WASHINGTON — The Internal Revenue Service today reminded small businesses that recent tax reform legislation lowered the backup withholding tax rate to 24 percent and the withholding rate that usually applies to bonuses and other supplemental wages to 22 percent. The agency also urged employers to encourage their employees to check their withholding using the IRS Withholding Calculator. [Read more…]
With the filing deadline close, here’s why taxpayers should e-File
A few taxpayers still use the old-school method of filing their tax returns: on paper. For these people, now is the time to consider filing electronically. With the April tax deadline right around the corner, it’s the perfect time to use IRS e-File.
Here are the top six reasons why taxpayers should file electronically in 2019:
It’s accurate and easy. E-File helps taxpayers avoid mistakes, such as a transposed Social Security number. Taxpayers who e-File receive an acknowledgement from the IRS within minutes, telling them their return has been accepted. If a return is rejected, the acknowledgement will detail why the IRS rejected the tax return.
E-file meets strict security guidelines. It uses modern encryption technology to protect tax returns. The IRS continues to work with states and tax industry leaders to protect tax returns from tax-related identity theft. This effort has helped put strong safeguards in place to make electronic tax filing a safe and secure option.
It means faster refunds. When taxpayers e-File and use direct deposit for their refund, they can get their money in less than 21 days in most cases. On the other hand, if they mail a paper tax return to the IRS and request a refund check in the mail, it can take up to six weeks. Also, since e-Filed returns are generally more accurate, there probably won’t be additional delays. They delays can be caused when the IRS finds mistakes that must be fixed before the IRS can send a refund.
It’s often free. Most taxpayers can e-file for free through IRS Free File. Free File is only available on IRS.gov. Some taxpayers may also qualify to have their taxes e-filed for free through IRS volunteer programs. Volunteer Income Tax Assistance offers free tax preparation to people who generally earned $55,000 or less. Tax Counseling for the Elderly generally helps people who are age 60 or older.
It can be used whether a taxpayer is getting a refund or needs to make a payment. Taxpayers who owe taxes can e-File early and set up an automatic payment on any day until the April deadline. They can pay electronically from their bank account with IRS Direct Pay. Taxpayers can visit IRS.gov for information on other payment options.
As the April tax deadline approaches, the IRS reminds members of the U. S. Armed Forces of special tax breaks, helpful resources
WASHINGTON – The Internal Revenue Service today encouraged members of the military and their families to learn more about the special tax benefits available to them as the April 15 tax filing season deadline approaches.
Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after the April tax filing deadline. Service members who prepare their own return qualify to e-file their federal tax return for free using IRS Free File.
“The IRS appreciates the women and men who are serving in the United States military, both at home and abroad,” said IRS Commissioner Chuck Rettig. “We encourage military families to review the resources available at IRS.gov since there are special circumstances that can affect tax payment and return filing deadlines for military personnel. Lastly, we extend our personal appreciation to each and every member of the military, their families and veterans for your service to our country. We are extremely proud of the many veterans now employed by the IRS, and all of our employees are pleased to serve the members of the military family.”
IRS Publication 3, Armed Forces Tax Guide, is a free booklet filled with valuable information and tips designed to help service members and their families take advantage of all the tax benefits allowed by law. Several key benefits are outlined below.
- Combat pay is partially or fully tax-free. Service members serving in support of a combat zone or in a qualified hazardous duty area may also qualify for this exclusion. In addition, U.S. citizens or resident aliens, such as spouses, that worked as contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones, may now qualify for the foreign earned income exclusion.
- Members of the military, such as those who serve in a combat zone or are serving in contingency operations outside the United States, can postpone most tax deadlines. Those who qualify can get automatic extensions of time to file and pay their taxes.
- The Earned Income Tax Credit is worth up to $6,431. Low- and moderate-income service members who receive nontaxable combat pay can use a special computation method that may boost the EITC, meaning they may owe less tax or get a larger refund.
