What is a Form 1099-NEC?
Form 1099-NEC is essentially an information report that is required to be sent to certain recipients who have been paid during the year in the course of a trade or business. A copy of the Form 1099-NEC is also reported to the Internal Revenue Service (and some states) for their records as well. Failure to file a required 1099-NEC may result in denied expense deductions upon audit and additional penalties and fees (typically $30 to $100 per missed filing for federal purposes).

Form 1099-NEC Filing Requirements
Form 1099-NEC must be filed when ​Non-employee Compensation of $600 or more is paid during the year to a non-employee. Includes payment for professional services (fees to attorneys, accountants, engineers, repairman, etc.).

1099-NEC Filing Exemptions
There are a few cases when Form 1099-MISC does not need to be filed even though it may have met the aforementioned requirements.  A few examples are as follows:

• Note that 1099-NEC generally do not need to be issued to corporations.
• Amount paid via credit card, debit card, or third-party settlement company (i.e., PayPal) should not be reported on a 1099-NEC as they will be now be reported on Form 1099-K by the bank or third-party.

​
Tax Reporting of 1099-NEC
There is now a question on tax returns which specifically ask if a business was required to issue 1099s and if so, whether they were filed.  Therefore, the IRS has implemented extra measures to make sure the 1099-NECs are filed and will likely begin strictly enforcing the rules.  It is advised to collect a Form W-9 from all vendors so that 1099-NECs can be issued if needed.

Form 1099-NEC Due Date
Form 1099-NEC is due each year to the recipient and IRS by January 31st. The new accelerated deadline will help the IRS improve its efforts to spot errors on returns filed by taxpayers.  ​

For more information on form 1099-NEC and 1099-Misc visit the IRS website. 

Things to know right off the bat: 

• March 15th - Tax day for Partnerships and S-Corps. Must file a 2020 return or an extension by Monday, March 15th.
• April 15th - Tax day for Individuals, C-Corps and Trusts. Must file a 2020 return or an extension by Thursday, April 15th. 
• The standard deduction for 2020 increased to $12,400 for single & married filing separately filers, $24,800 married couples filing jointly and $18,650 for Head of Household filers.

Tax Deductions and Credits to Consider for the 2021 Tax Season
Tax deductions help lower how much of your income is subject to federal income taxes. While tax credits lower your actual tax bill dollar for dollar. These credits can be refundable or nonrefundable. 

• Charitable Deductions:  In an effort to encourage more charitable giving, the CARES Act allows you to deduct up to 100% of their adjusted gross income (AGI), which is your total income minus other deductions you have already taken, in qualified charitable donations if you plan to itemize their deductions. 

            If you're taking the standard deduction, the CARES act added a new "above-the-line" deduction                that will help you write off up to $300 of charitable contributions you made in cash. 

• Medical Deductions: You can deduct any out of pocket medical expenses above 7.5% of your adjusted gross income (AGI). You must itemize your deductions to write off medical expenses on your tax return. 
• Business Deductions: 
  • Self-employed taxpayers are able to deduct business expenses which are defined as "the cost of carrying on a trade or business". These expenses include the following: 
    1. Cost of goods sold, capital expenses, business use of home, business use of car, employee's pay, retirement plans, rent expense, interest, taxes and insurance. For more information on what you can deduct as a Self-employed tax payer.
  • If you are one of the millions of workers who was sent home to work remotely during the pandemic, you won't be able to claim a home office deduction. This is reserved for self-employed individuals only. 
• Earned Income Credit: The EITC is a refundable credit to help out low and middle income workers earning up to $56,844 during the 2020 tax year. Depending on your income, your filing status and how many children you have, the credit could save you anywhere from a few hundred to a few thousand dollars on your taxes.
• Child Tax Credit: Families can claim up to $2,000 per qualified child with this tax credit (the income limits for this credit are $200,000 for single parents and $400,000 for married couples). And since this is a refundable credit, your family can receive up to $1,400 per child as a refund.

