Arizona's tax experts

The Arizona Society of Enrolled Agents (AzSEA) is the professional organization of Enrolled Agents in Arizona, and the Arizona affiliate of the National Association of Enrolled Agents. Enrolled Agents are the only nationally licensed tax professionals, fully authorized to represent taxpayers before the Internal Revenue Service in all states.

Enrolled Agents provide much more than just tax preparation. They are on your side for audits and tax problems. Many provide tax planning, well before the tax return is to be filed. Some provide guidance for new business start-ups and business consulting. Some Enrolled Agents offer bookkeeping, accounting, payroll services, estate planning, financial planning, or investment services.

Foremost, Enrolled agents are tax specialists. Whether for individual or business income taxes, payroll taxes, sales taxes, personal property taxes or estate taxes, look to an Enrolled Agent for a tax expert.

Tax news for Arizona EA's

State filing and payment deadlines

While many states have followed the IRS and pushed back their due dates for filing and payments to July 15, not all states have done so. Here's a list of deadlines by state.

People First suspends collection efforts

The People First initiative by IRS suspends most enforcement and collection activities until July 15. For taxpayers who have an installment agreement in effect, payments will be suspended until July 15 as well. For more details, look at:
-- IRS unveils new People First Initiative; COVID-19 effort temporarily adjusts, suspends key compliance program

IRS issues FAQ for FY19 filing and payment

IRS has issued an FAQ that addresses various questions about filing and payment relief eligibility. Some highlights:

-- Question 3 lists the form numbers whose filing deadlines are postponed to July 15: 1040 series, 1041 series, 1120 series and others.

-- Question 10 addresses whether the relief applies to information returns (No).

-- Question 14 addresses whether electronic funds transfer payments scheduled for April 15 move automatically to July 15 (short answer no, but you can do something about that).

-- Question 16 addresses Q2 estimated income tax payments (due date remains June 15).

-- Question 17 clarifies IRA contributions for TY19 can be made until July 15.

-- Question 22 raises the three-year statute of limitations for claims for refund (no, the "your refund is gone forever" deadline for TY16 returns remains April 15).

IRS also unveiled the "People First Initiative," suspending nearly all collection actions until July 15.

Unanswered questions

Two IRS call centers (in Cincinnati and Fresno) have been shut down by states, while a third (Ogden) is affected by a recent earthquake. In other words, expect slower than normal service when calling IRS. Also, IRS has discontinued face-to-face service throughout the country until further notice.

While the filing and payment deadlines for IRS and AZ have moved to July 15, there are still several loose ends:

1. Contributions for Arizona credits still need to be made by Apr. 15.
2. If an extension to Oct. 15 is needed, filing for an extension is allowed up to July 15.
3. Estimated payment due date for April 15, 2020 is moved back to July 15 but June 15 is not so is still due June 15.

Latest IRS info:
-- Filing and Payment Deadline Extended to July 15, 2020 - Updated Statement
-- Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave

Coronavirus Tax Relief

The IRS and Arizona have extended the due date to July 15, 2020, both for filing Federal income tax returns and for payments due April 15 for individuals and other unincorporated entities.

Associated interest, additions to tax, and penalties for late payment will also be suspended until July 15, 2020. Taxpayers will not need to appy for relief from penalties and interest for payments made during this time.

The IRS established a special webpage at IRS.gov/coronavirus for tax-related information. For more information, see Tax Day now July 15 and Treasury and IRS Issue Guidance on Deferring Tax Payments Due to COVID-19 Outbreak (Notice 2020-17).

Governor proclaims Enrolled Agents Week

Arizona Governor Doug Ducey proclaimed the first week of February as Enrolled Agents Week. The state issues a proclamation for Enrolled Agents Week each year, helping to build public awareness of Enrolled Agents.

New website for taxpayers

AzSEA has launched a new version of its website for taxpayers, TheAzTaxPros.com. It's designed to be a source of information for taxpayers and promote the EA brand. This site, AzTaxPros.org, focuses on AzSEA members and is geared toward tax professionals. Check out TheAzTaxPros.com and invite your clients to visit it.

E-file start dates announced

IRS will start accepting electronically filed personal (1040) returns beginning Jan. 27, and and began accepting e-filed business returns Jan. 7.