- Those who served in the Sinai Peninsula of Egypt may qualify for combat zone tax benefits retroactive to June 2015. Under the Tax Cuts and Jobs Act (TCJA) members of the U.S. Army, U.S. Navy, U.S. Marines, U.S. Air Force, and U.S. Coast Guard who performed services in the Sinai Peninsula can now claim combat zone tax benefits.
- Dependent care assistance programs for military personnel are excludable benefits and not included in the military member’s income.
- The moving expenses deduction is suspended, except for certain Armed Forces members. Beginning in 2018, active duty members of the U.S. Armed Forces who must move because of a military order to a permanent change of station can still claim this deduction. Also, allowances paid to move members of the U.S. Armed Forces for a permanent change of station are excluded from tax.
Both spouses normally must sign a joint income tax return, but if one spouse is absent due to certain military duty or conditions, the other spouse may be able to sign for him or her. A power of attorney is required in other instances. A military installation’s legal office may be able to help.
The IRS has a special page on IRS.gov with Tax Information for Members of the U.S. Armed Forces.
IRS urges businesses to e-file cash transaction reports; It’s fast, easy and free
WASHINGTON — The Internal Revenue Service today urged businesses required to file reports of large cash transactions to take advantage of the speed and convenience of filing these reports electronically.
Although businesses have the option of filing Form 8300, Report of Cash Payments Over $10,000, on paper, many have already found that e-filing is a faster, more convenient and cost-effective way to meet the reporting deadline. The form is due 15 days after a transaction and there’s no charge for the e-file option.
Electronically filing Form 8300 is a secure way for businesses to send sensitive information to the IRS. Although many cash transactions are legitimate, information reported on this form can help stop those who evade taxes, profit from the drug trade and engage in terrorist financing and other criminal activities. The government can often trace money from these illegal activities through the payments reported on this and other cash reporting forms.
Businesses that file Form 8300 electronically get free, automatic acknowledgment of receipt when they file. In addition, electronic filing is more accurate, reducing the need for follow-up correspondence with the IRS.
To file Form 8300 electronically, a business must set up an account with the Financial Crimes Enforcement Network’s BSA E-Filing System. For more information, interested businesses can call the BSA E-Filing Help Desk at 866-346-9478 or email them at BSAEFilingHelp@fincen.gov. The help desk is available Monday through Friday from 8 a.m. to 6 p.m. Eastern time.
For more informationabout the reporting requirement, see FS-2019-1, available on IRS.gov. Among other things, the fact sheet includes reporting scenarios for specific businesses, such as automobile dealerships, taxi companies, landlords, colleges and universities, homebuilders and bail-bonding agents. It also lists other resources on IRS.gov related to reporting cash transactions of more than $10,000.
Ten things for taxpayers to think about when choosing a tax preparer
It’s the time of the year when many taxpayers choose a tax preparer to help file a tax return. These taxpayers should choose their tax return preparer wisely. This is because taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return.
Here are ten tips for taxpayers to remember when selecting a preparer:
- Check the Preparer’s Qualifications. People can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool helps taxpayers find a tax return preparer with specific qualifications. The directory is a searchable and sortable listing of preparers.
- Check the Preparer’s History. Taxpayers can ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, people can check with the State Board of Accountancy. For attorneys, they can check with the State Bar Association. For Enrolled Agents, taxpayers can go to the verify enrolled agent status page on IRS.gov or check the directory.
- Ask about Service Fees. People should avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. When asking about a preparer’s services and fees, don’t give them tax documents, Social Security numbers or other information.
- Ask to E-File. Taxpayers should make sure their preparer offers IRS e-file. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit.
- Make Sure the Preparer is Available. Taxpayers may want to contact their preparer after this year’s April 15 due date. People should avoid fly-by-night preparers.
- Provide Records and Receipts. Good preparers will ask to see a taxpayer’s records and receipts. They’ll ask questions to figure things like the total income, tax deductions and credits.
