Your popular 2019 tax return questions answered!
Preparing your clients’ tax returns is like completing a puzzle. There are a bunch of different pieces that fit together to make a complete picture, but it’s up to you to figure out how. Each puzzle has a varying degree of complication, just like your clients’ returns. Your time is money, so relying on our tax research experts to help you with your complicated puzzles is a smart financial decision.
Our team is working longer hours to help you get through tax season.
February
Monday - Wednesday, 8:00 a.m. to 6:00 p.m. CST
Thursday - Friday, 8:00 a.m. to 5:00 p.m. CST
March 2 - March 28
Monday - Wednesday, 8:00 a.m. to 6:00 p.m. CST
Thursday - Friday, 8:00 a.m. to 5:00 p.m. CST
Saturday, 9:00 a.m. to 1:00 p.m. CST
March 30 - April 15
Monday - Friday, 8:00 a.m. to 6:00 p.m. CST
Saturday, 9:00 a.m. to 1:00 p.m. CST
Here are some examples of the questions and answers our team worked on so far this tax season:
Question: My client has a child who is 22 and at least a half-time student, according to the 1098-T. The child made $20,000 last year. Can the child claim the education credit?
Answer: Yes, the child can claim education credit if the parents don’t claim the child as a dependent. However, the child is not entitled to the refundable American opportunity tax credit if the child meets certain conditions:
- The child was under age 18 at the end of 2019; age 18 at the end of 2019 and their earned income; was less than one-half of their support; or over age 18 and under age 24 at the end of 2019, a full-time student and their earned income was less than one-half of their support.
- At least one of the child’s parents was alive at the end of 2019.
- The child is not filing a joint return for 2019.
Question: My client put a new roof on their commercial building. Is this eligible for §179 deduction or bonus depreciation?
Answer: The Tax Cuts and Jobs Act expanded the definition of qualifying real property for §179 to include the cost of a roof on non-residential real property. The expense is not eligible for bonus however because the class life of the roof (39 years) is not 20 years or less.
Question: A person, age 19, is sentenced to prison for a couple years. Their income consisted of wages of a few hundred dollars. Can that person’s parents claim their child as their dependent for 2019 and during their child’s term in prison? Is prison a temporary absent? Is the child considered being supported by the government?
Answer: This is assuming the child was not a full-time student for five months in 2019, therefore we look to the rules of qualifying relative (rather than qualifying child). The regulations allow for a temporary absence in cases such as this, but a qualifying relative does not need to meet the test of living with the taxpayer for over half the year. The issue lies in the support test for a qualifying relative; parents would need to provide over 50% of his support (versus a qualifying child cannot provide over 50% of their support). Regulations explain “except as provided in paragraph (a)(3)(iii) of this section, governmental payments and subsidies for an item of support are support provided by a third party, the government” [Prop. Reg. 1.152-4(a)(3)(i)(A)]. This particular government expenditure is not listed as an exception so it would be provided by the government. Therefore, he is considered being supported by the government.
Please be advised, these answers are not to be applied to other individual tax situations. NATP’s researchers explain answers for specific tax situations that vary for each question. For accurate help with your clients’ unique returns, contact the NATP research team at 800-558-3402, ext. 2, or submit your question online.
Professional level membership includes one free question and Premium level membership includes five for free. Basic members receive a discount on the nonmember question rate.
About NATP ResearchNATP Federal Tax Researchers
Our on-site team of tax professionals answers more than 20,000 questions each year on a variety of federal tax issues affecting your clients. Several of our tax researchers are CPAs and enrolled agents with broad tax knowledge and access to the most diverse research library in the industry.
For research help, contact us at 800-558-3402, ext. 2 or submit your question on our online form.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.