Secure Act Signed by the President

December 20, 2019
The President signed the Further Consolidated Appropriations Act, 2020 on December 20, 2019. The new Act averts a government shutdown that would have begun on December 21, 2019, and includes several provisions related to retirement plan reform. The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), makes major changes for 401(k) plans and IRAs. The highlights of retirement changes for individuals include:

IRA Changes

  • Moves the start date for required minimum distributions (RMDs) to the year in which the owner turns 72, effective after 12/31/2019. 
    • Therefore, if you turned 70½ BEFORE July 1, 2019 you must start taking your RMD’s by April 1, 2020 because you turned 70½ in 2019.
    • If you turned 70½ in 2019 but AFTER July 1, 2019, you can start taking your RMD’s at age 72, or 2021 or you can postpone the distribution to April 1, 2022;
  • Ends the 70½ age limit for contributions to an IRA, therefore if you continue to have earned income after age 70½, you can still contribute to an IRA. There is no longer an age limit to make contributions to an IRA; and
  • Shortens the distribution period for non-spouse inherited IRAs to a 10-year maximum for deaths after 12/31/2019.
    • Pre-SECURE Act, a non-spouse beneficiary could withdraw funds from an inherited IRA over their life-time, thus spreading out smaller distributions and the taxation of the Inherited IRA over a longer period and potentially paying lower tax.
    • Exceptions to the new 10 rules:
      Surviving Spouses,
      A child who has not reached the age of majority (determined under State Law),
      Disabled beneficiary,
      Chronically ill individuals,
      An individual not described above who is not more than 10 years younger than the deceased.

401(k) Changes
(These changes take place at the Employer level and potentially affect you as an employee. If you are an Employer, you should discuss these other changes with your Plan Administrator)

  • Requires plan documents to be amended to offer participation to long-term, part-time employees;
  • Permits employers to potentially amend their plan documents to automatically enroll new hires into the plan and withhold 15% from the new hires pay; and
  • Permits employers to potentially amend their plan documents to adopt a $5,000 qualified birth or adoption distributions not subject to the 10% penalty.

Other Changes for Individuals

  • 529 Withdrawal Expansions;
    • Qualified higher education now includes expenses for Apprenticeship Programs including fees, books, supplies if the program is registered with the DOL
    • Up to $10,000 may be withdrawn for a single student to help repay interest and or principal for a qualified student loan;
  • Permits qualified birth or adoption distributions from IRA’s up to $5,000 exempt from the early-withdrawal penalty; and
  • Includes the following to be considered compensation for purposes of retirement plan contributions:
    • Taxable non-tuition fellowships and stipends, and
    • Nontaxable “difficulty of care payments” earned by home healthcare workers.

These provisions under the SECURE Act can have a significant impact on your tax liability and require proper planning. If you feel you need to, please call our office to discuss these changes to retirement options and how they may affect your tax situation. Your tax preparer will also discuss these changes with you upon preparation of your 2019 tax return.

Senate and House Pass Tax Reform

December 21, 2017
Well, for better or worse we finally have a tax reform bill. As I am sure most of you have heard, The Senate passed the bill, and the House passed the bill yesterday. Unfortunately, it was not until late day before yesterday that we received a complete summary of the entire bill. We received a simplified summary of the Bill late yesterday. In an attempt to inform everyone as soon as possible, we are sending this summary now and as we learn and interpret more, we will be back in touch.
View/download summary here.

IRS Gives Tax Relief to Victims of California Wildfires;
Extension Filers Have Until Jan. 31 to File

October, 2017
WASHINGTON—Victims of wildfires ravaging parts of California now have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.

This includes an additional filing extension for taxpayers with valid extensions that run out on Monday, Oct. 16.

Currently, the IRS is providing relief to seven California counties: Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba. Individuals and businesses in these localities, as well as firefighters and relief workers who live elsewhere, qualify for the extension. The agency will continue to closely monitor this disaster and may provide other relief to these and other affected localities.

The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 8, 2017. As a result, affected individuals and businesses will have until Jan. 31, 2018, to file returns and pay any taxes originally due during this period.

This includes the Jan. 16, 2018 deadline for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

A variety of business tax deadlines are also affected, including the Oct. 31 deadline for quarterly payroll and excise tax returns. Calendar-year tax-exempt organizations whose 2016 extensions run out on Nov. 15, 2017 also qualify for the extra time.

In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due after Oct. 8 and before Oct. 23, if the deposits are made by Oct. 23, 2017. Details on available relief can be found on the disaster relief page on

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes firefighters and workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year) or the return for the prior year (2016). See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these wildfires and is based on local damage assessments by FEMA. For information on disaster recovery, visit

About the Equifax Breach

September, 2017
As we are sure most of you know by now, Equifax revealed that computer hackers have potentially stolen from Equifax personally identifying information on an estimated 143 million people. Such information may include names, Social Security number, addresses, birthdates, credit information, and driver’s license. Equifax is one of the three main credit bureaus and more likely than not have your personal information.

There is a way to check if your information was compromised but it is said to be unreliable. It is better to assume your information was compromised and to take steps to protect yourself. The link to check if you information is potentially compromised is: Click on the "Potential Impact" tab and enter your last name and the last six digits of your Social Security number on the screen. The site will tell you if you’ve been affected by this breach.

Whether or not your information was exposed, U.S. consumers can get a year of free credit monitoring and other services. The site will give you a date when you can come back to enroll. Write down the date and come back to the site and click "Enroll" on that date. You have until November 21, 2017 to enroll.

As a result of the Anthem Blue Cross data breach we did extensive research on how to protect oneself in the future. The best and surest way is to place a credit freeze on your records with all three credit reporting agencies (Equifax, Experian, and TransUnion). You will need to contact each agency separately (information below).

To Freeze Accounts:



When you place a credit freeze (for a nominal fee) with each agency, the freeze blocks anyone from accessing your credit reports without your permission—including you. Each bureau will provide a unique personal identification number (PIN) that you can use to release your credit file in the event that you need to apply for new lines of credit sometime in the future. Keep this number in a safe, retrievable place, as without it, you can not release your credit.

If you need to refinance, purchase a home, car or need access to your credit, find out which credit agency the lender will be using. You can then contact that credit agency and using your PIN you can unfreeze your credit (for a $10 fee) long enough to accomplish your task and then refreeze your credit.

The agency should not release your credit information for any new company request. For your existing company relationships, updates should be available. Theoretically, if someone tries to obtain credit in your name, the company will request your credit information. Since you have it frozen, no report will be forthcoming so no new account would be granted.

You should also obtain a copy of your credit report from all three agencies. You can receive it once a year from each agency. If you rotate them every four months, you will be able to recognize if a new credit card is issued unbeknownst to you.

Department store cards are also a problem. If you have department store cards, an ID thief, using only your social security number can charge on your existing accounts at the department store. Department store cashiers are supposed to verify your ID with a driver’s license but they are not following through with department store policy.

You should monitor your monthly statements for unauthorized bank or credit card activity. Since the Equifax breach potentially also disclosed credit card numbers, it is best to call and have your existing credit card numbers changed.

Also, ID thieves like to intercept offers of new credit sent via postal mail. You can opt out of receiving them for five years by calling 1-888-567-8688 or visiting