tag:blogger.com,1999:blog-5768100662224976812024-03-08T11:38:58.646-05:00Shawn M. Williams, CPA, LLC Blog - Helping Businesses and Individuals See Through the NumbersWhether looking for assistance with tax preparation, business consulting, auditing or payroll and bookkeeping services, Shawn M. Williams, CPA, LLC is absolutely dedicated to providing services and solutions that will assist you in setting and achieving your financial goals. Explore our Website and blog to learn about all the ways that we can help you do just that...and more. To find out more about seeing through the numbers, please contact us for your free initial consultation.Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.comBlogger87125tag:blogger.com,1999:blog-576810066222497681.post-2112327647641849202019-01-10T08:15:00.002-05:002019-01-10T08:15:37.415-05:00Despite Government Shutdown, Tax Filing Season Starts January 28The IRS has announced that despite the government shutdown, the 2019 tax filing season will begin on Monday, 1/28/19. The agency maintains the position that it has the authority to pay refunds despite a lapse in annual appropriations, and the Office of Management and Budget (OMB) agrees. Therefore, the IRS will be recalling a significant portion of its furloughed personnel to work. Additional information regarding the upcoming filing season will be included in an updated FY2019 Lapsed Appropriations Contingency Plan. For most taxpayers, the deadline to file 2018 tax returns is Monday, 4/15/19. However, taxpayers living in Maine or Massachusetts have until 4/17/19 due to the Emancipation Day holiday.Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com1tag:blogger.com,1999:blog-576810066222497681.post-6304412042054118192018-12-18T09:30:00.002-05:002018-12-18T09:30:19.997-05:002019 Standard Mileage Rates<span style="font-family: "Calibri",sans-serif; font-size: 11.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">Beginning 1/1/19, the standard mileage rates for cars, vans, pickups,
and panel trucks will be 58 cents per mile for business miles, 20 cents per
mile for medical or moving purposes, and 14 cents per mile for charitable
purposes. However, the rates cannot be used to claim an itemized deduction for
unreimbursed employee travel expense or for moving expenses (except for certain
members of the U.S. Armed Forces) because these deductions were suspended for
2018-2025 by the Tax Cuts and Jobs Act. The portion of the business standard
mileage rate treated as depreciation is 24 cents per mile for 2015 and 2016, 25
cents per mile for 2017 and 2018, and 26 cents per mile for 2019. When
computing the allowance under a Fixed and Variable Rate (FAVR) plan, the
standard vehicle cost cannot exceed $50,400 for autos, trucks, or vans. Notice
2019-2; News Release IR-2018-251 </span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com1tag:blogger.com,1999:blog-576810066222497681.post-31288774853440728362018-03-05T10:55:00.002-05:002018-03-05T10:55:47.678-05:00IRS Warns Taxpayers about New Refund Scam<span style="font-family: "Times New Roman","serif"; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">The IRS has alerted
taxpayers of a new scam in which criminals deposit fraudulent tax refunds into
an individual's bank account and then attempt to reclaim the funds. They
accomplish this by (1) hacking tax practitioners' computers to steal taxpayer
data; (2) using the stolen information to file fraudulent tax returns; (3)
having the refunds deposited into the taxpayers' bank accounts; and (4) telling
the victims the money was mistakenly deposited into their accounts and asking
them to return it. Criminals may pose as debt collection agency officials
acting on behalf of the IRS, or the taxpayer may receive an automated call
purportedly from the IRS. The IRS encourages victims of this scam to follow the
procedures outlined in Tax Topic Number 161— <em>Returning an Erroneous Refund.