- Never Sign a Blank Return. Taxpayers should not use a tax preparer who asks them to sign a blank tax form.
- Review Before Signing. Before signing a tax return, the taxpayer should review it. They should ask questions if something is not clear. Taxpayers should feel comfortable with the accuracy of their return before they sign it. They should also make sure that their refund goes directly to them – not to the preparer’s bank account. The taxpayer should review the routing and bank account number on the completed return. The preparer should give you a copy of the completed tax return.
- Ensure the Preparer Signs and Includes Their PTIN. All paid tax preparers must have a Preparer Tax Identification Number. By law, paid preparers must sign returns and include their PTIN.
- Report Abusive Tax Preparers to the IRS. Most tax return preparers are honest and provide great service to their clients. However, some preparers are dishonest. People can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their return without the taxpayer’s consent, they should file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.
The best way for taxpayers to check the status of their refund is to use the Where’s My Refund? tool on IRS.gov. This tool gives taxpayers access to their tax return and refund status anytime. All they need is internet access and three pieces of information:
- Their Social Security number
- Their filing status
- The exact whole dollar amount of their refund
Taxpayers can start checking on the status of their return within 24 hours after the IRS received their e-filed return, or four weeks after they mail a paper return. Where’s My Refund? includes a tracker that displays progress through three stages: the IRS receives the tax return, then approves the refund, and sends the refund.
Where’s My Refund? Updates once a day, so taxpayers don’t need to check more often.
Generally, the IRS issues most refunds in less than 21 days, but some may take longer. IRS phone and walk-in representatives can research the status of refunds only if it’s been 21 days or more since a taxpayer filed electronically, or more than six weeks since they mailed a paper return. Taxpayers can also contact the IRS if Where’s My Refund? directs them to do so.
Understanding Tax Return Preparer Credentials and Qualifications
Tax Topic 254 – How to Choose a Tax Return Preparer
Choosing a Tax Professional
Filing for Individuals
e-File Options for Individuals
Paying Your Taxes
What to Expect for Refunds in 2019
Tax Reform: Basics for Individuals and Families
Year-End Tax Tips for Small Business
The holidays are upon us, and that means tax season is just around the corner. What records should you be gathering, and are there any tools on the market that can make organizing your finances easier? How will the new tax law changes affect the way you file? Should you expect to owe more in taxes this year, or will Uncle Sam be cutting you a bigger check?
- What records you should be gathering to prepare for filing your 2018 taxes
- When important deadlines are for filing business taxes
- Highlights of the Tax Cuts and Jobs Act, and how it affects your taxes
- What some commonly missed tax deductions are
- What your options are in terms of tax preparation services
- Plus more!
Contact us today for more information: (Phone) 1-888-987-NEST; ext. 108, (Fax) 1-866-902-0435, (Email) email@example.com
IRS reminder: Third estimated tax payment due Sept. 17;
Tools are available to help people pay right amount following law changes
WASHINGTON – With tax reform bringing major changes for the current tax year, the Internal Revenue Service today reminded small businesses, self-employed individuals, retirees, investors and others who need to pay their taxes quarterly that the third estimated tax payment for 2018 is due on Monday, Sept. 17, 2018.
This is the fourth in a series of news releases aimed at helping taxpayers pay the right amount of tax, avoid an estimated tax penalty and encourage them to check their withholding now. This is part of the wider Paycheck Checkup campaign to help taxpayers, including those paying estimated taxes, avoid an unwelcome surprise at tax time.
The Tax Cuts and Jobs Act, enacted in December 2017, changed the way tax is calculated for most taxpayers, including those with substantial income not subject to withholding. Among other reforms, the new law changed the tax rates and brackets, revised business expense deductions, increased the standard deduction, removed personal exemptions, increased the child tax credit and limited or discontinued certain deductions. 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, available on IRS.gov, 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.
