Beginning in Tax Year 2020, Eligible U.S. Taxpayers May Deduct up to $300 in Charitable Contributions from Gross Income

The CARES Act of 2020 brought about a change in how the IRS defines “Adjusted Gross Income” (AGI) on your tax returns.

Starting in 2020, “the amount (not to exceed $300) of qualified charitable contributions made by an eligible individual during the taxable year” are deducted, among other things, from gross income, in determining AGI.

The above language came out of the Internal Revenue Code. Let’s attempt to decipher this into language actual humans can understand.

The Short Answer

II you do not itemize deductions, starting in 2020, you can take as much as $300 in charitable contributions you make during the year. This reduces your taxable income and you may owe less taxes as a result.

How much less in taxes depend on your tax bracket, which can vary from 0 to 37% on your federal tax return. If you are already paying no federal taxes, this won’t change your tax bill. But otherwise, if you’re in, say, the 22% bracket and you gave $300 to charity, your tax bill will be lower by about $66.

What about state taxes? It’s not clear yet if California state law will conform to this law. If it does, that could save you a few more $$ on your state tax return.

Cash Contributions Only

Only charitable contributions made in cash (or credit card) are considered for this deduction. Non-cash deductions, such as giving used household items to Goodwill, are not included.

As a reminder, cash contributions to charities less than $250 require one of the following forms of documentation by the IRS: A bank record (e.g. canceled check or bank/credit card statement); a receipt showing the date, amount and name of the charity; or a payroll record, if it was withheld from your paycheck. Cash contributions over $250 also require a written acknowledgement from the charity showing date and amount and if any goods or services (other than religious benefits) were provided. You don’t need to attach this information to your return or anything; just keep it in your files.

$300 Per Return

So how does the $300 work for married couples? Is it $300 each? Nope. The $300 applies to all taxpayers. Yet another example of the “marriage penalty.” The $300 is per return.

What if you file married filing separate? There has been no clarification on this yet. We shall see.

Can I Take the Deduction If We Itemize Deductions?

No. If you itemize deductions, take the deduction there. If you are reading this, chances are that you did not itemize deductions in 2019. Before the Tax Cuts and Jobs Act of 2017 (TCJA), about 30% of taxpayers itemized deductions. After TCJA, it is estimated that only 10% of taxpayers itemize.

So give away if you can! Local Ventura County area charities at THIS LINK.

Facts About Getting Real ID Cards in the State of California

UPDATE 3/26/20: THE REAL ID IMPLEMENTATION DEADLINE HAS BEEN DELAYED FROM 10/1/20 TO 10/1/21 BY DHS AT THE DIRECTION OF THE PRESIDENT DUE TO THE COVID-19 PANDEMIC AND EMERGENCY DECLARATION.

Now that we are well into 2019 (now 2020), it’s time for people like me, and perhaps most of you,. to start thinking about getting a Real ID card. (AS MENTIONED ABOVE, THE DEADLINE HAS BEEN PUSHED BACK A YEAR TO 10/1/21 DUE TO THE PANDEMIC).

WHAT IS REAL ID?

Beginning October 1, 2020 (NOW 2021), the federal government will require your driver’s license or ID card to be Real ID compliant if you wish to use it as identification to board a domestic flight or enter secure federal facilities that require identification. The California DMV now offers federally compliant REAL ID drivers’ licenses.

The Real ID is a requirement of the Real ID Act of 2005.

DO I HAVE TO GET A REAL ID CARD?

No, you don’t. But if you plan to board a domestic flight starting October 1, 2020, your existing California driver’s license or state-issued ID will not work with TSA if it is not Real ID compliant.

In lieu of a Real ID card, you will need to show a U.S. passport, passport card or other forms of identification noted at www.tsa.gov/travel/security-screening/identification.

HOW DO I GET A REAL ID CARD?

Plan your DMV visit by making an appointment to visit a field office. DMV offices closest to the Conejo Valley include Thousand Oaks (Avenida de los Arboles), Ventura, Simi Valley,. Oxnard and Santa Paula. San Fernando Valley DMV locations include Winnetka, Van Nuys and Granada Hills.

