#Know the #telltale #signs of a #scam

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Summertime tends to be when thieves increase their scam attempts. They try to get
people to disclose personal information like Social Security numbers, account
information and passwords.
To avoid becoming a victim, remember these telltale signs of a scam:
The IRS and its authorized private collection agencies will never:
• Call to demand immediate payment using a specific method, such as a prepaid
debit card, gift card or wire transfers. Generally, the IRS will first mail a bill to any
taxpayer who owes taxes. All tax payments should only be made payable to the
U.S. Treasury. Never make checks out to third parties.
• Threaten to immediately bring in local police or other law-enforcement groups to
have you arrested for not paying.
• Demand that you pay your taxes without first giving you the opportunity to
question or appeal the amount owed.
• Ask for credit or debit card numbers over the phone.
• Use email, text messages or social media to discuss personal tax issues, such
as those involving bills or refunds.
For anyone who doesn’t owe taxes and has no reason to think they do, should:
• Not give out any information and hang up immediately.
• Contact the Treasury Inspector General for Tax Administration to report a call or
email. Recipients should also send emails to phishing@irs.gov.
• Report it to the Federal Trade Commission. Add “IRS Telephone Scam” in the
notes.
For anyone who does owe taxes or thinks they do, can:
• View tax account information online at IRS.gov to see the actual amount owed.
You can then also review your payment options.
• Call the number on the billing notice they received.
• Call the IRS at 800-829-1040. IRS workers can help.
Date: August 10, 2018

August 8, 2018 0

#IRS issues proposed regulations on new #20_percent_deduction for #passthrough #businesses

WASHINGTON — The Internal Revenue Service issued proposed regulationstoday for a new provision allowing many owners of sole proprietorships, partnerships, trusts and S corporations to deduct 20 percent of their qualified business income.

The new deduction — referred to as the Section 199A deduction or the deduction for qualified business income — was created by the Tax Cuts and Jobs Act. The deduction is available for tax years beginning after Dec. 31, 2017. Eligible taxpayers can claim it for the first time on the 2018 federal income tax return they file next year.

The deduction is generally available to eligible taxpayers whose 2018 taxable incomes fall below $315,000 for joint returns and $157,500 for other taxpayers. It’s generally equal to the lesser of 20 percent of their qualified business income plus 20 percent of their qualified real estate investment trust dividends and qualified publicly traded partnership income or 20 percent of taxable income minus net capital gains.

Deductions for taxpayers above the $157,500/$315,000 taxable income thresholds may be limited. Those limitations are fully described in the proposed regulations.

Qualified business income includes domestic income from a trade or business. Employee wages, capital gain, interest and dividend income are excluded.

In addition, Notice 2018-64, also issued today, provides methods for calculating Form W-2 wages for purposes of the limitations on this deduction. More information may be found at www.IRS.gov.

Taxpayers may rely on the rules in these proposed regulations until final regulations are published in the Federal Register.

Written or electronic comments and requests for a public hearing on this proposed regulation must be received within 45 days of publication in the Federal Register.

August 8, 2018 0

#Taxpayers can #monitor their #IRS #information #online

Taxpayers can access their federal tax information through a secure login at IRS.gov/account. After logging in, the user can view:

The amount they #owe
Their payment history
#Tax records
Key information from their most recent tax return as originally filed

A taxpayer can monitor their personal tax account by keeping track of payments and taxes owed. This online information is the same as what’s provided by IRS representatives.

Taxpayers who owe can pay from their bank account or with a debit or credit card. Taxpayers who need more time to pay can also apply for a payment plan, including an installment agreement. Other payment options are available at IRS.gov/payments.

First-time users must authenticate their identity through the Secure Access process. Additional information about secure access can be found at IRS.gov/secureaccess. Returning users can log in with their user name and password.

The account balance will update no more than once every 24 hours, usually overnight. After making a payment, users should allow up to three weeks for it to appear in the payment history.

The IRS continues to add features to help individual taxpayers conveniently monitor their account information online.