CARES Act: 

• Stimulus Checks: As part of the Cares Act the government sent up to $1,200 in the form of a stimulus check to millions of Americans. Your stimulus check will NOT count as taxable income. Your stimulus check will be treated as a refundable tax credit for 2020. 
• Paycheck Protection Program (PPP) Loans: The CARES act also offered Paycheck Protection Program loans to struggling small business owners. As long as these loans were used on certain business expenses - payroll, rent or interest on mortgage payments, utilities and a few others - these loans were designed to be forgiven. 
  1. Any expenses paid with the money from a PPP loan cannot be deducted from your taxable income. 
  2. In addition, you'll have to get your loan forgiveness application approved by the Small Business Administration before you're off the hook for the amount you borrowed. The SBA is moving slowly in its processing of 5.2 million borrowers, so this process will drag on for a while. 
• 529 Plans & Educational Savings Accounts (ESAs): If you withdrew any funds from your 529 plan or ESA, these funds need to be spent on qualified educational expenses in order to be tax-free. 
  1. If you paid for qualified education expenses with the funds and then were refunded due to the pandemic, you have 60 days to put that money back into the account or use it to cover other qualifying expenses. If this isn't done within 60 days, you might have to pay income taxes and a withdrawal penalty on the withdrawn funds. 
  2. You can now use 529 plans to pay for the cost of certain apprenticeship programs - including fees, books and supplies.
  3. You can also use money from a 529 plan to pay off up to $10,000 in student loan debt without having to pay any penalties or taxes ($10,000 total - not annually).  
• Unemployment Benefits: Any money you received through unemployment benefits is taxable and you will need to pay income taxes on that money. If you did not have taxes withheld from you unemployment benefits or if you usually receive a refund on your tax return, you may have a larger than normal tax bill for 2020. 

Retirement Plans - 401(k)s, IRAs and more: 

• The CARES Act allowed folks under age 59 1/2 to take up to $100,000 out of their 401(k)s or IRAs in 2020 without having to pay an early withdrawal penalty. If you took an early withdrawal in 2020 from a traditional 401(k) or IRA, that money will be taxed as ordinary income. 
  1. If you took money out in 2020 and have a larger tax bill, you have three years to put those funds back and receive a refund for the taxes you paid on that money. 
• The SECURE Act increased the age that required minimum distributions (RMDs) have to be taken at from 70 1/2 to 72. In addition to the SECURE Act, the CARES Act allows seniors to skip RMDs altogether in 2020 without penalty. ​

 

Updated PPP Rules: 
Here are six ways the law attempts to make using PPP loans easier:  

1. You now have 24 weeks to spend your funds, up from eight weeks .
2. You need to spend 60% of the loan on payroll, down from 75%.
3. The covered period of the loan now ends Dec. 31 instead of June 30.
4. You won’t have to make employer payroll tax payments through the end of 2020.
5. Your business will not lose any loan forgiveness eligibility if you can show that some employees declined to return to their jobs or the pre-pandemic headcount is no longer required.
6. The payback period for new loan applicants has been extended from two years to a minimum of five for those not seeking or who are ineligible for forgiveness.

Original Post: https://www.cpapracticeadvisor.com/tax-compliance/news/21137315/loan-forgiveness-under-the-paycheck-protection-program-and-next-steps

The Coronavirus Aid, Relief, and Economic Security (CARES) Act established the Paycheck Protection Program (PPP) as an incentive for small businesses to retain employees during the COVID-19 pandemic. The program provides a low-interest loan to eligible small business owners, self-employed individuals, and other eligible businesses, including nonprofit organizations, and is meant to cover payroll, mortgage interest, rent, and utilities over an 24 week period.
The maximum loan amount is 2.5 times the average monthly payroll from the previous calendar year and is capped at $10 million per business. The application period began on April 3, 2020, and runs through when all the funds have been committed. The loan carries a maturity of two years and a 1% interest rate.