</em>Also, taxpayers should immediately discuss the issue with their financial
institutions and tax preparers. IRS Tax Tip 2018-32.</span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com1tag:blogger.com,1999:blog-576810066222497681.post-18364148784789027292018-02-28T17:14:00.002-05:002018-02-28T17:14:44.720-05:00Updated Withholding Calculator, Form W-4 Released; Calculator Helps Taxpayers Review Withholding Following New Tax Law<div style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 21px;">
The Internal Revenue Service today released an updated Withholding Calculator on <a dir="ltr" href="http://irs.gov/" x-apple-data-detectors-result="4" x-apple-data-detectors-type="link" x-apple-data-detectors="true">IRS.gov</a> and a new version of Form W-4 to help taxpayers check their 2018 tax withholding following passage of the Tax Cuts and Jobs Act in December.</div>
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The IRS urges taxpayers to use these tools to make sure they have the right amount of tax taken out of their paychecks.</div>
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“Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they’re having the right amount of tax withheld for their personal situation,” said Acting IRS Commissioner David Kautter.</div>
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The <a href="http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTgwMjI4Ljg2MTY1MzExJm1lc3NhZ2VpZD1NREItUFJELUJVTC0yMDE4MDIyOC44NjE2NTMxMSZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTE3MTc0ODA3JmVtYWlsaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZ1c2VyaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&127&&&https://www.irs.gov/newsroom/tax-reform">Tax Cuts and Jobs Act</a> made changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets.</div>
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If changes to withholding should be made, the <a href="http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTgwMjI4Ljg2MTY1MzExJm1lc3NhZ2VpZD1NREItUFJELUJVTC0yMDE4MDIyOC44NjE2NTMxMSZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTE3MTc0ODA3JmVtYWlsaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZ1c2VyaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&128&&&https://www.irs.gov/individuals/irs-withholding-calculator">Withholding Calculator</a> gives employees the information they need to fill out a new <a href="http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTgwMjI4Ljg2MTY1MzExJm1lc3NhZ2VpZD1NREItUFJELUJVTC0yMDE4MDIyOC44NjE2NTMxMSZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTE3MTc0ODA3JmVtYWlsaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZ1c2VyaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&129&&&https://www.irs.gov/forms-pubs/about-form-w4">Form W-4</a>, Employee’s Withholding Allowance Certificate. Employees will submit the completed W-4 to their employer.</div>
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“Withholding issues can be complicated, and the calculator is designed to help employees make changes based on their personal financial situation,” Kautter said. “Taking a few minutes can help taxpayers ensure they don’t have too little – or too much – withheld from their paycheck.”</div>
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The withholding changes do not affect 2017 tax returns due this April. However, having a completed 2017 tax return can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year.</div>
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<strong>Steps to Help Taxpayers: Do a “Paycheck Checkup” </strong></div>
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The IRS encourages employees to use the Withholding Calculator to perform a quick “paycheck checkup.” An employee checking their withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time in 2019. It can also prevent employees from having too much tax withheld; with the average refund topping $2,800, some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks.</div>
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The Withholding Calculator can be used by taxpayers who want to update their withholding in response to the new law or who start a new job or have other changes in their personal circumstances in 2018.</div>
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As a first step to reflect the tax law changes, the IRS released new <a href="http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTgwMjI4Ljg2MTY1MzExJm1lc3NhZ2VpZD1NREItUFJELUJVTC0yMDE4MDIyOC44NjE2NTMxMSZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTE3MTc0ODA3JmVtYWlsaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZ1c2VyaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&130&&&https://www.irs.gov/newsroom/2018-withholding-tables-now-available">withholding tables</a> in January. These tables were designed to produce the correct amount of tax withholding -- avoiding under- and over-withholding of tax -- for those with simple tax situations. This means that people with simple situations might not need to make any changes. Simple situations include singles and married couples with only one job, who have no dependents, and who have not claimed itemized deductions, adjustments to income or tax credits.</div>
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People with more complicated financial situations might need to revise their W-4. With the new tax law changes, it’s especially important for these people to use the Withholding Calculator on <a dir="ltr" href="http://irs.gov/" x-apple-data-detectors-result="6" x-apple-data-detectors-type="link" x-apple-data-detectors="true">IRS.gov</a> to make sure they have the right amount of withholding.</div>
