn’t apply to you. It’s possible someone filed a false return using your Social Security number.
- Get an unsolicited phone call, email or other form of communication asking for your bank account number, Social Security number or other financial or personal details.
- Receive a robocall insisting you call back and settle your tax bill.
The IRS will never:
- Call to demand immediate payment over the phone.
- Call about taxes owed without previously having mailed you a tax notice.
- Threaten to immediately bring in local police to have you arrested for not paying.
- Demand that you pay taxes without giving you the opportunity to question or appeal.
- Ask for credit or debit card numbers over the phone.
- Contact you using email, text or other social media channels.
If you receive a call or a tax notice from someone claiming to be from the IRS, do not give them any personal information or make any payments over the phone. We urge you to contact our office for advice whenever you receive a communication from the IRS or believe you might be a victim of identity theft.
ARIZONA TAX CREDITS: If you have any Arizona tax, we recommend making the Arizona individual tax credit contributions. All of the credits listed below are eligible to be paid until April 15, 2021 to receive a credit against your 2020 Arizona taxes. The contributions receive a dollar-for-dollar credit on your Arizona tax return. You can check for eligible organizations on the “ADOR Charitable Organizations” website at www.azdor.gov/tax-credits. The 2020 limits for the credits are as follows.
- Qualifying Charitable Organizations – $800 married filing joint (MFJ)/$400 filing single
- Qualifying Foster Care Charitable Organizations – $1,000 MFJ/$500 single
- Public Schools (including Public Charter Schools) – $400 MFJ/$200 single
- Private School Tuition Organizations (including the PLUS credit) – $2,365 MFJ/$1,183 single
REMINDER: The last estimated tax payment for 2020 is due on or before January 15, 2021. If you need a payment voucher let us know.
NAME CHANGE: We mentioned early on in 2020 that we’d be making a name change to recognize Adam Rutherford as our new partner. We are in fact still changing the name, but because of red-tape with the State Boards of Accountancy and the IRS, we will officially be Slater and Rutherford, CPAs sometime around April/May 2021. Why Slater you ask? Well after 10 years of being divorced, Gidget will be changing her name (permanently) to her maiden name, Slater. We are still the same Gidget and Adam you know and love!!
As always, if you have questions, don’t hesitate to call or email us. We wish you the best this Holiday Season and a HAPPY NEW YEAR!
Gidget Schutte
gidgets@prescottaccountants.com
Adam Rutherford
Schutte & Hilgendorf offers a broad range of professional accounting, tax, and audit services to individuals and businesses throughout Yavapai County and Northern Arizona. With over 40 years combined certified public accounting experience, we specialize in providing services to numerous industry specific areas, including non-profit organizations, homeowner’s associations and construction contracting. We also provide tax planning and preparation, sales tax and payroll tax return preparation, ongoing accounting/bookkeeping, live payroll, and QuickBooks setup and training (QuickBooks Proadvisors). Given our small size, we can still provide a personal touch with professional expertise. Come in and see us anytime at 2086 Willow Creek Road, Prescott, Arizona or call us at 928-778-0079.
