107 Watson Street, Ripon, WI 54971 • P – 920.748.3118 • F – 920.748.2980 • Mon. - Fri. 8 - 5* • Sat., 8 - 2* Jillian@DDAssociates-Ripon.com • Vicki@DDAssociates-Ripon.com • DDAssociates-Ripon.com

�e Professionals for ALL your Tax & Accounting Needs

Tax Professionalsfor 47 Years!

Vicki - Owner/Tax Prep ConsultantRebecca - Tax Prep Consultant/Translator

Patrick - Director, Maintenance

Jillian - Tax Prep Consultant, ManagerJennifer - Administrative Assistant

Rosa - Administrative Assistant

*Prior to mid-January our weekday hours are limited. Saturdays starting January 18.*Prior to mid-January our weekday hours are limited. Saturdays starting January 18.

Dear Client,

The tax laws continue to provide opportunities for the wise and traps for the unwary. Often, tax savings can be achieved by taking action before the year-end. The information and strategies herein may or may not be appropriate for your situation. Remember to consult with us before implementing them.

I am pleased to announce that I have passed all required testing, and have applied for my Enrolled Agent (EA) status. My daughters Jillian and Rebecca have completed two of the three exams and are well on their way to achieving their goal. Being enrolled to practice before the IRS will allow us to serve you better.

Happy Holidays,

~ Vicki Scharschmidt

NEW TAX LAWOn July 1, 2019, President Trump signed into law the Taxpayer First Act of 2019. The Act changes the management and oversight of the IRS with the aim of improving customer service and the process for assisting taxpayers with appeals. One key provision includes:

Notification of suspected identity theft �������������The Act requires the IRS to notify a taxpayer if it determines there has been any suspected unauthorized use of a taxpayer’s identity, or that of the taxpayer’s dependents, if an investigation has been initiated and its status, whether any action has been taken (such as a referral for prosecution). Furthermore, when an individual is charged with a crime, IRS must notify the victim as soon as possible, giving victims the ability to pursue civil action against the perpetrators.

Requirements for identity protection ���������������An Identity Protection Personal Identification Number (IP PIN) is a 6-digit number assigned to eligible taxpayers that allows their tax returns/refunds to be processed without delay and helps prevent

the misuse of their Social Security Numbers (SSNs) on fraudulent Federal income tax returns.

TCJA TAX LAWAlthough the Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017, some of the tax provisions did not go into effect until 2019.

Medical Expenses ��������A deduction is allowed for the expenses paid during the tax year for the medical care of the taxpayer, the taxpayer’s spouse, and the taxpayer’s dependents to the extent the expenses exceed a threshold amount. To be deductible, the expenses may not be reimbursed by insurance or paid from a health savings account (HSA).For tax years ending after December 31, 2018, medical expenses will be reduced by 10% of adjusted gross income before they can be deducted.

Repeal of the Individual Mandate ���������������For months beginning after December 31, 2018, the amount of the individual shared responsibility payment is reduced to zero. No penalty for not having essential healthcare coverage.

Alimony ����������������Under the TCJA, for any divorce or separation agreement executed after December 31, 2018, or executed before that date but modified after it (if the modification expressly provides that the new amendments apply), alimony and separate maintenance payments are not deductible by the payor spouse and are not included in the income of the

payee spouse.Pre-2019 arrangements are still taxable and deductible unless modified after December 31, 2018.

Additional information ����

2019 Mileage Rate: Business ������������ $.58Medical or Moving ��� $.20Charitable ���������� $.14

Note �������������������Except for active military members, the TCJA suspended the deduction for un-reimbursed employee business expenses for tax years 2018-2025.

Estimated Tax Payments ���Taxpayers generally must make estimated tax payments if they expect to owe $1,000 or more when they file their 2019 tax return.

Social Security Wage Base for 2020 ���������������

The Social Security Administration recently announced that the maximum earnings subject to the Social Security component of the FICA tax will increase from $132,900 to $137,700 for 2020.

2019 TAX INFORMATION NEWSLETTER

THINKING OFRELOCATING IN RETIREMENT?

Go to Kiplinger.com/letterlinks/2019map to view a tool to tell you how each state taxes retirees.

Estates and trusts ���������Estate tax rate=40%Lifetime estate & gift exemption = $11,400,000.$22,800,000. for couples.Annual gift exclusion=$15,000. per person per year without reporting or paying tax.