A companion publication, 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, such as those who have dividend or capital gains income, owe alternative minimum tax or have other special situations.
Who needs to pay quarterly?
Most often, self-employed people, including some individuals involved in the sharing economy, need to pay quarterly installments of estimated tax. Similarly, investors, retirees and others – a substantial portion of whose income is not subject to withholding – often need to make these payments as well. Other income generally not subject to withholding includes interest, dividends, capital gains, alimony and rental income.
Because the U.S. tax system operates on a pay-as-you-go basis, taxpayers are required, by law, to pay most of their tax liability during the year. For 2018, this means that an estimated tax penalty will normally apply to any party that pays too little tax — generally less than 90 percent of the tax shown on the return for the current tax year or 100 percent of the tax shown on the return for the preceding tax year — during the year through withholding, estimated tax payments or a combination of the two.
Exceptions to the penalty and special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently became disabled, recent retirees, and those who receive income unevenly during the year. In addition, you may avoid a penalty for underpayment of estimated taxes if you owe less than $1,000 in tax after subtracting your withholding and estimated tax payments and credits or if you did not have any tax liability for the preceding taxable year (subject to certain conditions). Generally, for the 2018 tax year, taxpayers will not have an estimated tax penalty if they make payments equal to the lesser of 90 percent of the tax to be shown on their 2018 return or 100 percent of the tax shown on their 2017 return (110 percent if their income was more than $150,000). See Form 2210 and its instructions for more information.
Employees have a choice
Many employees who also receive income from other sources may be able to forgo making estimated tax payments and instead increase the amount of income tax withheld from their pay. They can do this by claiming fewer withholding allowances on their Form W-4, based on completing the Deductions, Adjustments, and Additional Income Worksheet in the instructions section. If that’s not sufficient, on the Form W-4 they can ask their employer to withhold an additional flat-dollar amount each pay period.
Perform a ‘Paycheck Checkup’
Because of the far-reaching tax changes taking effect this year, the IRS urges all employees, including those with other sources of income, to perform a Paycheck Checkup now. Doing so now will help avoid an unexpected year-end tax bill and possibly a penalty. The easiest way to do this is to use the Withholding Calculator available on IRS.gov.
To use the Withholding Calculator most effectively, users should have a copy of last year’s tax return and recent paystub. After filling out the Withholding Calculator, the tool will recommend the number of allowances the employee should claim on their Form W-4. Though primarily designed for employees who receive wages, the Withholding Calculator can also be helpful to some recipients of pension and annuity income.
If the Withholding Calculator suggests a change, the employee should fill out a new Form W-4 and submit it to their employer as soon as possible. Similarly, recipients of pensions and annuities can make a change by filling out Form W-4P and giving it to their payer.
Employees who expect to receive long term capital gains or qualified dividends, or employees who owe self-employment tax, alternative minimum tax, or tax on unearned income of minors should use the instructions in Publication 505 to check whether they should change their withholding or pay estimated tax.
How and when to pay
For tax-year 2018, estimated tax payment due dates are April 18, June 15, Sept. 17 and Jan. 15, 2019. Taxpayers still due a refund on their 2017 federal income tax return may be able to reduce or even skip one or more of these payments by choosing to apply their 2017 refund to their 2018 estimated tax. See Form 1040 and its instructions for more information.
Taxpayers in presidentially-declared disaster areas may have more time to make these payments without penalty. Visit the Tax Relief in Disaster Situations page for details.
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.”
Everyone should know how the IRS contacts taxpayers. This will help people avoid becoming a victim of scammers who pretend to be from the IRS with a goal of stealing personal information.
Here are some facts about how the IRS communicates with taxpayers:
- The IRS doesn’t normally initiate contact with taxpayers by email.
- The agency does not send text messages or contact people through social media.
- When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service. Fraudsters will send fake documents through the mail, and in some cases will claim they already notified a taxpayer by U.S. mail.