IP PIN now available for everyone

Anyone in Arizona and 19 other states now can obtain an IP PIN (Identity Protection Personal Identification Number).

Originally just for victims of identity theft, the IP PIN is being expanded by IRS. As part of the IRS' fraud prevention efforts, it now is an option for anyone even if they haven't had identity problems. See IRS' new Pub 5367 for details.

Improved Tax Withholding Estimator helps workers plan

The IRS has launched a new Tax Withholding Estimator to help workers plan for the right amount of federal income tax to be taken out of their pay.

The IRS completely redesigned the W-4 form for 2020. Income tax withholding is no longer based on an employee's marital status and withholding allowances. Instead, income tax withholding is generally based on the worker's expected filing status and standard deduction for the year. In addition, workers can choose to have itemized deductions, the Child Tax Credit and other tax benefits reflected in their withholding for the year.

2020 mileage rates announced

The business mileage rate for 2020 decreased one half of a cent for business travel driven and three cents for medical and certain moving expense from the rates for 2019, the IRS announced on Dec. 31. The charitable rate is set by statute and remains unchanged. For 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

• 57½ cents per mile driven for business use, down one half of a cent from the rate for 2019,

• 17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and

• 14 cents per mile driven in service of charitable organizations.

IRS releases Final forms for 2019 and 2020 W-4 form

Final (filing) versions of IRS forms are now being released. (Draft versions of IRS forms are still available at https://www.irs.gov/pub/irs-dft/) Some you may want to check out:

• 2019 Form 1040, Individual Income Tax Return and schedules
• 2019 Form 1040-SR, Individual tax return for seniors
• 2019 Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc
• 2019 Schedule K-1 , Shareholder’s Share of Income, Deductions, Credits, etc.
• 2020 Form W-4, Employee’s Withholding Certificate

Arizona forms and Booklet X also are now available online.

2020 Inflation Adjustments announced

The IRS has announced 2020 tax rates, standard deductions and various limitations in a news release and RevProc 2019-44. Also retirement plan contribution limits in another news release and Notice 2019-59.

Tax Forum presentations online

Couln't make one of the IRS Tax forums this year? The 2019 IRS Nationwide Tax Forums presentations are now online. Plus, you can earn continuing education credits for the online programs. For details, see the IRS news release.

IRS announcements & guidance

• Tax Cuts & Jobs Act (TCJA) Center
• Pub 5307, Tax Reform Basics for Individuals and Families
• 20% Qualified Business Income Deduction
• Charitable contributions and state tax credits
• Real estate safe harbor for §199A: Revenue Procedure 2019-38
• 2019-2020 Per-Diem Rates
• Virtual Currency Guidance and FAQ
• Deducting business meals: Notice 2018-76
• FAQ on 20% Deduction for Qualified Business Income
• Section 199A guidance
• 2020 tax rates, standard deductions and COLA's (Rev.Proc. 2019-44)
• Retirement plan contribution limits (Notice 2019-59)
• Standard mileage rates
• Discharged student loans (Rev.Proc. 2020-11)

AZ passes conformity at last

In the “better late than never maybe” category, the Arizona legislature passed conformity to the federal tax code at the end of May. The law, HB 2757, fully conforms Arizona to the federal tax reform law retroactively to 2018. The conformity for 2018 created an estimated $155 million windfall for the state, which the state is keeping. For 2019, tax brackets and numerous other changes attempt to restore the tax situation to close what Arizona’s tax burden was before than reform conformity. For more info:

• Legislative Fact Sheet

• Joint Legislative Budget Committee Staff Memorandum

Final regulations issued for charitable contributions and state tax credits

IRS finalized the regulations for taking federal charitable contribution deductions when those contributions receive a state tax credit. The regulations provide exceptions for dollar-for-dollar state tax deductions and where tax credits of no more than 15 percent of the amount given.

Arizona raises TPT penalties

AzDOR is pushing electronic filing of TPT (sales tax) returns. There are penalties for filing a paper return and for filing late, even if a zero tax due. For more info, visit https://azdor.gov/e-services/e-services-businesses-arizona

Latest handy numbers

Where can you find mileage rates, tax brackets and AZ Standard deductions, and oodles of other juicy numbers? At the FAQ page on the AzSEA website, of course.