• Loan forgiveness

A PPP loan may be forgiven, in whole or in part, if all employees are kept on the payroll for 24 weeks. Clients apply for forgiveness from the lender 24 weeks after loan disbursement, and the lender is responsible for determining eligibility. You don’t have to use all proceeds in the 24 week period, but it won’t be forgiven for any funds that are spent afterwards. Loan forgiveness is limited to the loan principal plus accrued interest. For tax purposes, forgiven loan amounts are excluded from gross income and associated expenses are not deductible.
The following expenses are included in loan forgiveness and the non-payroll items are capped at 40% of the loan proceeds:

• Payroll costs
• Mortgage interest payments (for buildings purchased before Feb. 15, 2020)
• Rent payments (for leases dated before Feb. 15, 2020)
• Utility payments (electricity, gas, water, transportation, phone, and internet for agreements dated before Feb. 15, 2020)
• Additional wages paid to tipped employees

Qualifying payroll costs include employee compensation in the form of salaries, wages, tips, commissions, employee benefits, health insurance premiums, retirement benefits, and state and local taxes assessed on compensation. However, you need to exclude Social Security and Medicare taxes.

• Reduction in salary/wages and headcount

Your clients’ allowable forgiveness is reduced if there is a decrease during the 24 week period of more than 40% of the total salary or wages for any employee, compared to the most recent full quarter they were employed before you received the PPP loan. Don’t count any employee who had salary or wages higher than $100,000 in 2019.
Your clients’ allowable forgiveness is reduced for any decrease in the number of full-time equivalent (FTE) employees by comparing the average number of monthly FTE employees employed during the 24 week period after they receive your loan with either a) the average monthly FTE level for Feb. 15 through June 30, 2019, or b) Jan. 1 through Feb. 29, 2020.
However, you won’t be penalized for any reduction occurring between Feb. 15, 2020, through April 26, 2020, if the reduction is eliminated by June 30, 2020.

• Recordkeeping

Determining how you use the loan proceeds is important because all or a portion of the loan is forgivable, and the remaining balance needs to be repaid over a two-year period at a 1% interest rate. We’re still awaiting final guidelines on forgiveness from the U.S. Treasury and Small Business Administration.
Records your clients need to maintain:
Number of employees on the payroll, employee pay rates and salary levels, payroll tax filings, and payroll costs paid in the 24 weeks after loan disbursement. Your clients will be asked to compare the average number of monthly FTE employees they employ during the 24 week period after they receive their loan with either a) the average monthly FTE level for Feb. 15 through June 30, 2019, or b) Jan. 1 through Feb. 29, 2020.

• Mortgage interest payments in the 24 weeks after loan disbursement.
• Rent or lease payments in the 24 weeks after disbursement.
• Utility payments in the 24 weeks after disbursement.
• Any advance received from an Economic Injury Disaster Loan (EIDL).

Tracking expenses
All of these expenses must be paid within 24 weeks from the date the funds hit your clients’ bank to qualify for forgiveness. At the end of those eight weeks, your client can apply for PPP loan forgiveness with their lender. It will be helpful to track this information on spreadsheets or through QuickBooks. Here are some tips if your clients use QuickBooks and its tracking features:

• Create the PPP loan as a long-term liability account.
• Create a bank deposit or use a bank feed.
• Categorize any PPP-related expenses (and consider using PPP tags, notes, projects, and classes for optimal tracking).
• Break out your payroll expenses to account for the following, and possibly export to a spreadsheet if you don’t want to make permanent changes to your chart of accounts:
  • 60% threshold
  • Exclusion of federal taxes paid
  • Exclusion of salaries above the $100,000 annual cap ($8.333.33 per month)
• Run reports because you’ll apply for loan forgiveness at the end of the 24 week period:
  • Create a profit and loss statement for the 24 week period by using tags or classes, or by filtering on any relevant expense categories.
  • If you use QuickBooks Payroll, you can run a payroll tax and wage summary, exclude federal tax payments, and export it to a spreadsheet.

WHAT THE SBA SAYS ABOUT IT: ​https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program#section-header-7

Do I have to pay tax on my stimulus payment?
No. The tax rebate is an advance payment of a special 2020 tax credit…so it is nontaxable.

I owe back taxes. Will my rebate be reduced?
No. IRS will not apply the stimulus payment to offset past-due taxes or other federal or state debt,
except for delinquent child support owed by a person.

My wife and I had a baby in Feb. Will we get an extra $500 tax rebate?
Yes, assuming you otherwise qualify…but not this year. On your 2020 return, which you will file next year, you will reconcile the rebate money that you received with your actual tax situation. If you otherwise qualify for the tax rebate break, you get an extra $500 refundable credit for your newborn on your 2020 Form 1040.