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Among the groups who should check their withholding are:</div>
<ul style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 21px;">
<li>Two-income families.</li>
<li>People with two or more jobs at the same time or who only work for part of the year.</li>
<li>People with children who claim credits such as the Child Tax Credit.</li>
<li>People who itemized deductions in 2017.</li>
<li>People with high incomes and more complex tax returns.</li>
</ul>
<div style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 21px;">
Taxpayers with more complex situations might need to use Publication 505, Tax Withholding and Estimated Tax, expected to be available on <a dir="ltr" href="http://irs.gov/" x-apple-data-detectors-result="7" x-apple-data-detectors-type="link" x-apple-data-detectors="true">IRS.gov</a> in early spring, instead of the Withholding Calculator. This includes those who owe self-employment tax, the alternative minimum tax, or tax on unearned income from dependents, and people who have capital gains and dividends.</div>
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<strong>Plan Ahead: Tips for Using the Withholding Calculator</strong></div>
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The Withholding Calculator asks taxpayers to estimate their 2018 income and other items that affect their taxes, including the number of children claimed for the Child Tax Credit, Earned Income Tax Credit and other items.</div>
<div style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 21px;">
Take a few minutes and plan ahead to make using the calculator on <a dir="ltr" href="http://irs.gov/" x-apple-data-detectors-result="8" x-apple-data-detectors-type="link" x-apple-data-detectors="true">IRS.gov</a> as easy as possible. Here are some tips:</div>
<ul style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 21px;">
<li>Gather your most recent pay stub from work. Check to make sure it reflects the amount of Federal income tax that you have had withheld so far in 2018.</li>
<li>Have a completed copy of your 2017 (or possibly 2016) tax return handy. Information on that return can help you estimate income and other items for 2018. However, note that the new tax law made significant changes to itemized deductions.</li>
<li>Keep in mind the Withholding Calculator results are only as accurate as the information entered. If your circumstances change during the year, come back to the calculator to make sure your withholding is still correct.</li>
<li>The Withholding Calculator does not request personally-identifiable information such as name, Social Security number, address or bank account numbers. The IRS does not save or record the information entered on the calculator. As always, watch out for tax scams, especially via email or phone calls and be especially alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the calculator or the information entered.</li>
<li>Use the results from the Withholding Calculator to determine if you should complete a new Form W-4 and, if so, what information to put on a new Form W-4. There is no need to complete the worksheets that accompany Form W-4 if the calculator is used.</li>
<li>As a general rule, the fewer withholding allowances you enter on the Form W-4 the higher your tax withholding will be. Entering “0” or “1” on line 5 of the W-4 means more tax will be withheld. Entering a bigger number means less tax withholding, resulting in a smaller tax refund or potentially a tax bill or penalty.</li>
<li>If you complete a new Form W-4, you should submit it to your employer as soon as possible. With withholding occurring throughout the year, it’s better to take this step early on.</li>
</ul>
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<strong>More information</strong></div>
<div style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 21px;">
This spring and throughout the year, the IRS will be working closely with businesses as well as the tax and payroll communities to help educate the public about the new withholding guidelines and the Withholding Calculator.</div>
<div style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 21px;">
For 2019, the IRS plans to make further changes involving withholding. The agency will work with businesses and the tax and payroll communities to explain and implement these additional changes.</div>
<div style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 21px;">
More information is available in the special <a href="http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTgwMjI4Ljg2MTY1MzExJm1lc3NhZ2VpZD1NREItUFJELUJVTC0yMDE4MDIyOC44NjE2NTMxMSZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTE3MTc0ODA3JmVtYWlsaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZ1c2VyaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&131&&&https://www.irs.gov/newsroom/withholding-calculator-frequently-asked-questions">Withholding Calculator Frequently Asked Questions</a>.</div>
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Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com1tag:blogger.com,1999:blog-576810066222497681.post-19786806718205593162018-02-21T13:01:00.002-05:002018-02-21T13:01:21.794-05:00A New Twist on an Old Scam - Watch for Erroneous Refunds!
