Krystal Davis CPA LLC

In preparation for the February Special Legislative Session, a draft bill has been introduced (LC 22) which would create a statewide property tax! This appears to be a constitutional amendment to Oregon and is in addition the the current property tax structure and is an additional state tax!

The summary reads, “LC 22 proposes an amendment to Article IX, Finance, of the Oregon Constitution to require the Legislative Assembly to impose by law a state property tax to fund public safety and define taxable property, establish certain processes, and create an administrative entity. It allows the Legislative Assembly to set rates and certain exemptions. It exempts the property tax from Article XI, section 11, of the Oregon Constitution (Ballot Measure 50) (1997), or Article XI, section 11b, of the Oregon Constitution (Ballot Measure 5) (1990). It refers the proposed amendment to the voters at the 2024 General Election.”

Once these Constitutional limits are compromised, it will be one more way to tax you by your property taxes.

olis.oregonlegislature.gov

Business owners beware - Don’t be misled into wasting your hard-earned money! There are lots of solicitations designed to be mistaken for official correspondence from the State of Oregon.

These solicitations are often sent by for-profit, out-of-state companies that offer to file your Annual Report for an extra $95 “processing fee,” which is not required under Oregon law.

The false mailings are typically postcards.

https://studentaid.gov/debt-relief/application

It was initially expected that the student loan forgiveness would be handled automatically by the Department of Education. However, the guidance has changed and you must now apply for that forgiveness. The link to start the process is in this post.

You will be required to affirm that ONE of the following is true for 2020 (Jan. 1–Dec. 31, 2020) or 2021 (Jan. 1–Dec. 31, 2021):
You we're not required to file a tax return in 2020 or 2021, you are a single tax-filer AND made less than $125,000
or you were married, filed separately, AND made less than $125,000 Or
married, filed jointly, AND made less than $250,000 Or
filed as a head of household AND made less than $250,000.
Your AGI can be found on line 11 of the IRS Form 1040.

Federal Student Aid

Effective on or after July 1, 2022, the standard mileage rate
for business expenses is 62.5 cents per mile, from the 58.5 between Jan. 1, 2022, and June 30, 2022.
The rate for transportation for, and essential to, medical care under
also goes up to 22 cents per mile from 18 cents in the first
half of the year.

Today President Biden announced student loan forgiveness of $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients.

Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). It did not state a phase out for income but it is expected that $75,000 might be the starting point for a phase out if one is set.

No dates for eligibility, or methods of calculation of income was provided. Presumably that information will be explained in the coming weeks.

The pause on federal student loan repayment will be extended one final time through December 31, 2022.

FACT SHEET: President Biden Announces Student Loan Relief for Borrowers Who Need It Most - The White House A three-part plan delivers on President Biden’s promise to cancel $10,000 of student debt for low- to middle-income borrowers President Biden believes

If you received an Economic Impact Payment this year should keep Notice 1444, 'Your Economic Impact Payment', with your tax records. This notice provides information about the amount of your payment, how the payment was made and how to report any payment that wasn’t received.

The Internal Revenue Service says taxpayers for whom the IRS does not have direct deposit information should go to the Get My Payment website and enter that information by noon EST Wednesday 5/13 so they receive their stimulus payment electronically. After that time, eligible taxpayers will have to wait for a paper check. https://www.irs.gov/coronavirus/get-my-payment

Get My Payment | Internal Revenue Service Use Get My Payment to get information about your payment status and payment type.

Looking for the status on your economic rebate from the IRS?

Here is the link
https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments

Coronavirus Tax Relief and Economic Impact Payments | Internal Revenue Service We are offering help for taxpayers, businesses, tax-exempt organizations and others – including health plans – affected by coronavirus (COVID-19).

Social Security Recipients Will Automatically Receive Economic Impact Payments

The U.S. Department of the Treasury and the Internal Revenue Service announced that

“Social Security recipients who are not typically required to file a tax return need to take no action, and will receive their payment directly to their bank account,” said Secretary Steven T. Mnuchin.