I just got my rebate. What if my 2020 AGI ends up being too high to qualify?
Do I have to repay the money?
No. Rebates generally don’t need to be repaid. For more on stimulus payments, see www.kiplinger.com/letterlinks/checks. It has answers to lots of queries and includes a description of two new IRS web tools: One is for people who would qualify for a stimulus payment but didn’t file a 1040 for 2018 or 2019 because their income was under the threshold amount to file a return. The other is for people to enter bank account information to get their rebates faster through direct deposit, and for individuals to check on the status of their payment.

I took a required minimum distribution from my traditional IRA in Feb.
Now that Congress has waived RMDs for 2020, can I put it back into the IRA?
Yes, and it will be treated as a tax-free rollover, provided you return the funds to the IRA by July 15, and you don’t violate the one-rollover-every-12-months rule. Normally, you have 60 days to do a tax-free rollover, but IRS extended the time period for rollovers otherwise due between April 1 and May 15 of this year to July 15. If you took an RMD in Jan., you’re out of luck…at least for now. You can’t redeposit the funds back into the IRA and treat it as a tax-free rollover. But tax practitioners tell us they expect the Revenue Service to issue guidance on the new RMD waiver, and that those rules may provide broad rollover relief.

My small business is applying for a Paycheck Protection Program loan.
If my firm gets the loan and it is forgiven, is the canceled debt taxable?
No. The stimulus law says that loan amounts forgiven under the PPP are nontaxable.

Are unemployment benefits taxable? Yes, for federal income tax purposes.
State taxation is a mixed bag. 33 states and D.C. fully tax the income. Ind. and Wis. tax them in part. Ala., Calif., Mont., N.J., Pa. and Va. don’t tax them. Alaska, Fla., Nev., N.H., S.D., Tenn., Texas, Wash. and Wyo. have no income tax.

New Paying and Filing Deadline - July 15th
The IRS, OR and the City of Portland have moved the filing and paying deadline from April 15th until July 15th. This included paying, filing, HSA & IRA contributions, 1st Quarter Estimates (IRS only) and other deadlines. Oregon and City of Portland have NOT changed 1st quarter estimate, it is still April 15th. Not all states are following exactly in line with the IRS. Please click the link to find out who is and who isn't. April 15th - New Deadlines

Unemployment, Self-Employed Relief & Portland Small Business Relief Fund
The CARES act was signed into law on March 27, 2020 and will expand Unemployment Insurance benefits. Link
In the near future, they will provide guidance to customers on the:

• Federal Pandemic Unemployment Compensation weekly benefit of $600
• Benefits for self-employed individuals, including those working in the "gig" economy
• Expansion of unemployment benefits for individuals whose benefits will soon expire
• Benefits for individuals unable to start new work because of the pandemic

The Portland Small Business Relief Fund will provide grants and no interest loans to support Portland small businesses experiencing hardships related to COVID-19. Link

Economic Impact Payment
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.
Economic impact payments: What you need to know

Employee Retention Credit 
 IRS: Employee Retention Credit available for many businesses financially impacted by COVID-19 Link

• The Treasury Department and the IRS launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19. 

FAQs: Employee Retention Credit under the CARES Act Link

• The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, is designed to encourage Eligible Employers to keep employees on their payroll, despite experiencing economic hardship related to COVID-19, with an employee retention tax credit (Employee Retention Credit). 

 
Families First Coronavirus Response Act
 Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave Link

• The Families First Coronavirus Relief Act (FFCRA) requires certain employers to pay sick or family leave wages to employees who are unable to work or telework due to certain circumstances related to COVID-19. Employers are entitled to a refundable tax credit for the required leave paid, up to specified limits. [See FAQs]. The same wages cannot be counted for both credits. 

• Two sets of FAQs: 

1. FAQs from the U.S. Department of Labor, Wage and Hour Division: DOL Families First Coronavirus Response Act: Questions and Answers. Link
 2. FAQs from the IRS: COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs Link
  
Employers 
 See FAQ #6 on this page: Link 

• Q6. Does the relief provided in the Notice apply to payroll or excise taxes? 

• A6.  No, under the Notice, normal filing, payment, and deposit due dates continue to apply to both payroll and excise taxes. (See exception in Notice 2020-22.)