<br />
<div class="MsoNormal" style="line-height: 21pt; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto;">
<span lang="EN" style="color: #333333; font-family: averta; font-size: 12pt; mso-ansi-language: EN; mso-bidi-font-family: Arial; mso-fareast-font-family: "Times New Roman";">The Internal Revenue Service warned taxpayers Tuesday to beware of a
quickly proliferating scam involving erroneous tax refunds being deposited in
their bank accounts, after a data breach on their tax preparers' computers
gives them access to sensitive client information. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 21pt; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto;">
<span lang="EN" style="color: #333333; font-family: averta; font-size: 12pt; mso-ansi-language: EN; mso-bidi-font-family: Arial; mso-fareast-font-family: "Times New Roman";">The IRS also provided taxpayers with a step-by-step explanation for how
they can return the funds and avoid falling prey to the scammers.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 21pt; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto;">
<span lang="EN" style="color: #333333; font-family: averta; font-size: 12pt; mso-ansi-language: EN; mso-bidi-font-family: Arial; mso-fareast-font-family: "Times New Roman";">The new alert follows up on a Security Summit alert that came out earlier
this month warning tax professionals about phishing emails that can download
malware onto computers if they are clicked (see <u><a href="https://www.accountingtoday.com/news/irs-sees-new-filing-season-scam-hitting-tax-pros"><span style="color: #0093d0; text-decoration: none; text-underline: none;">IRS sees new
filing season scam hitting tax pros</span></a></u>). The IRS released the extra
warning Tuesday about the new scheme after learning that more tax practitioners’
computer files have been breached. On top of that, the number of potential
taxpayer victims jumped from a few hundred to several thousand in only a few
days. The IRS’s Criminal Investigation division is continuing to investigate
the expanding scope and breadth of this scheme.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 21pt; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto;">
<span lang="EN" style="color: #333333; font-family: averta; font-size: 12pt; mso-ansi-language: EN; mso-bidi-font-family: Arial; mso-fareast-font-family: "Times New Roman";">Basically this is a new twist on an old scam, the IRS noted. After the
cybercriminals steal client data from tax professionals and file fraudulent tax
returns, they use the taxpayers' real bank accounts for the deposit. Thieves then
employ various tactics to reclaim the refund from taxpayers. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 21pt; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto;">
<span lang="EN" style="color: #333333; font-family: averta; font-size: 12pt; mso-ansi-language: EN; mso-bidi-font-family: Arial; mso-fareast-font-family: "Times New Roman";">The scam is continuing to evolve in new versions. In one version, the
criminals impersonate debt collection agency officials acting on behalf of the
IRS. They contact taxpayers to tell them a tax refund was deposited in error
and ask taxpayers to send the money to their collection agency.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 21pt; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto;">
<span lang="EN" style="color: #333333; font-family: averta; font-size: 12pt; mso-ansi-language: EN; mso-bidi-font-family: Arial; mso-fareast-font-family: "Times New Roman";">In another version, the taxpayer who received the erroneous refund receive
an automated phone call with a recorded voice saying he is from the IRS and
threatens the taxpayer with criminal fraud charges, an arrest warrant and a
“blacklisting” of their Social Security Number. The recorded voice provides the
taxpayer with a case number and a phone number to call to give back the
mistaken refund.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 21pt; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto;">
<span lang="EN" style="color: #333333; font-family: averta; font-size: 12pt; mso-ansi-language: EN; mso-bidi-font-family: Arial; mso-fareast-font-family: "Times New Roman";">The IRS repeated its warning from last week for tax professionals to
increase the security of their sensitive client tax and financial files. The
IRS is also asking taxpayers to follow the established procedures for returning
an erroneous refund to the Service. The IRS wants taxpayers to discuss the
issue with their financial institutions because there may be a need to close
bank accounts. Taxpayers who get erroneous refunds also should contact their
tax preparers immediately.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 21pt; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto;">
<span lang="EN" style="color: #333333; font-family: averta; font-size: 12pt; mso-ansi-language: EN; mso-bidi-font-family: Arial; mso-fareast-font-family: "Times New Roman";">As this is now peak season for filing returns, taxpayers who file
electronically could find their tax return has been rejected because another
return with their Social Security number is already on file. If that happens,
taxpayers should follow the steps detailed in the <b><a href="https://www.irs.gov/newsroom/taxpayer-guide-to-identity-theft" target="_blank"><span style="color: #0093d0; text-decoration: none; text-underline: none;">Taxpayer Guide to Identity Theft</span></a></b>. Taxpayers who can’t file
electronically should mail a paper tax return along with Form 14039, Identity
Theft Affidavit, telling the IRS they were victims of a tax preparer data
breach. Taxpayers who receive the refunds should follow the steps in <b><a href="https://www.irs.gov/taxtopics/tc161" target="_blank"><span style="color: #0093d0; text-decoration: none; text-underline: none;">Tax Topic Number
161 - Returning an Erroneous Refund</span></a></b>. It includes the mailing
addresses in case they to return paper checks to </span><span lang="EN" style="color: #333333; font-family: averta; mso-ansi-language: EN; mso-bidi-font-family: Arial;">return paper checks to the IRS. By law, the IRS noted, interest may accrue
on erroneous refunds.</span></div>
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</div>
Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-74544676743715986372018-02-13T06:35:00.002-05:002018-02-13T06:35:58.020-05:00IRS to Reject 2017 Returns without Health Care Information Reported<span style="font-family: "Calibri",sans-serif; font-size: 11pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">The IRS has said it
will not accept electronically filed 2017 tax returns that do not report on the
taxpayer's compliance with the individual mandate provisions of the Affordable
Care Act (ACA). The IRS did not reject such returns for 2016 after President
Trump issued an executive order that directed federal agencies to waive, defer,
or delay the implementation of ACA provisions that imposed penalties or fees.
