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Here are the new tax updates for 2020 you need to know before filing your taxes

What you need to know before filing your taxes
Posted: 5:25 PM, Feb 10, 2020
Updated: 2020-02-10 17:47:07-05
IRS shrinks the 1040 tax form

PARMA, Ohio — The clock is ticking toward April 15, the deadline to file taxes. This year, like with many tax seasons, there are changes.

At the end of December, Congress passed two pieces of tax legislation that were signed into law. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 extends more than 30 tax code provisions through 2020. The Setting Every Community Up for Retirement Enhancement Act loosens some rules with retirement plans.

“You never know what the season is going to bring,” said John Handline, who is among the first to get his taxes done at Simic CPA Company. “I wanted to get in and find out what the future holds for me, do I owe, or do I get money back?” added Handline.

The new tax laws make private mortgage insurance deductible again. Medical deductions will stay at 7.5% of adjusted gross income. Those with qualifying college expenses can deduct up to $4,000, depending on income.

There are also retirement plan changes. The new age for the minimum distributions from certain retirement accounts is 72, which means retirees can put off paying taxes on that money a little longer. Something new: penalty free distributions from certain retirement plans and IRAs for births and adoptions. Employers must now offer retirement plans to part-time workers.

“They do need to offer 401K participations to part time employees. In the past, they could exclude part time employees,” said Michael Simic CPA with Simic CPA Company.

Another extension: the non-business energy property credit extends from tax year 2018 through 2020. It gives tax breaks for purchases of energy efficient improvements for your home.

It will pay to file your taxes on time this year. Simic said the IRS is raising their late filing fee from $210 to $435.