Relief from Penalty for Failure to Deposit Employment Taxes 

• Notice 2020-22 provides a waiver of additions to tax for failure to make a deposit of taxes for employers required to pay qualified sick leave wages and qualified family leave wages mandated by the Families First Coronavirus Response Act (Families First Act) and qualified health plan expenses allocable to these wages.  

• This notice also provides a waiver of additions to tax for failure to make a deposit of taxes for certain employers subject to a full or partial closure order due to the coronavirus disease 2019 (COVID-19) or experiencing a statutorily specified decline in business under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  

• Please see Notice 2020-22 for more details.

 
 Assistance For Businesses 
The SBA can help! Link
 Two SBA emergency capital programs are available today and more will be coming soon:

1. Low interest, long term Economic Injury Disaster Loans for up to $2 million: The first payment is deferred for 12 months. The application has been simplified and can be completed 100% online through our improved web portal at  www.sba.gov/disaster. 
2. Economic Injury Disaster Loan Advance for up to $10,000: The form to apply is part of the economic injury disaster loan application. If approved, these funds can be used for payroll and other operating expenses and will be forgiven. 

Soon the SBA and Treasury Department will launch the new Paycheck Protection Program to help keep employees on payroll and small businesses operating. Additional information about this program will be shared in the coming days. Link
 Find your local SBA office here. Link

Check IRS.gov for the latest information: No action needed by most people at this timeIR-2020-61, March 30, 2020
WASHINGTON — The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.

Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.

How will the IRS know where to send my payment?
The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.
For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.

The IRS does not have my direct deposit information. What can I do?
In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

I am not typically required to file a tax return. Can I still receive my payment?
Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.

How can I file the tax return needed to receive my economic impact payment?
IRS.gov/coronavirus will soon provide information instructing people in these groups on how to file a 2019 tax return with simple, but necessary, information including their filing status, number of dependents and direct deposit bank account information.

I have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?
Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.

I need to file a tax return. How long are the economic impact payments available?
For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.
Where can I get more information?The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.
​
The IRS has a reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.

Check Your Withholding
The 2017 tax overhaul lowered tax rates across the board, but it also scrapped some popular tax breaks. As a result, some taxpayers who were accustomed to receiving a refund ended up owing the IRS when they filed their 2018 tax return. 
 
If you were part of that band of disgruntled taxpayers, you may be able to take steps between now and year-end to avoid another April surprise. Use IRS's Tax Withholding Estimator and Oregon Withholding Calculator as soon as you can to determine where you should file a new W-4 with your employer and increase the amount of tax withheld from your paycheck before the end of the year. You'll need your most recent pay stub and a copy of your 2018 tax return to help estimate your 2019 income. 
 
Pay Bills Now (Including Some for 2020)
Unless your finances have changed significantly, you probably have a pretty good idea whether you'll itemize or claim the standard deduction when you file your 2019 tax return. If you plan to itemize—or you're close to the threshold—now is a good time to prepay deductible expenses, such as mortgage payments and state taxes due in January.

Review your medical bills. If you have enough unreimbursed medical expenses, you may be able to deduct them. In 2019, you can only deduct unreimbursed medical expenses that exceed 10% of your adjusted gross income (in 2018, the threshold was 7.5%). That puts this tax break out of reach for most taxpayers, but if you had extraordinarily high medical expenses this year—due to a major illness, for example—you may qualify.

And there's still time to schedule appointments and procedures that will increase the amount of your deductible expenses. The list of eligible expenses includes dental and vision care, which may not be covered by your insurance.

Prepay tuition. If you're the parent (or grandparent) of a college student, you may be able to lower your 2019 tax bill by prepaying the first quarter tuition bill—and you don't need to itemize to claim this tax break. The American Opportunity Tax Credit, which you can take for students who are in their first four years of undergraduate study, is worth up to $2,500 for each qualifying student. Married couples filing jointly with modified adjusted joint income of up to $160,000 can claim the full credit; those with MAGI of up to $180,000 can claim a partial amount.