The Tax Cuts and Jobs Act reduces the amount of the penalty, or Shared
Responsibility Payment (SRP), to zero for months beginning after 12/31/18, but
for 2017, the IRS says that it won't consider an electronically filed tax
return complete and accurate if the taxpayer does not report full-year
coverage, claim an exemption, or report an SRP on the return. The IRS's
statement can be found at <a href="http://www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals"><span style="color: blue;">www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals</span></a>
.</span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-7586047049336085582018-01-25T05:52:00.001-05:002018-01-25T05:52:14.861-05:00Short-term Funding Bill Delays Several ACA TaxesOn 1/22/18, President Trump signed into law H.R. 195, which funds the federal government through February 8. Among other things, the bill delays the 40% excise tax on high cost employer-sponsored health coverage under IRC Sec. 4980I (commonly referred to as the "Cadillac" tax) for an additional two years. The Cadillac tax is now scheduled to apply for tax years beginning after 12/31/21. In addition, the bill further delays the 2.3% medical device excise tax under IRC Sec. 4191. The delay, which is retroactive to the beginning of 2018, is for an additional two years, meaning that the tax is scheduled to apply to sales after 12/31/19. The annual fee on health insurance providers has been suspended for one year; it is effective for 2018, but suspended for 2019. H.R. 195.Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-75735498136031856252018-01-24T06:24:00.001-05:002018-01-24T06:24:50.586-05:00New Guidance on Passports of Taxpayers with Delinquent Debt<span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;">IRC Sec. 7345 authorizes the IRS to certify “seriously delinquent tax debt” and notify the State Department of such certification. A seriously delinquent tax debt is generally an assessed tax debt that exceeds $50,000 (adjusted for inflation) and for which a notice of lien has been filed. The State Department generally will not issue or renew a passport to, and may revoke or limit a previously issued passport of, a delinquent taxpayer after receiving the certification from the IRS. Under new guidance issued in a Notice, the State Department generally will provide 90 days to a certified taxpayer who applies for a passport to resolve their tax delinquency by allowing them to: (1) resolve any erroneous certification issues, (2) make full payment of the tax debt, or (3) enter into a payment alternative with the IRS. If a taxpayer needs to travel within those 90 days, the taxpayer must contact the IRS and resolve the matter within 45 days from the date of passport application. Notice 2018-1, 2018-3 IRB 299.</span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-36465537567651409272018-01-18T07:00:00.002-05:002018-01-18T07:00:30.099-05:00Taxpayer was liable for million dollar FBAR penalty<span style="-webkit-text-stroke-width: 0px; background-color: transparent; color: #252525; display: inline !important; float: none; font-family: Arial,Helvetica,sans-serif; font-style: normal; font-variant: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: left; text-decoration: none; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;"><span style="font-size: x-small;">The Ninth Circuit found that a taxpayer willfully failed to file a Report of Foreign Bank and Foreign Accounts (FBAR) where IRS assessed a penalty of approximately $1.2 million penalty against the
taxpayer for failing to disclose her financial interests in an overseas account. The Court rejected a variety of the taxpayer's arguments, ranging from the contention that the imposition of the penalty violated the U.S. Constitution's excessive fines, due
process, and ex post facto clauses, to assertions that it was barred by statute of limitations or treaty provisions.</span></span><br />
<span style="-webkit-text-stroke-width: 0px; background-color: transparent; color: #252525; display: inline !important; float: none; font-family: Arial,Helvetica,sans-serif; font-style: normal; font-variant: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: left; text-decoration: none; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;"><span style="-webkit-text-stroke-width: 0px; background-color: transparent; color: black; display: inline !important; float: none; font-family: Arial,Helvetica,sans-serif; font-style: normal; font-variant: normal; font-weight: 700; letter-spacing: normal; line-height: 26.22px; orphans: 2; text-align: center; text-decoration: none; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;"><span