The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate $1,200 Economic Impact Payments to Social Security recipients who did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits.

H. R. 748 2020 CARES act recovery rebates in a nutshell

Advanced amount will be $1,200 for US citizen or qualified US Resident single filers, $2,400 for joint filers and $500 for each child under age 17.

The rebate is reduced by 5% income over $75,000 single, $112,000 head of household and $150,000 joint filers with full phase out at $99,000 single, $199,000 joint. If you did not file a return because your only income was social security payments, the IRS will use form SSA-1099 to determine eligibility.

Income is currently determined by 2019 return if already filed and 2018 if not filed. If you do not qualify when your 2019 return is filed you will be required to repay the credit with 2020 tax return.

Payments will be delivered electronically to the bank account on your most recent 2018 or 2019 return if you authorized direct deposit. Otherwise the payment will be mailed to the last address on IRS records.

Notices will be mailed to the last known address within 15 days after advance payment has been made and will indicate payment method, amount, and phone number to call if you did not receive it.

Tax filing and payment relief summary

Federal tax returns and tax due for 2019 on a return due April 15 and first quarter federal estimated tax payment due April 15 are automatically extended to July 15.

Estimated tax due June 15 is unchanged and still due June 15.

Oregon tax returns and tax due for 2019 on a return due April 15 are automatically extended to July 15.

However first quarter Oregon estimated tax payment due April 15 are still due April 15. Estimated tax due June 15 is unchanged and still due June 15.

Trimet SE tax is following Oregon return due April 15 are automatically extended to July 15.

City of Portland is following Oregon so returns and payment on a return due April 15 is automatically extended to July 15.

However first quarter Oregon estimated tax payment due April 15 are still due April 15. Estimated tax due June 15 is unchanged and still due June 15.

Contribution to your IRA for 2019 is also extended to July 15, 2020.

The 10% distribution penalty on early withdrawals from a retirement plan during 2019 has also been extended to July 15, 2020.

Tax filing and payment relief summary

Federal tax returns and tax due for 2019 on a return due April 15 and first quarter federal estimated tax payment due April 15 are automatically extended to July 15.

Estimated tax due June 15 is unchanged and still due June 15.

Oregon tax returns and tax due for 2019 on a return due April 15 are automatically extended to July 15.

However first quarter Oregon estimated tax payment due April 15 are still due April 15. Estimated tax due June 15 is unchanged and still due June 15.

City of Portland is following Oregon so returns and payment on a return due April 15 is automatically extended to July 15.

However first quarter Oregon estimated tax payment due April 15 are still due April 15. Estimated tax due June 15 is unchanged and still due June 15.

Contribution to your IRA for 2019 is also extended to July 15, 2020.

The 10% distribution penalty on early withdrawals from a retirement plan during 2019 has also been extended to July 15, 2020.

Treasury Secretary Steven Mnuchin announced today that the Trump administration will move the tax filing deadline from April 15 to July 15.

"At ’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties," Mnuchin wrote on Twitter.

Oregon previously indicated they will follow the federal due date if changed.

Previously, Treasury Secretary Steven Mnuchin extended the payment due date without extending the filing deadline. That issued guidance allowed all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest. The guidance also allowed corporate taxpayers a similar deferment of up to $10 million of federal income tax payments that would be due on April 15, 2020, until July 15, 2020, without penalties or interest.

If you are not happy paying more tax in Oregon you better contact your state legislator as they seem to think their sole job is to pass new taxes! These are the prosposed new taxes in addition to all the new fees and taxes they passed last year. Its getting too expensive to live in Oregon!


The Oregon Legislature introduces six new tax plans that hit you everywhere. These are the tax increase bills introduced in the 2020 February Oregon Legislature.

