Only two more weeks until 2020 begins, and a brand-new tax season with it! Check out these tax season tasks to make sure you're all ready, and read on for a few updates from the U.S. Internal Revenue Service (IRS) and Virginia Department of Taxation (TAX).
Virginia's Overall Limit on Itemized Deductions
Virginia Tax is announcing the reinstatement of the Pease Limitation for Virginia income tax purposes, meaning the overall limit on itemized deductions is back in effect beginning with Taxable Year 2019. This is due to legislation enacted by the Virginia General Assembly deconforming from the provision of the federal Tax Cuts and Jobs Act (TCJA) that suspended the limitation. For Taxable Year 2019, the amounts of the Virginia-specific Pease limitation amounts are:
- $326,050 if married filing jointly or a qualifying widow(er);
- $298,850 if a head of household;
- $271,700 if single; and
- $163,025 if married filing separately.
Final Version of 2020 Form W-4
The final version of the 2020 Form W-4, Employee’s Withholding Certificate (PDF) is now available on the IRS website. The new W-4 form better incorporates the changes ushered in by the Tax Cuts and Jobs Act, allowing employees to more accurately estimate the amount of tax they ask their employers to withhold from their paychecks beginning in 2020. In addition, the goal of the new design is to balance simplicity, accuracy and privacy for employees while minimizing burden for employers and payroll processors.
Changes since the last draft include minor edits to verbiage, but more notably, on page 2, under “Your Privacy,” more language was added to help the taxpayer understand exactly what checking the box in step 2(c) may do to withholdings.
The IRS encourages all payroll professionals to become familiar with the new form now so that they can help employers and employees with proper withholding in 2020.
Duplicate CAF Requests
The IRS is working on initiatives to improve the Centralized Authorization File (CAF) process, having noticed a significant increase in duplicate requests (when the same exact request for access to a taxpayer's account was sent in more than once). Sending in duplicate Forms 2848 (Power of Attorney) and 8821 (Tax Information Authorization) will result in processing delays, as both requests must be researched and reviewed. Here’s what you need to do:
- Fax a request once. Faxing forms to the same or multiple numbers will delay processing.
- Double check forms for accuracy. Missing information delays requests.
Reducing the number of duplicates and increasing the accuracy of forms will help the IRS to process requests faster and help with other improvements.