Likewise, if you're planning to take a class next year to boost your own career, consider prepaying the January bill before December 31 so you can claim the Lifetime Learning Credit on your 2019 tax return. The credit is worth up to 20% of your out-of-pocket costs for tuition, fees and books, up to a maximum of $2,000. It's not limited to undergraduate expenses, and you don't have to be a full-time student. Married couples filing jointly with MAGI of up to $116,000 can claim the full credit; those with MAGI of up to $136,000 can claim a partial credit.

Look into an ABLE account. If someone in your family has special needs, you can contribute up to $15,000 this year to an ABLE account, which allows people with qualifying disabilities to save money without jeopardizing government benefits (ABLE account beneficiaries can contribute more to their own account). You don't have to invest in your own state's plan, but if you are a resident of one of the states that do offer a tax break for ABLE accounts, you can deduct your contribution. For more information, go to the ABLE National Resource Center's website. 

Reap the Tax Harvest
​The tax code allows you to sell investments that have fallen below your purchase price and use the resulting loss to offset capital gains in taxable accounts. That's a compelling reason to consider jettisoning your losing positions. Investments that you've held for a year or less are taxed as ordinary income, but investments you've held longer are taxed at the long-term capital gains rate, which ranges from 0% to 23.8%.
     
After matching short-term losses against short-term gains, and long-term losses against long-term gains, any excess losses can be used to offset the opposite kind of gain. If you still wind up with an overall net capital loss, you can use up to $3,000 of that loss to offset ordinary income and roll the rest over to the following year. Note that once you sell an asset at a loss, you must wait 30 days before reinvesting in it or buying a substantially identical investment.
Single investors with income less than $39,375 ($78,750 for joint filers) pay no capital gains tax on investments held for more than a year. If that's the case, it may make sense to sell winning investments tax-free and reinvest (no need to wait 30 days), effectively resetting the odometer on future gains.
 
Watch for Capital Gain Distributions
Mutual funds are required to pay out to their shareholders any gains realized from the sale of stocks or bonds during the year. If you own the fund in a taxable account, you must pay taxes on these distributions when you file your tax return, even if you reinvest them.
     
If you get hit with a distribution, review your portfolio to see if you have any mutual funds, stocks or bonds that have declined in value since you purchased them. Selling them before year-end will provide losses to offset your gains. Mutual funds typically publish an estimate of their capital gains distributions in November or December, along with the date of the distribution. Estimates are on a per-share basis, so if you figure out how many shares you have, you can gauge the size of your distribution.
    
Interested in buying a fund before the end of the year? Check its website first. If the fund plans to make a capital gains distribution, postpone your purchase until after the distribution date. Otherwise, you'll have to pay taxes on gains racked up before you got on board.

Max Out Your Pre-Tax Retirement Savings
As the year comes to a close, you may be able to squeeze a little more money from each paycheck for your retirement savings. You can contribute up to $19,000 to a 401(k), 403(b) or federal Thrift Savings Plan in 2019, plus $6,000 in catch-up contributions if you're 50 or older.
Pretax contributions will lower your take-home pay and reduce your tax bill. If your employer offers a Roth 401(k), you can make contributions that won't lower your taxable income now but that can be withdrawn tax-free in retirement. If your employer offers both types of plans, you can direct new contributions to the Roth 401(k) rather than the pretax 401(k) at any time.
​     
Contact your 401(k) administrator or your employer's human resources department ASAP to find out how much you're on track to contribute to your 401(k) by the end of the year and to ask about the steps you need to take to boost your contributions. The earlier you make the change, the better: 401(k) contributions are made through payroll deduction. If you're contributing to a traditional or Roth IRA for 2019, you have until April 15, 2020.
    
If you aren't on track to max out your retirement account for the year, adding money from a year-end bonus can be a great way to boost your contributions without affecting your regular take-home pay. Rules vary, and some plans don't allow participants to contribute their bonus. Also make sure that you don't cross the annual contribution limit. You have until the tax-filing deadline to withdraw any extra contribution and the earnings on it, which will both be taxable. If you don't take it out, the excess contribution will be taxable now and you'll have to pay taxes on it again when you finally withdraw the money.

401(k) and 403(b) retirement plans must be establishes by December 31st 2019. SEP IRA's must be established before your 2019 taxes are filed.
 
