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Your Current Tax News Briefs

Here are some changes made by TCJA. IRS also made a few revisions to help protect taxpayers.

SALT Limit

State and local tax (SALT) deductions are now limited to $5,000 for a married person filing a separate return and $10,000 for all other filers. This limit applies to the 2018 to 2025 tax periods. Click to learn which taxpayers are impacted by the SALT limit.

Special Tax Breaks for U.S. Armed Forces

Key tax benefits are available to members of the military including combat pay, foreign earned income exclusion, filing deadline postponement, automatic extensions and earned income tax credit; just to start. Dependent care assistance programs available for military personnel, are also excludable and not included in the military member’s income. Click to get more benefits.

EIN Application Change

To provide greater security and improve transparency, IRS now requires an ITIN or SSN from individuals named as “responsible party” on Form S-4, Application for Employer Identification Number. This revision is effective May 13, 2019. Only government entities are exempt from the responsible party requirement, to include military and state national guards. Click to get the entire news release.

Penalty Relief Threshold Lowered to 80 Percent

IRS expands penalty waiver for taxpayers whose withholding and estimated tax payments fell short in 2018. The usual threshold is 90 percent to avoid a penalty. An 85 percent threshold was announced Jan 16. “Taxpayers who have already filed for tax year 2018 but qualify for this expanded relief may claim a refund by filing Form 843, Claim for Refund and Request for Abatement and include the statement “80% Waiver of estimated tax penalty” on Line 7. This form cannot be filed electronically.” Click to learn more.

Bad Weather Ahead Signpost Shows Dangerous Prediction Stock PhotoDisaster Relief

A taxpayer affected by disaster could be any individual whose principal residence is located in a disaster area; the spouse of an affected taxpayer; or any business or sole priorietor whose principal place of business is located in a disaster area. Also included is any individual, business or sole proprietor not located in a covered disaster area, but whose records necessary to meet an IRS deadline are located in the disaster area.

There are four (4) types of disaster relief:

• Administrative relief is the granting of additional time to file tax returns, pay taxes and perform other time sensitive tasks. You may also be able to get late filing and payment penalties waived or abated.

• Tax relief is claiming casualty losses on your tax return.

• For Safe harbor provisions see your tax professional.

• Election to claim disaster losses on a prior year tax return.

Taxpayers may elect to deduct a casualty loss that occurred in the current tax year on their preceding year tax return if the casualty loss occurred in a federally declared disaster area determined to warrant federal assistance.

The election to claim disaster losses on a preceding year tax return can be made up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file.) Effective for tax returns filed after October 13, 2016. Click to learn more about disaster relief.

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By C Fitts Tax Solutions, LLC Posted in Tax Talk
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!Juicy Tax News!

Those taxpayers who usually file early in the year and have all of the needed documentation, there is no need to wait to file. You should file when you’re ready to submit a complete and accurate tax return.

The U.S. tax system is pay-as-you-go. Taxpayers are required, by law, to pay most of their tax obligation during the year rather than at the end of the year. This can be done by either having tax withheld from paychecks or pension payments, or by making estimated tax payments.

Image result for tax humor images The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.

The IRS announced January 16, 2019, that it is waiving the estimated tax penalty for many taxpayers who’s 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year. This relief is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act (TCJA), the far-reaching tax reform law enacted in December 2017. Taxpayers are urged to check their withholding again this year to make sure they are having the right amount of tax withheld. [ Withholding Calculator ] Continue reading

By C Fitts Tax Solutions, LLC Posted in Tax Talk
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Don’t miss out on facts about IRAs, upcoming deadlines and your tax filing status!

retirement planWhat Are Individual Retirement Arrangements (IRA) and How Can You Get One?

Did you know that you can deposit money into an IRA for retirement through a:

  • bank or other financial institution?
  • life insurance company?
  • mutual fund?
  • stockbroker?

Contributions can be either tax-deductible, matched by an employer, controlled by the employee or tax-free. Distributions can be voluntary or mandatory, and funds can be rolled-over if changing employment. Click here to learn more.

tax form with callculator and glassesOct-15 Filing Extension Deadline Is Near!

More than 14 million taxpayers filed for an extension in 2018 and, although Oct. 15 is the last day for most people to file, some may have more time. They include:

  • Members of the military and others serving in combat zone localities still have more time. They typically have until at least 180 days after they leave the combat zone to both file returns and pay any taxes due.
  • Taxpayers in several disaster area localities who already had valid extensions now have more time to file. Currently, taxpayers in parts of California, North Carolina, South Carolina and Texas qualify for this relief. For details, see the disaster relief page on IRS.gov. However, like other extension filers, these taxpayers were required to pay what they owed by April 18, which was this year’s filing deadline for 2017 tax returns.

Click here for information about how long to keep tax return copies, why you should adjust your paycheck withholding, how to pay balance(s) due and more.

Father and sonFacts About Choosing a Filing Status!

Did you know that your filing status could change during the year? If this happens just remember that your marital status on Dec. 31 is your status for the whole year.

Sometimes more than one filing status may apply to taxpayers. When that happens, taxpayers should choose the one that allows them to pay the least amount of tax.

Claiming the wrong filing status can affect the amount of tax you owe for the year. Learn about the five filing statuses and a description of who claims them by clicking here.

By C Fitts Tax Solutions, LLC Posted in Tax Talk
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Third estimated tax payment due Sept. 17

estimated tax word abstract in wood typeTax reform brings major changes for the current tax year. To avoid an unwelcome surprise at tax time, filers who need to pay their taxes quarterly are reminded that the third estimated tax payment for 2018 is due on Monday, Sept. 17, 2018.