1. A 20% Hotel tax increase (HB4047): Raises the state lodging tax by 20%.

2. Car sales tax increase (HB4151): Raises the new motor vehicle sales tax by an unknown amount (a blank percentage) and imposes a one percent tax on electric bills, to pay for increased subsidies of Teslas and other electric cars and more recharging stations for them.

3. Homes sales Tax (HJR203): Gov. Kate Brown’s proposal to impose a new state real estate sales tax (“transfer charge”) on homes sold for more than $500,000, and repeal state preemption of certain local real estate transfer taxes that had been prohibited by voters under Measure 79 in 2012. The taxes would subsidize “affordable housing” as defined by the state.

4. Construction Tax (HB4084): Imposes a new tax (“system development charge”) on construction of apartments or adding units to existing apartments located in rural areas, to provide subsidies for state-defined “affordable housing.” (ie create more committees)

5. Mattress Bed Tax (SB1564): Allows the Department of Environmental Quality to impose a sales tax (“assessment”) on new mattresses to fund a mandatory mattress
“stewardship,” i.e. recycling, program. As an “assessment” rather than a “tax,” the bill may not require a 3/5 majority. Tax bills must start in the House and receive 3/5 majority votes in both the House and Senate.

6. Carbon Tax (72 gas tax and 11% utility rate increase) Legislative Draft LC 19: Sets emission targets and then forces any business that exceeds those emission targets to pay credits into a state slush fund – expected to raise $700 million. Taxing carbon will increase the cost of gasoline and heating utilities. Gasoline prices are expected to rise as much as 72 cents. Heating bills, powered by natural gas, are expected to rise 13% for homes and 53% for businesses. (None of this tax is directed to do anything but increase state coffers and create new governmental "oversite" agencies. )

The Internal Revenue Service announced that the nation’s tax season will start for individual tax return filers on Monday, Jan. 27, 2020, when the tax agency will begin accepting and processing 2019 tax year returns. While preparing may be done through various software companies prior to that date, IRS won’t process until Jan27

US Dept of Labor issues final overtime rules - The final rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from minimum wage and overtime pay requirements.

It Raises the "standard salary level" from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker); Thus, overtime must be paid if salary is below this level.

The final rule will be effective on January 1, 2020

Equifax Data Breach Settlement: How to Claim Your Benefits (or verify if your information was breached)

https://www.consumer.ftc.gov/blog/2019/07/equifax-data-breach-settlement-how-claim-your-benefits

Equifax Data Breach Settlement: How to Claim Your Benefits Earlier this week, we told you that roughly half the people in the country can get benefits under a settlement that the FTC and others reached with Equifax.

Another tax increase for Oregon! Kate Brown signed and the Senate Democrats passed House Bill 3427 in a party-line vote on Monday, after Brown cut a deal with the chamber’s Republicans to bring them back from a nearly weeklong walkout. Democrats, who needed at least two Republicans present to achieve the quorum necessary to vote on the bill. The new 0.57 percent tax is set to take effect in 2020 and EXPECTED TO RAISE MORE THAN $1 billion a year. It will be calculated on businesses’ sales in Oregon above $1 million annually. Yes you business folks out there that is regardless of whether your net income is POSITIVE or NEGATIVE. Yep a sales tax in disguise. And you think it wont affect you, think again. Somebody has to pay the tax and business will increase prices to cover the costs. In the end everyone who buys anything in Oregon is now subject to yet another HIDDEN TAX!

Glad someone with clout is questioning the IRS move from a 2 page 1040 to an 8 pages of 1/2 page forms!

National Taxpayer Advocate Nina E. Olson released her 2018 Annual Report to Congress. The report included, among other things, concern with the new IRS Form 1040.

"While many taxpayers will use software to complete the return, the new schedules will force some taxpayers to cross-reference and transfer data such as credits, deductions, and income, increasing the potential for errors to occur since the tax information is dispersed over many pages and needs to be tracked down and reported on different schedules and forms,"

IRS announces 2019 Mileage rates
58 cents per
mile for all miles of business use
14 cents per mile for services to a charitable organization 20 cents per mile for use of an automobile for medical care

2018 interest paid on home equity loans and lines of credit, is generally no longer deductible.