BUSINESSINFORMATION

Write off asset purchases 100% using 179 expensing or bonus depreciation. Expensing limit is purchases up to $1,020,000. Phase out once total yearly purchases hit $2,550,000. Qualified business income (QBI) is available to self-employed, LLC owners and S-corps. They can deduct 20% of QBI from income; subject to total income limits.

Basic Medicare Premium 2019 2020 $134.00 $144.60Higher premiums apply to higher income people.

ODDS & ENDS

Health Insurance ����Savings Accounts (HSAs) are a good option for many. Ask your insurance agent for details. (People on Medicare don’t qualify).

Review your Will every 3 years ���������

Review your beneficiaries on all accounts to avoid unintended consequences. Be sure to designate beneficiaries on all funds.

Beware when purchasing property ����������������Be sure it is free of IRS tax liens. The IRS can collect someone else’s taxes from you if not paid by seller before the sale.

ESTIMATE PAYMENTS �����Please be sure to keep track of all estimate payment amounts and dates paid. We don’t know if you paid differently than the arrangements we set up for you.

YEAR-ENDPLANNING

1. Individuals at least 70½ years of age have the ability to make a direct transfer from an IRA to a charitable organization and exclude from gross income (up to $100,000 per year). This is called a qualified charitable distribution (QCD).Using your IRA distributions for charitable giving could save you more than taking a charitable deduction on a normal gift. That’s because these IRA distributions for charitable giving won’t be included in income at all,

lowering your adjusted gross income (AGI). You’ll see the difference in many AGI-based computations. Even better, the distribution to the charitable organization will still count toward the satisfaction of your minimum required distribution (RMD) for the year.2. Postpone income until 2020 and accelerate deductions into 2019 to lower your 2019 tax bill.3. Understanding the tax consequences associated with buying and selling mutual fund shares can also have an impact on your tax situation.4. Time your purchases and sales. If you’re planning to invest in a mutual fund, there are some important tax consequences that you should take into account in timing the investment. For instance, an investment shortly before payment of a dividend is something you should generally try to avoid. Your receipt of the dividend (even if reinvested in additional shares) will be treated as income and increase your tax liability. If you’re planning a sale of any of your mutual fund shares near year-end, you should weigh the tax and the non-tax consequences of a sale in the current year versus a sale in the next year.6. Pay your January 2020 house payment in December 2019 and claim interest in 2019.7. Donate appreciable property to non-profits, like stock. They sell stock, you get the value of selling price as deduction. 8. Pay medical bills with a credit card before December 31 to claim the full deduction in 2019.

RETIREMENT PLAN CONTRIBUTIONS 2019 2020401k, 403B, 457 Max contr. $19,000 $19,500Catchup Cont. (Over 50) $6,000 $6,500Simple Plan $13,000 $13,500Defined Benefit $56,000 $57,000IRA & Rth IRA $6, 000 $6,000Over 50 $1,000 $1,000

Filing Requirements:If you are being claimed - you must file if you have gross income of $1050 or more and it includes $351 of non-wage income OR you have total income of $10,580 if single. Non-residents must file if $2,000 of income from WI.

Individual income tax rates have dropped for 2019. This is based on increased sales tax revenue.Don’t forget you can donate to several non-profits through your WI return, including: Endangered Resources, Cancer, Veterans, MS, Military Family Relief, Second Harvest/Feed America, Red Cross Wisconsin, Speical Olympics Wisconsin

Homestead Disability CreditMust meet one of the following qualifications:• Must be 62 or older• Must be disabled• Must have earned income

E-filing is best•Faster refunds •Direct Deposits •Accuaracy • Receipt proving you filed • Reduced cost to WI • Secure transfer of personal information

Tuition expense 2019=$6974 maximum per student.

Private school tuition is also deductible on Sch. PS

Wisconsin does not allow the federal bonus depreciation.

Wisconsin computes depreciation based on January 1, 2014 IRS rules.

WI does not allow IRS QBI deduction.

Government correspondence must be answered on a timely basis.

Don’t ever pay a bill without showing it to us first. See us right away when you receive it please.

• Marriage/Divorce• Death/Birth• Receive a government notice

• Business or property purchase/sale• College - 2 years before child goes

• Moving• Inheritance• ANYTIME you have questions

CONTACT US IF:

WISCONSIN NEWS:

CHECK YOUR REFUND:

VISIT:Revenue.WI.gov

Click on “Where’s My Refund?”

OR:

IRS.govClick on “Get your refund status”

For help with back taxes, visit

TaxReliefCenter.orgor call (844) 335-3689