Prepare for your visit as follows:

1. Bring proof of your identity (original or certified copies only). It should show your date of birth, true full name (sorry, Madonna, Lady Gaga and Cher, this goes for you too). Documentation can include a current, unexpired U.S. passport or passport card, U.S. birth certificate, Permanent Resident Card or other items.

   Note that the identify document must show your current true full name; multiple name change documents are required if your name has changed multiple times. So for example, you’ll need to bring a certified marriage certificate if your current legal name is different than on your birth certificate or other identifying document.

2. Bring proof of your full Social Security number (SSN) in the form of either an original Social Security card, W-2 form, 1099 form, pay stub or other items.

3. Bring two printed documents showing proof of California residency which list your first and last name and residence listed on the ID card application. It must show a physical address, not a P. O. box. Items you can use include mortgage bill, signed rental agreement, home utility bills, employment documents, property tax bills, etc.

4. You will also need to complete an ID card application. The California DMV strongly encourages residents to complete applications online at www.dmv.ca.gov/portal/dmv/detail/forms/dl/dl44. It is available in 10 languages (sorry, no Pig Latin though). Register for and complete the form online and when you arrive for your appointment, DMV staff can access and process the form. Easy peasy.

5. Application fee is $30 for the ID card ($35 for a non-compliant driver’s license).

HOW LONG DOES IT TAKE TO GET THE REAL ID CARD?

Usually within 60 days by mail.

Learn more at REALID.dmv.ca.gov.

My experience getting a REAL ID card in August 2019.

Federal Reserve Establishes U.S. Coin Task Force to Address Low Coin Inventories

According to the Federal Reserve, business and bank closures associated with the COVID-19 pandemic have significantly disrupted the supply chain and normal circulation patterns for U.S. coins. While there is an adequate overall amount of coins in the economy, the slowed pace of circulation has reduced available inventories in some areas of the country.

The primary issue with coin is a dramatic deceleration of coin circulation through the supply chain. As of April 2020, the U.S. Treasury estimates that the total value of coin in circulation is $47.8 billion, up from $47.4 billion as of April 2019. While there is adequate coin in the economy, the slowed pace of circulation has meant that sufficient quantities of coin are not readily available where needed. With establishments like retail shops, bank branches, transit authorities and laundromats closed, the typical places where coin enters our society have slowed or even stopped the normal circulation of coin. The coin supply chain includes many participants, from the U.S. Mint who produces new coin, to the Federal Reserve who distributes coin on the U.S. Mint’s behalf, to armored carriers, banks, retailers and consumers, all of whom have a role to play in helping to resolve this issue.

The Federal Reserve is working with the U.S. Mint and others in the industry on solutions. As a first step, a temporary cap was imposed on the orders depository institutions place for coins with the Federal Reserve to ensure that the current supply is fairly distributed. In addition, a U.S. Coin Task Force was formed to identify, implement, and promote actions to address disruptions to coin circulation.

Members of the U.S. Coin Task Force include individuals from the American Bankers’ Association, Department of the Treasury, National Armored Carrier Association, Federal Reserve System and other organizations.

The task force will meet for a series of virtual working sessions in July with the goal of sharing a set of recommendations at the beginning of August. The group will focus on identifying actionable steps that supply chain participants can take to address the current coin circulation issue.

As the economy recovers and businesses reopen, more coins will flow back into retail and banking channels and eventually into the Federal Reserve, which should allow for the rebuilding of coin inventories.

Mystery Blimp in the Skies Above Newbury Park

Dennis Bronk of Newbury Park captured these shots of the “mystery blimp” floating around the skies of Newbury Park on January 27th. We posted the photos on the CVG Facebook Page at THIS LINK for feedback.

Many folks saw this mysterious, white, unmarked blimp and wondered where it was from and what it was doing. Several thought it might have something to do with the previous day’s tragic Kobe Bryant helicopter crash covering the memorial at Mamba Sports Academy. Others saw it in other places - Camarillo, Ventura, Hueneme. Someone suggested it was covering the Justin Turner Golf Tourney at Sherwood Country Club.