- Depending on the situation, IRS employees may first call or visit with a taxpayer. In some instances, the IRS sends a letter or written notice to a taxpayer in advance, but not always.
- IRS revenue agents or tax compliance officers may call a taxpayer or tax professional after mailing a notice to confirm an appointment or to discuss items for a scheduled audit.
- Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice.
- IRS revenue officers and agents routinely make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed, delinquent tax returns or a business falling behind on payroll tax deposits. IRS revenue officers will request payment of taxes owed by the taxpayer. However, taxpayers should remember that payment will never be requested to a source other than the U.S. Treasury.
- When visited by someone from the IRS, the taxpayers should always ask for credentials. IRS representatives can always provide two forms of official credentials: a pocket commission and a Personal Identity Verification Credential.
Motivator excursions, meetings and different kinds of worker travel are basic courses for businesses to prepare, compensate and inspire their best representatives and chiefs. In any case, off-site work occasions can likewise be a legitimate land mine. From wounds to ambushes to liquor related episodes, your independent venture needs laborers’ comp scope to be set up for the different issues that can surface on work-supported treks—and possibly prompt exorbitant claims.
Here are probably the most widely recognized significant issues that jump up amid worker excursions and gatherings, alongside genuine circumstances:
In 2006, Danny Douglas, a PC bolster examiner for Advertisement Astra in Overland Stop, Kansas, went to an organization supported “group building” occasion at an indoor go-truck hustling office. Representatives were given a short get up and go discuss an up and coming item and were then isolated into groups and told they could win prizes by going the quickest. While adjusting a bend at 25 miles for every hour, Douglas was tossed from his go-truck and arrived on his side and endured a broke rib and lung damage that required prompt medical procedure.
His organization at first declined to pay laborers pay since it guaranteed the movement was willful; a judge later decided that the organization must pay specialists’ comp, as indicated by SafetyNewsAlert.com. The case in the long run achieved the Kansas Incomparable Court, which concurred that it seemed likely that Douglas was required to either be working or at the go-truck office, however said the state’s specialist remuneration board expected to reconsider the case utilizing an alternate test.
A previous Microsoft director in the Assembled Kingdom, Simon Negus, was fired for “untrustworthiness” after he was professedly observed kissing another Microsoft worker at an Atlanta meeting in 2009. The organization rejected Negus the next September and sued him for $126,000—some portion of his 2008 marking reward—and for another piece of his vacation pay, as indicated by Bloomberg. Negus later counter-sued. For another situation of asserted offense, no less than one programming designer was laid off from his manager in 2013 after a tech blogger caught him and another engineer making jokes sexual in nature about “dongles” at PyCon, a Python designer meeting in Santa Clause Clara, California, as indicated by ArsTechnica.com.
Sickness and sustenance harming.
Legionnaire’s sickness is maybe the most scandalous instance of a noteworthy ailment episode amid a tradition (of the American Army in 1976). Be that as it may, representatives becoming ill amid a business related occasion isn’t so bizarre, truly. There’s dependably the hazard that representatives they will get sustenance harming or get an infectious ailment when going for work. Prior this year, indeed, in excess of 100 participants of—amusingly—a nourishment security summit in Baltimore, Maryland clearly got tired after one of the dinners, as per NBC News. Around 12 hours after the dinner, numerous visitors revealed queasiness, the runs and different side effects regularly connected with nourishment borne ailments. No participants were hospitalized and nourishment security overseers couldn’t promptly find the reason for the disease. Episodes, for example, this are simply one more motivation behind why organizations ought to consider a laborers’ pay protection design.
At the point when outside the workplace—notwithstanding when actually on the clock—in some cases representatives can get stuck in an unfortunate situation. A judge in Guadalupe Area, Texas, Mike Wiggins, was captured on medicate ownership when going to a gathering in 2012. A laborer at the inn where the meeting was occurring noticed pot amid the gathering and followed it back to Wiggins’ room, as per KWTX.com.
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