Open a Donor-Advised Fund
Putting your money or other assets, such as stocks or personal property, in a donor-advised fund allows you to deduct the entire contribution in the year you make it and decide later how you want to dole out grants to charities of your choice. You can open a donor-advised fund at financial-services firms such as Fidelity Charitable (minimum investment: $5,000) or Schwab Charitable ($5,000 minimum) or at community foundations. Contributing one lump sum this year may help lift your deductions above the standard deduction amount and allow you to itemize.


Max Out Charitable Donations (and Declutter)
Donating clothes, kitchenware or furniture you no longer need can also boost your deductions while helping a worthy cause. You'll base your deduction on the donated item's "fair market value" (or what it might sell for at a thrift or consignment shop)—you can use online tools such as TurboTax's ItsDeductible tool to estimate this value. You will need a written acknowledgment from the organization if you are claiming a contribution of $250 or more (consider snapping a photo of the donation for your records). For donated items valued at more than $5,000 (art, antiques, etc.), plan on providing a written appraisal.
 
Transfer IRA Money to Charity
Taxpayers who are 70½ or older can transfer up to $100,000 from a traditional IRA tax-free to charity each year, as long as they transfer the money to the charity directly.
 
The "qualified charitable distribution" will count as your required minimum distribution without being added to your adjusted gross income, which can be a boon if you were going to take the standard deduction instead of itemizing (you can't deduct charitable transfers). The transfer could also help keep your income below the threshold at which you're subject to the Medicare high-income surcharge as well as hold down the percentage of your Social Security benefits subject to tax. Make a QCD well in advance of New Year's Eve because the money has to be out of the account and the check needs to be cashed by the charity by December 31.
 
Consider a Roth Conversion
Consider con­verting some money from a traditional IRA to a Roth IRA this year, up to the top end of your income tax bracket. You'll pay taxes on the conversion (minus any portion that represents nondeductible IRA contributions), but the money will grow tax-free in the Roth after that. Converting your entire traditional IRA balance can bump you up to a higher tax bracket, but you can spread conversions over several years. Be careful about making a large conversion if you're within two years of signing up for Medicare—you'll have to pay extra for Medicare Part B if your adjusted gross income (plus tax-exempt interest income) is more than $85,000 if you're single or $170,000 if you're married filing jointly. Your last tax return on file determines your Medicare premiums, so a 2019 conversion could affect 2021 premiums.

Newly formed Oregon businesses have received a solicitation from OR Certificate Services offering a Certificate of Standing/Existence for $77.25. Many businesses do not need this certificate. Those that do may obtain one directly from the Secretary of State for $10. 

This solicitation may appear to be from a government agency, but its not. A copy of the Solicitation can be viewed here. 

If you were misled by this solicitation, you may request a refund. To obtain a refund, call OR Certificate Services at 1-855-210-6990 or 1-855-755-3357 between 9 am & 5 pm EST. 

Official correspondence from the Oregon Secretary of State Corporation Division always contains the following elements:

• An image of the Oregon State seal;
• The words, Secretary of State Corporation Division; and 
• Oregon Secretary of State phone number 503-986-2200

To view other types of schemes that spammers and scammers are using, visit the Business Alert page.  If you believe you have been a victim of a business scam, please contact the Secretary of State at Corporation.Division@Oregon.gov or 503-986-2200.

To receive a tax deduction for contributions to an Oregon College Savings Plan on your 2019 taxes, contributions will need to be made prior to December 31st, 2019. Starting January 1st, 2020 the Oregon College Savings Plan is moving to a tax credit. If you file an Oregon income tax return, contributions made to your account before the end of 2019 are deductible up to a certain limit. For 2019, the limit individual taxpayers are allowed to deduct is $2,435 or $4,865 if filing jointly. You may also carry forward a balance over the following four years for contributions made before the end of 2019. 

Recapture provisions apply. This means that if you withdrew funds for non-qualified expenses from your Oregon College Savings Plan account and you claimed a tax benefit for that year’s contribution, the state of Oregon will recapture any Oregon State income tax benefits that you had accrued on the principal portion of that withdrawal. 

Worth noting, any funds that you plan to roll over from another 529 College Savings Plan are considered “new contributions” and will count towards the limit you’re allowed to deduct in a given tax year. 

For more information, visit The Oregon College Savings Plan website.