Then, Milt Zweig, who I know and trust, gave what I believe to be the most likely answer. He indicated it was a CNATT (Center for Naval Aviation and Technical Training) drone blimp flown out of Point Mugu. I further explored that suggestion and discovered this blimp looks quite a bit like the American Blimp MZ-3. That said, the MZ-3A was sold by the Navy in October 2017.

The mystery blimp looks a lot like this American Blimp MZ-3A picture in November 2013.

The New 2019 Form 1040-SR U.S. Tax Return for Seniors Generally Mirrors 2019 Form 1040

Here we are at the start of a new year, and with that the start of a new tax season. Doing taxes ranks up there between having a root canal and preparing for a colonoscopy in terms of things to look forward to.

But when I heard there was a new tax form for 2019 - Form 1040-SR U.S. Tax Return for Seniors - I thought, ok, that’s good news for some folks. Right?

The new Form 1040-SR is, according to the IRS, “available as an optional alternative to using Form 1040 for taxpayers who are age 65 or older.” (That leaves me out of contention.) The IRS further clarifies for 2019 that “age 65 or older” means you were born before January 2, 1955.

OK, so if Form 1040-SR is an “optional alternative” to the Form 1040, what’s different about it and why would any senior want to use a form that reminds them that they are a senior? There must be some benefit to using the form, right? Maybe you get free Geritol for completing this new form?

Well, here’s what the IRS says in the 2019 Form 1040 and 1040-SR Booklet about Form 1040-SR: “The form generally mirrors Form 1040.”

So why are we using taxpayer funds to create a new form that mirrors an existing form?

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I did a side-by-side comparison to confirm to what degree Form 1040-SR “generally mirrors” Form 1040.

(By the way, the 2019 Form 1040 looks quite a bit different than the so called “postcard” 2018 Form 1040, which in reality was a terribly designed two page form that easily could have fit onto one page, plus six separate schedules. The 2019 Form 1040 looks more like the previous 2017 Form 1040, when we had the pleasure of choosing among Form 1040, Form 1040A and Form 1040EZ the latter two of which went away in 2018.)

It is true. The two forms are nearly identical, with two minor exceptions:

1) Form 1040-SR includes a Standard Deduction Chart at the bottom of the form showing the Standard Deduction amounts. The Form 1040 tells you to go to the instructions to figure this out. Yet the bottom third of Form 1040 page one is blank. There is PLENTY of room to include the Standard Deduction Chart on the face of Form 1040 too.

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The Standard Deduction Chart on 2019 Form 1040-SR simply shows on the face of the form the larger Standard Deduction you can take if you were born before January 2, 1955 or are blind.

(And on a related note, the Standard Deduction in 2019 is $12,200 for single and $24,400 for married filing jointly taxpayers. Single taxpayers receive an additional $1,650 deduction for being 65+ and/or for blindness. Each married taxpayer receive an additional deduction of just $1,300 for 65+ and/or blindness. There’s a bit of a disparity there; perhaps another example of the marriage penalty in our tax system.)

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This is the bottom third of 2019 Form 1040. Completely blank. Wouldn’t ya think they would include that same Standard Deduction Chart on Form 1040-SR here too? Nah, that would make too much sense.

2) Font Size- 2019 Form 1040-SR uses two full pages of space, yet 2019 Form 1040 leaves the bottom third of the form blank on both pages. Is this blank space for doodling or what?

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Page one of 2019 Form 1040-SR fills the whole page and has larger font than 2019 Form 1040.

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Page one of 2019 Form 1040 uses smaller font for us younger folk with 20/20 eyesight in 2020 and leaves a 3rd of the page blank.

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Page two of 2019 Form 1040-SR fills nearly the entire page. Nothing wrong with that.

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Exact same information on page two of 2019 Form 1040 as Form 1040-SR, but scrunched up in smaller font, leaving plenty of doodling space at the bottom of the form. Makes a lot of sense, doesn’t it.

From a practical standpoint, why wouldn’t our legislators hire smart people that could step back and say, hey, maybe we don’t need a new form to confuse people when this new form adds zero value to society. Maybe we can simply increase the font of the existing form size and call it a day?

Don’t blame the IRS. Let’s dive even deeper into this matter to find out who makes these stupid decisions.

