All individual taxpayers and families should claim tax credits for which they are eligible. Tax credits can not only reduce the amount of taxes owed, but some can result in a tax refund. The #earned income tax credit is such a credit. It benefits millions of taxpayers by putting more money in their pockets.

The IRS encourages taxpayers who have claimed the credit to help their friends, family members and neighbors find out about #EITC. They can go to IRS.gov/eitcor use the EITC Assistant tool on IRS.gov, available in English and Spanish. Word of mouth is a great way to help people who may be eligible for this credit in 2019 for the first time. People often become eligible for the credit when their family or financial situation changed in the last year.

Based on income, family size and filing status, the maximum amount of EITC for Tax Year 2018 is:

• $6,431 with three or more qualifying children
• $5,716 with two qualifying children
• $3,461 with one qualifying child
• $519 with no qualifying children

Every year, millions of #taxpayers don’t claim the EITC because they don’t know they’re eligible. Here are some groups the IRS finds often overlook this valuable credit:

• American Tribal communities
• People living in rural areas
• Working grandparents raising grandchildren
• Taxpayers with disabilities
• Parents of children with disabilities
• Active duty military and/or veterans
• Healthcare and Hospitality workers

Free tax help from volunteers:

The IRS works with community organizations around the country to offer free tax preparation services. They train volunteers who prepare taxes for peoplewith low and moderate income. These volunteers can help determine if a taxpayer is eligible to claim the EITC. There are two IRS-sponsored programs:

• Volunteer Income Tax Assistance: This program, also known as VITA, offers free tax return preparation to eligible taxpayers who generally earn $55,000 or less.
  
  
• Tax Counseling for the Elderly: TCE is mainly for people age 60 or older but offers service to all taxpayers. The program focuses on tax issues unique to seniors. AARP participates in the TCE program through AARP Tax-Aide.

More information:

EITC info in:

• Spanish
• Chinese
• Korean
• Russian
• Vietnamese

Share this tip on social media — #IRSTaxTip: Spread the word about a tax credit that helps millions of Americans  https://go.usa.gov/xEt3V

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Tax law changes in the Tax Cuts and Jobs Act affect almost everyone who itemized deductions on tax returns they filed in previous years..  One of these changes is that TCJA nearly doubled the standard deduction for most taxpayers. This means that many individuals may find it more beneficial to take the standard deduction. However, taxpayers may still consider itemizing if their total deductions exceed the standard deduction amounts.

Here are some highlights taxpayers need to know if they plan to itemize deductions:

Medical and dental expenses
Taxpayers can deduct the part of their medical and dental expenses that’s more than 7.5 percent of their adjusted gross income.

State and local taxes
The law limits the deduction of state and local income, sales, and property taxes to a combined, total deduction of $10,000. The amount is $5,000 for married taxpayers filing separate returns. Taxpayers cannot deduct any state and local taxes paid above this amount.

Miscellaneous deductions
The new law suspends the deduction for job-related expenses or other miscellaneous itemized deductions that exceed 2 percent of adjusted gross income. This includes unreimbursed employee expenses such as uniforms, union dues and the deduction for business-related meals, entertainment and travel.

Home equity loan interest
Taxpayers can no longer deduct interest paid on most home equity loans unless they used the loan proceeds to buy, build or substantially improve their main home or second home.

More information:
• Publication 5307, Tax Reform: Basics for Individuals and Families
• Publication 501, Standard Deduction, and Filing Information
• Schedule A, Itemized Deductions
• IRS Tax Map

IRS YouTube Videos:
• Interactive Tax Assistant – English | ASL

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Major #tax law changes affect every taxpayer filing a #2018 tax return this year. To help taxpayers understand these changes, the #IRS created several resources that are available on IRS.gov.

Here’s a quick overview of key changes with a link to more information on IRS.gov:

Tax rates lowered.  Starting in 2018, tax rates are lower for most income brackets. The seven rates range from 10 percent to 37 percent.

• Check out this resource: Publication 5307, Tax Reform Basics for Individuals and Families

Standard deduction nearly doubled. For 2018, the basic standard deduction is $12,000 for singles, $18,000 for heads of household and $24,000 for married couples filing a joint tax return. Higher amounts apply to people who are blind or at least age 65. Along with other changes, this means that more than half of those who itemized their deductions in tax year 2017 may instead take the higher standard deduction on their 2018 tax return.

• Check out this resource: Publication 501, Dependents, Standard Deduction and Filing Information

Various deductions #limited or #discontinued. New limits apply to mortgage interest. Additionally, taxpayers can no longer deduct miscellaneous itemized deductions for job-related costs and certain other expenses. The law also limits the state and local tax deduction to $10,000, $5,000 if married and filing a separate tax return.

• Check out this resource: Instructions for Schedule A, Form 1040

Child Tax Credit doubled, and more people qualify. The maximum credit is now $2,000 for each qualifying child under age 17. The income limit for getting the full credit increased to $400,000 for joint filers and $200,000 for other taxpayers.

• Check out this resource: Publication 972, Child Tax Credit

New credit for other dependents. Taxpayers can claim a $500 credit for each dependent who doesn’t qualify for the Child Tax Credit. This includes older children and qualifying relatives, such as a parent.