Share this tip on social media — #IRSTaxTip: Taxpayers can monitor their IRS information online https://go.usa.gov/xUGZn

August 7, 2018 0

#Tax #credits help offset #higher #education_costs IN 2018

Taxpayers who pay for higher education in 2018 can see tax savings when they file their tax returns. If taxpayers, their spouses or their dependents take post-high school coursework, they may be eligible for a tax benefit.

There are two credits available to help taxpayers offset the costs of higher education. The American opportunity credit and the lifetime learning credit may reduce the amount of income tax owed. Taxpayers use Form 8863, Education Credits, to claim the credits.

The American opportunity credit is:

Worth a maximum benefit up to $2,500 per eligible student
Only for the first four years at an eligible college or vocational school
For students pursuing a degree or other recognized education credential
Partially refundable. This means if the credit brings the amount of tax owed to zero, 40 percent of any remaining amount of the credit, up to $1,000, is refundable.

The lifetime learning credit is:

Worth a maximum benefit up to $2,000 per tax return, per year, no matter how many students qualify
Available for all years of postsecondary education and for courses to acquire or improve job skills
Available for an unlimited number of tax years

To be eligible to claim the American opportunity credit, or the lifetime learning credit, the law requires a taxpayer or a dependent to have received a Form 1098-T from an eligible educational institution.

More Information:
Tax Benefits for Education: Information Center
Education Credits – AOTC and LLC
American Opportunity Tax Credit: Questions and Answers
Pub 970, Tax Benefits for Education

Share this tip on social media — #IRSTaxTip: Tax credits help offset higher education costs. https://go.usa.gov/xUyYw

July 31, 2018 0

4 States Sue IRS and Treasury Over $10,000 Local Tax Deduction Limit

The legal action initiated on July 17 by Connecticut, Maryland, New Jersey and New York – states with among the highest income tax rates in the country – names Treasury Secretary Steven Mnuchin, Acting IRS Commissioner David Kautter, the U.S. Treasury, the Internal Revenue Service and the U.S. (including all government agencies and departments responsible for the passing and implementing the TCJA) as defendants. It asks to void the new limit on SALT deductions through declaratory and injunctive relief.

Under prior law, taxpayers who itemized deductions on Schedule A generally were able to deduct the full amount of their state and local property taxes, plus either their state income and local income taxes or state and local sales taxes. The alternative sales tax deduction was based on an IRS-approved table (plus add-ons for certain expensive items) or actual receipts.

Typically, residents of states with high income taxes, like those challenging the new SALT provision, opted to deduct state and local income taxes in addition to property taxes. This often turned into their biggest deduction on Schedule A. It’s not unusual for taxpayers in certain parts of the country to pay tens of thousands of dollars each in state and local property taxes and income taxes.

But the TCJA limits the annual deduction for any allowable combination of SALT payments to only $10,000. This change takes effect in 2018 and is scheduled to last through 2025.

In the lawsuit complaint, the four states argue that limiting the deduction conflicts with an essential part of the constitution dating back to 1861 and reflecting the Sixteenth Amendment adopted in 1913, carving out state rights in the federal scheme. Thus, they contend that the TCJA provision for SALT payments is unconstitutional.

The states also maintain that the dollar cap resulted from a “rushed and highly partisan” process. Notably, they say that the limit is unfair and causes disproportionate injury to their residents of “blue states.” For instance, it is estimated that taxpayers in New York will owe an extra $14.3 billion in federal tax in 2018 alone. By way of comparison to the $10,000 cap, the average SALT deduction claimed by New York taxpayers in 2015 was almost $22,000.

In addition, the lawsuit alleges that the SALT cap will artificially depress home values in the four states. To compound the damage, the change will have a negative impact on taxpayers who purchased their homes years ago and have come to rely on SALT deductions, only to have the rug pulled from under them without “fair warning.”

Finally, the lawsuit claims that the SALT provision impedes the ability of the states to pay for essential services such as schools, hospitals, police and road and bridge construction and maintenance.

What will the outcome be? Experts are divided, but most agree it will take a lengthy time for the case to progress through the courts. In the meantime, a reconstituted Congress could have a say in the matter.

Referenced- Avalara article dated 7/30/2018

July 30, 2018 0