Although the IRS designed these forms, it was at the direction of the 115th Congress (2017-2018), signed into law by Donald Trump on February 9, 2018 in H.R. 1892, the “Bipartisan Budget Act of 2018.”

TITLE II--MISCELLANEOUS PROVISIONS

Sec. 41106. Form 1040SR for seniors.

FORM 1040SR FOR SENIORS.

(a) In General.--The Secretary of the Treasury (or the Secretary's delegate) shall make available a form, to be known as “Form 1040SR'', for use by individuals to file the return of tax imposed by chapter 1 of the Internal Revenue Code of 1986. Such form shall be as similar as practicable to Form 1040EZ, except that--

(1) the form shall be available only to individuals who have attained age 65 as of the close of the taxable year,

(2) the form may be used even if income for the taxable year includes--

(A) social security benefits (as defined in section 86(d) of the Internal Revenue Code of 1986),

(B) distributions from qualified retirement plans (as defined in section 4974(c) of such Code), annuities or other such deferred payment arrangements,

(C) interest and dividends, or

(D) capital gains and losses taken into account in determining adjusted net capital gain (as defined in section 1(h)(3) of such Code), and

(3) the form shall be available without regard to the amount of any item of taxable income or the total amount of taxable income for the taxable year.

(b) Effective Date.--The form required by subsection (a) shall be made available for taxable years beginning after the date of the enactment of this Act.

So where did this ineffective new law originate? Who can we blame?

The text of this new law is nearly identical to the “Simple Tax for Seniors Act of 2004” introduced to the 108th Congress by Republican Senator Larry Craig on June 3, 2004, almost exactly four years to the day before he was arrested for indecent behavior in a men’s restroom at the Minneapolis-St. Paul International Airport. The proposed new law didn’t go anywhere, while Craig pled guilty to a charge of disorderly conduct.

The bill made a comeback in 2011, when Republican House Representative John Fleming and Senator Marco Rubio introduced it to the 112th Congress as the “Seniors’ Tax Simplification Act of 2011.” It went nowhere. It was presented again in 2013 and 2015. No changes were made in the bill other than the date.

Then the Honoring Hometown Heroes Act (H.R. 1892) was introduced to the House on April 4, 2017, authorizing governors to fly U.S. flags at half-staff in the event of the death of a first responder who dies while serving in the line of duty. It passed the House on May 18th. It passed Senate on November 28th.

What does this have to do with Form 1040-SR? H.R. 1892 was amended in a massive way in February 2018 and was renamed the Bipartisan Budget Act of 2018. Division A of the law is the Honoring Hometown Heroes Act. Divisions B, C, D and E incorporate other new laws. Division D includes the new Form 1040-SR.

And as mentioned above, the Bipartisan Budget Act was signed into law on February 9, 2018, nearly 14 years after the original vaguely-worded Simple Tax for Seniors Act was introduced.

So now you know the history of Form 1040-SR. If our legislators were competent, the new Form 1040-SR would not exist. Instead, Form 1040 would have slightly larger font size and Standard Deduction details shown on the face of the form to benefit all taxpayers equally.

New U. S. Stamp Prices Take Effect January 27, 2019

The U.S. Postal Service announced last October that the following price changes will take effect on January 27, 2019:

First class letter postage increase from 50 cents to 55 cents.

Additional ounces on letters actually decreases from 21 cents to 15 cents.

The price of sending postcards remains at 35 cents.

Regular flat rate envelope increases from $6.70 to $7.35.

about.usps.com/newsroom/national-releases/2018/pr18_086.htm

100 Year Old Joyce From Newbury Park Fulfills Her Dream of Meeting Alex Trebek

"We're going to be all over social media" says Alex Trebek as he slowly walks 100 year old Joyce Pesner of Newbury Park back to the audience.

The Dream Foundation grants wishes for terminally ill adults, and Joyce's wish was to meet Alex. She has watched Jeopardy! every night before bed since the show has been on the air.

(Fellow Conejo Valley inhabitant and friend L David Irete was the lucky person who shot this video.)

More: www.jeopardy.com/jbuzz/features/dream-foundation-100-year-old-fan