• Check out this resource: Tax reform

Personal and dependency exemptions suspended. This means that taxpayers filing a tax return can no longer claim an exemption for themselves, a spouse and dependents.

• Check out this resource: Publication 17, Your Federal Income Tax

More information:
Tax Time Guide 
Be Tax Ready – understanding tax reform changes affecting individuals and families
Interactive Tax Assistant
Subscribe to IRS Tax Tips

Share this tip on social media — #IRSTaxTip: Here’s a quick overview of tax reform changes and where taxpayers can find more info. https://go.usa.gov/xEHng

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IRS YouTube Videos: 
Tax Scams – English | Spanish | ASL
Dirty Dozen – English | Spanish | ASL

WASHINGTON — The Internal Revenue Service today warned the public about a new twist on the IRS impersonation phone scam whereby criminals fake calls from the Taxpayer Advocate Service (TAS), an independent organization within the IRS.

Similar to other IRS impersonation scams, thieves make unsolicited phone calls to their intended victims fraudulently claiming to be from the IRS. In this most recent scam variation, callers “spoof” the telephone number of the IRS Taxpayer Advocate Service office in Houston or Brooklyn. Calls may be ‘robo-calls’ that request a call back. Once the taxpayer returns the call, the con artist requests personal information, including Social Security number or individual taxpayer identification number (ITIN).

TAS can help protect your taxpayer rights. TAS can help if you need assistance resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn’t working as it should. TAS does not initiate calls to taxpayers “out of the blue.” Typically, a taxpayer would contact TAS for help first, and only then would TAS reach out to the taxpayer.

In other variations of the IRS impersonation phone scam, fraudsters demand immediate payment of taxes by a prepaid debit card or wire transfer. The callers are often hostile and abusive.

Alternately, scammers may tell would-be victims that they are entitled to a large refund but must first provide personal information. Other characteristics of these scams include:

• Scammers use fake names and IRS badge numbers to identify themselves.
• Scammers may know the last four digits of the taxpayer’s Social Security number.
• Scammers spoof caller ID to make the phone number appear as if the IRS or another local law enforcement agency is calling.
• Scammers may send bogus IRS emails to victims to support their bogus calls.
• Victims hear background noise of other calls to mimic a call site.
• After threatening victims with jail time or with, driver’s license or other professional license revocation, scammers hang up. Others soon call back pretending to be from local law enforcement agencies or the Department of Motor Vehicles, and caller ID again supports their claim.

Here are some things the scammers often do, but the IRS will not do. Taxpayers should remember that any one of these is a tell-tale sign of a scam.

The IRS will never:

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
• Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
• Demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.
• Ask for credit or debit card numbers over the phone.
• Call about an unexpected refund.

For taxpayers who don’t owe taxes or don’t think they do:

• Please report IRS or Treasury-related fraudulent calls to phishing@irs.gov (Subject: IRS Phone Scam).
• Do not give out any information. Hang up immediately. The longer the con artist is engaged; the more opportunity he/she believes exists, potentially prompting more calls.
• Contact TIGTA to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.
• Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.

For those who owe taxes or think they do:

• Call the IRS at 800-829-1040. IRS workers can help.
• View tax account online. Taxpayers can see their past 24 months of payment history, payoff amount and balance of each tax year owed.

Stay alert to scams that use the IRS or other legitimate companies and agencies as a lure. Tax scams can happen any time of year, not just at tax time. For more information visit Tax Scams and Consumer Alerts on IRS.gov.

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The Tax Cuts and Jobs Act includes tax law changes that affect businesses and the 2018 tax returns they file this year. One change is to fringe benefit deductions, which can affect both a business’s bottom line and its employees’ deductions.

Here is a rundown of these changes:

Transportation fringe benefits
The new law disallows deductions for expenses associated with qualified transportation fringe benefits or expenses incurred providing transportation for commuting, except as necessary for employee safety.
 
Bicycle commuting reimbursements
Under the new tax law, employers can deduct qualified bicycle commuting reimbursements as a business expense for 2018 through 2025. The new tax law suspends the exclusion of qualified bicycle commuting reimbursements from an employee’s income for 2018 through 2025. Employers must now include these reimbursements in the employee’s wages.
 
Moving expenses
Employers must now include moving expense reimbursements in employees’ wages. The new tax law suspends the former exclusion for qualified moving expense reimbursements. There is one exception for active duty members of the U.S. Armed Forces. They can still exclude moving expenses from their income. There is additional guidance on reimbursements for employees’ 2017 moves if an employer reimburses the expenses in 2018. Generally, reimbursements in this situation are not taxed.
 
Achievement awards
Special rules allow an employee to exclude achievement awards from wages if the awards are tangible personal property. An employer also may deduct awards that are tangible personal property, subject to certain deduction limits. The new law clarifies the definition of tangible personal property.

More information
Employer Update

Share this tip on social media — #IRSTaxTip: Tax reform changes to fringe benefit deductions affect business’s bottom line. https://go.usa.gov/xEGaZ.

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