However, home equity or line of credit loans used ONLY to buy, build or substantially improve the same home THAT SECURES the loan.

For example, interest on a home equity loan used to build an addition to an existing home is typically deductible, while interest on the same loan used to pay off student loans or credit card debts, is not.

Note that the loan must be secured by the taxpayer’s main home or second home (known as a qualified residence), and may not exceed the cost of the home and its related improvements up to a total of $750k in loans.

IRS urges taxpayers to prepare for natural disasters | Internal Revenue Service

It’s always a good idea to think about what you can do to be prepared should a natural disaster strike . Here are a few helpful tips from the IRS to keep in mind.

irs.gov IR-2018-183, Sept. 10, 2018 — Because a natural disaster can strike any time, the IRS is reminding individuals and businesses to take time now and create or update their emergency preparedness plan.

So the IRS released a draft post card size (5x8) 1040 for 2018 and made big announcements about how much easier the returns would be last week. Today added 6 new schedules to cover all the items that used to be on the old 1040. so I ask the powers that be.. how does taking a 2 page form to to 8 pages make filing a return eaiser, faster, or reduce paper?

Oregon Measure 101, Healthcare Insurance Premiums Tax for Medicaid Referendum (January 2018) is straight up a tax on small business and individuals that specifically excluded large companies so that they would not protest it. Please Vote NO. Health care costs are out of control and giving Oregon more money in a sales tax on health insurance is NOT a solution!

2018 tax planning tip: medical expense limit is lowered to 7.5% AGI phase out limit and goes back to 10% in 2019. So if you have medical, dental, hearing aid purchases to make 2018 is the year to do it. NOTE: must be paid by 12/31 so don’t finance - pay with a credit card to keep the deduction. (Your total deductions still need to exceed the new standard deduction of $12k, $18k,or $24k to get deduction.)

Thinking about renting out your space?
Plan for paying additional taxes if you are renting your space as Short-term rentals, or vacation rentals. Renting space using web sites such as HomeAway, VRBO and Airbnb may create unexpected tax issues. Lodging taxes can be a significant liability. City of Portland requires reporting on a monthly or quarterly basis depending on your rental and should be collected from the person who is paying the rental fee but if you dont ask for it, you will have to pay it from your own pocket. Oregon state also has a lodging tax. Airbnb takes care of that as required by state law but other rental websites may not. Short-term rentals that generate $20,000 to $30,000 per year in rent, will incur tax amounting to $2,000 to $5,000. Before you rent out your space make sure to do the following: Determine the tax rate for your location; bill the tenant for the tax; register with city, county and state agencies;File and remit when due.

The 2017 standard mileage rate has decreased to 53.5 cents per mile for business uses and 17 cents per mile for medical and moving uses. It remains at 14 cents per mile for charitable.

Yep, almost THAT time. The IRS has announced that it will begin accepting and processing electronic and paper returns on Monday, January 23, 2017. The deadline to submit 2016 tax returns will be Tuesday, April 18, 2017. The traditional April 15, 2017 deadline falls on a Saturday and because Washington, D.C., will celebrate Emancipation Day the following Monday, Friday, April 17, 2017, the deadline has been pushed to Tuesday, April 18, 2017.

What's New

If you own a business, and need to fill out an I-9 form for your employees, you'll need to use the updated version of it starting January 21st 2017

uscis.gov What's New What's New 11/01/16 USCIS extends TPS Designation for NepalThe Secretary of Homeland Security has extended Temporary Protected Status (TPS) for eligible nationals of Nepal (and those without nationality who last habitually resided in Nepal) for an additional 18 months, from Dec. 25, 2016,...

The Internal Revenue Service announced plans to stop notifying taxpayers by telephone when they are subject to an in-person field examination, in an effort to avoid confusion with phone scammers. Instead, all such notifications will come by mail.