February 20, 2020

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Here are your Articles for February 20, 2020.

New California Privacy Law
Credit to: Michiko Pistilli

In June 2018, the California legislature passed the California Consumer Privacy Act, CCPA. Any company that conducts business in California will have to obey new rules for how to treat California residents’ data. Additional amendments were signed into law in October 2019. The CCPA became effective on January 1, 2020

All companies that serve California residents and have at least $25 million in annual revenue must comply with the law. In addition, companies of any size that have personal data on at least 50,000 people or that collect more than half of their revenues from the sale of personal data, also fall under the law. Companies don’t have to be based in California or have a physical presence there to fall under the law. They don’t even have to be based in the United States.


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When Is The Best Time To Claim Social Security Benefits?
There are reasons to claim Social Security at 62, but there are also reasons to wait until you are older. Claiming benefits too early could result in receiving a significantly lower amount. In other cases, you may be creating tax headaches if you receive Social Security and are still working.

When Can You Claim Social Security Benefits?

For the average American, choosing which age to start receiving Social Security will be the biggest retirement planning question. Eligibility for Social Security begins as early as the age of 62, which I think many of you know. What you probably aren’t as clear about is the fact that taking Social Security early, at age 62, will result in a monthly Social Security benefit that is a whopping 30 percent lower than if you waited until your full retirement age (currently 66 ½ for those turning 62 today).


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IRS Intensifies Hunt For Crypto Tax Cheats
The IRS is taking steps to build cases against taxpayers who fail to report cryptocurrency. Despite more awareness of tax rules today, the IRS appears to believe that millions of transactions may be unreported. Taxpayers may think they will not be caught, but the risks are growing, and the best way to avoid penalties is to disclose and report as accurately as you can. Taxpayers may think that the IRS may penalize them, but might assume that they do not need to worry about criminal exposure. Yet violators can face large penalties or even criminal investigation. Anyone convicted of tax evasion can face up to 5 years in prison and fines as high as $250,000.

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The business meal expense deduction after the TCJA
Uncertainty continues regarding whether food-and-beverage expenses incurred in association with a taxpayer’s trade or business are “entertainment” and therefore not deductible following the passage of the law known as the Tax Cuts and Jobs Act (TCJA).1 Although the definition of entertainment is not provided in the statute, Treasury and the IRS have consistently viewed and treated food-and-beverage expenses as entertainment, and the courts have consistently applied that interpretation of the statute in their decisions.

In October 2018, the IRS issued Notice 2018-76 to announce its intent to publish proposed regulations under the amended statute and provide interim guidance on the deductibility of business meal expenses under Sec. 274, as amended by the TCJA. Taxpayers are still waiting for Treasury to issue proposed regulations. Without them, taxpayers continue to question whether business meal expenses are deductible and call for Treasury regulations clarifying the effect of the TCJA on the business meal expense deduction. Taxpayers should continue to rely on Notice 2018-76 as substantial authority for their business meal expense deductions until proposed regulations are issued. In the absence of more definitive guidance, the Treasury notice is substantial authority under Sec. 6662.


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Social Security Impersonation Scam Rises To Top Way Fraudsters Try To Victimize Seniors
The Social Security impersonation scam has become the top way fraudsters try to victimize the elderly, Senate Aging Committee Chair Susan Collins revealed today.

“The emotional and psychological tolls for those who have lost hard-earned life savings are beyond measure, said the Maine Republican who noted the losses to seniors were measured at $38 million last year.

The scam of the scam begins with an unsolicited robocall with a spoofed caller ID giving a false feeling of confidence to the intended victim by displaying the Social Security Administration as its source, the Senator explained.


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Avoid the rush: Track tax refunds using the `Where’s My Refund?’ tool at IRS.gov
WASHINGTON — Offering time-saving alternatives to a telephone call, the Internal Revenue Service reminds taxpayers they can get fast answers to their refund questions by using the “Where’s My Refund?” tool available on IRS.gov and through the IRS2Go app.

The IRS issues nine out of 10 refunds in less than 21 days, and the fastest way to get a refund is to file electronically and choose direct deposit. The time around Presidents Day is a peak period for telephone calls to the IRS, resulting in longer than normal hold times for callers.


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Has the TCJA Lowered Your Taxes?
The Tax Cuts and Jobs Act (TCJA) was intended to lower taxes and, in turn, stimulate the economy. Two years later, people are asking whether the TCJA has met these goals. One recent study shows that 65% of individuals paid less taxes in 2018 (the first year the TCJA took effect) than in 2017. But only 40% of Americans believe they got a tax cut. This article explains this perception gap and provides examples of tax reform’s winners and losers.

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Phantom Stock Could Help Grow Your Business for the Long Term
It can be a winning strategy for you and your business to recognize and encourage key managers who think like owners. If you can get them pulling even harder in the same direction as you are, your company’s value could grow exponentially over the long term. But what kind of incentive does it take to get that level of buy-in from employees? You could give them actual equity in the form of corporate stock, but doing so could bring more headaches than it’s worth. That’s where a “phantom” stock plan comes in. Here’s how they work.

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The Cost of Procrastination
You may have shared this common experience: You’re driving along when a police cruiser pulls up behind you with its lights flashing. You pull over, the officer gets out, and your heart drops. “Are you aware the registration on your car has expired?” the officer asks. Read on to find out how the cost of procrastination can also affect your retirement.

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Classification of Workers: Could Section 530 Come to the Rescue?
Businesses and the IRS often disagree about the classification of some workers. Should they be classified as employees or independent contractors? If the IRS determines that workers have been misclassified, a business can suffer adverse tax consequences. However, there might be relief with “Section 530.” This article explains.

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