The Tax Cuts and Jobs Act, enacted in December 2017, changes the way tax is calculated for most taxpayers. As a result, many taxpayers may need to raise or lower the amount of tax they pay each quarter through the estimated tax system.

Form 1040-ES is designed to help taxpayers figure these payments simply and accurately. The estimated tax package includes a quick rundown of key tax changes, income tax rate schedules for 2018 and a useful worksheet for figuring the right amount to pay. The IRS also mailed 1 million Form 1040-ES vouchers with instructions in late March to taxpayers who used this form last year.

Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, which can help taxpayers determine whether they should pay estimated tax. Also look for Pay As You Go in this publication.

The fastest and easiest way to make estimated tax payments is to do so electronically using IRS Direct Pay or the Treasury Department’s Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit IRS.gov/payments. For filers paying by check, the check must be made payable to the “United States Treasury.”

Find out more about who needs to pay quarterly, whether employees have a choice and how to perform a paycheck checkup by searching online for IRS Issue Number: IR-2018-184.

 

By C Fitts Tax Solutions, LLC Posted in Tax Talk
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Tax Filing Extension Expires Oct. 16 for Many Taxpayers!

 Although Oct. 16 is the last day for most people to file, some individuals — such as members of the military serving in a combat zone — are allowed more time to file. Typically, they have until 180 days after they leave the combat zone to both file their return and pay any taxes due.

Also see the disaster relief page on IRS.gov to get details about hurricane relief.

By C Fitts Tax Solutions, LLC Posted in Tax Talk
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Eight arrested in Miami, FL on April 25, 2017, for conspiracy to commit wire fraud!

TIGTA Seal graphic

Treasury Inspector General for Tax Administration

Press Release


April 27, 2017
TIGTA-2017-08
Contact: Karen Kraushaar, Director of Communications
Karen.Kraushaar@tigta.treas.gov
(202) 622-6500

Eight Individuals Arrested for Fraud in IRS Phone Scams

WASHINGTON — J. Russell George, Treasury Inspector General for Tax Administration (TIGTA), announced the arrests of eight individuals based upon indictments that charged eleven individuals who were allegedly involved in schemes to impersonate Internal Revenue Service (IRS) agents in order to obtain money from victims by falsely representing that the victims owed back taxes or other fees. Two of the eleven individuals were charged in an indictment for their fraudulent conduct last year.

Agents representing TIGTA and the Social Security Administration Office of the Inspector General (SSAOIG) arrested eight suspects in Miami, FL on April 25, 2017, for conspiracy to commit wire fraud. According to the court documents, the suspects are responsible for almost $8.8 million in schemes that defrauded more than 7,000 victims.

“These arrests demonstrate that TIGTA and its law enforcement partners continue to make significant progress in our investigations related to the IRS impersonation scam that continues to sweep the country. Over the past three years, this scam has resulted in reported taxpayer losses of more than $55 million,” the Inspector General said. “The scammers are relentless and so are we,” he added. “Our investigators will not rest until we have brought those responsible for this scheme to justice.”

The eight individuals arrested are: Yosvany Padilla, Elio Carballo Cruz, Esequiel Bravo Diaz, Ricardo Fontanella Caballero, Alejandro Valdes, Angel Chapotin Carrillo, Alfredo Echevarria Rios, and Joel Leon Pando. The criminal indictments were filed with the following courts: the U.S. District Court for the Eastern District of Arkansas on April 4, 2017; and on April 19, 2017, in the U.S. District Court for the Northern District of Mississippi (Joel Leon Pando). Two other individuals, Dennis Delgado Caballero and Jeniffer Valerino Nunez, were previously arrested in May of 2016 based upon Criminal Complaints that were filed in the Eastern District of Arkansas. One suspect, Lazaro Hernandez Fleitas, remains at large.

According to the court documents, the suspects knowingly conspired with others to commit wire fraud by falsely impersonating IRS agents and demanding money under such false pretenses. Victims received telephone calls from people claiming to be from the IRS, who told them the IRS would arrest them if they did not make payment immediately. The callers made these threats and used other methods of intimidation to persuade the victims to wire money, utilizing MoneyGram, Walmart2Walmart Money Transfer, and other wire services.

“No legitimate employee of the United States Treasury Department or the Internal Revenue Service will demand that anyone make payments via MoneyGram, Western Union, Walmart2Walmart Money Transfer, or any other money wiring method, for any debt to the IRS or the Department of the Treasury,” George said.

“Nor will the Department of the Treasury demand that anyone pay a debt or secure one by using iTunes cards or other prepaid debit cards,” he said. “If you receive one of these calls, hang up immediately and go to the Treasury Inspector General for Tax Administration (TIGTA) scam reporting page to report the call.”

Investigators verified the identity of the suspects and their activities through a variety of investigative methods. TIGTA and SSAOIG Special Agents conducted the investigations that led to the arrests.

By C Fitts Tax Solutions, LLC Posted in Tax Talk
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13 Ways To Spend Your Tax Refund On Home Improvements

Here’s how to use your refund to refurbish or enhance your home.

$500 refund: It’s all in the details

$1,000 refund: Think upgrades

  • Upgrade your water heater
  • Give your ceiling a lift

$2,000 refund: Add style

  • Upgrade your home’s lighting
  • Treat yourself to wood flooring
  • Build a deck or enhance the one you have

$3,000 refund:  Add features with ROI in mind

  • Add a backsplash to your kitchen
  • Splurge on French doors

$5,000 refund: Go big with projects you’ll enjoy

  • Put up a privacy fence or replace an old one
  • Create a simple outdoor kitchen

 Follow this link for the complete article.