style="font-size: x-small;">U. S. v. Bussell, (CA 9 10/25/2017)</span></span></span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-37592694822407815652018-01-15T06:35:00.001-05:002018-01-15T06:35:11.535-05:00IRS Releases Updated 2018 Withholding Tables<span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;">The IRS has released updated withholding tables for 2018. The tables reflect major changes made by the Tax Cuts and Jobs Act (TCJA), including an increase in the standard deduction, elimination of personal exemptions, and modification of tax rates and brackets. Employers should begin using the updated tables as soon as possible, but no later than </span><a dir="ltr" href="x-apple-data-detectors://2" style="-webkit-text-decoration-color: rgba(0, 0, 0, 0.258824); -webkit-text-size-adjust: auto; color: black; font-family: UICTFontTextStyleTallBody; font-size: 17px;" x-apple-data-detectors-result="2" x-apple-data-detectors-type="calendar-event" x-apple-data-detectors="true">2/15/18</a><span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;">. </span><br />
<span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;"><br /></span>
<span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;">In addition, the IRS is now revising, for a late February release, the “withholding tax calculator” on </span><a dir="ltr" href="http://irs.gov/" style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;" x-apple-data-detectors-result="3" x-apple-data-detectors-type="link" x-apple-data-detectors="true">IRS.gov</a><span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;"> . </span><span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;">IRS has not published a 2018 Form W-4, which notifies an employer of an employee’s withholding requirement.</span><span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;"> </span><br />
<span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;"><br /></span>
<span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;">Employees are not required to do anything at this time.</span><span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;"> However, e</span><span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;">mployees are encouraged to use 2017 Form W-4 to update Payroll records on file with their employer, check their actual withholding against the IRS.gov </span><span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;">withholding tax calculator when available,</span><span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleTallBody; font-size: 17px;"> and adjustment withholding early this year to avoid any surprises when filing their 2018 income tax returns.</span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-16254821782077069522018-01-08T07:25:00.001-05:002018-01-08T07:25:26.418-05:002018 Tax Filing Season to Begin January 29<span style="font-family: "Times New Roman","serif"; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">In a recent News
Release, the IRS announced that the 2018 tax filing season will begin on
Monday, 1/29/18, which means that electronic and paper returns will be accepted
beginning on that day. However, the IRS will begin processing paper returns in
mid-February as its systems continue to update. Also, by operation of law, refunds on returns
claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit
(ACTC) cannot be issued before mid-February [ IRC Sec. 6402(m) ]. The IRS
expects the earliest EITC/ACTC related refunds to be available starting on
2/27/18 (if direct deposit is chosen and there are no other issues with the
return). Tax returns are due on April 17 because of a weekend and the
Emancipation Day holiday. News Release IR 2018-1.</span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-75218242246026735312018-01-07T09:37:00.002-05:002018-01-07T09:37:35.122-05:00Masters Degree Expenses Determined Not Deductible<span style="font-family: "Calibri",sans-serif; font-size: 11pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">The taxpayer was an
uncredentialed speech pathologist who was hired by the school district under a
temporary waiver. As a condition of the waiver, she was required to complete
her master's degree within seven years to be qualified as a medical speech
pathologist. The taxpayer enrolled in a master's degree program and claimed
deductions for her tuition, books, and supplies as unreimbursed employee
business expenses that were disallowed by the IRS. The Tax Court agreed,
concluding that the expenses were not deductible because they qualified the
taxpayer to meet the minimum education requirement for employment and also
qualified her for a new trade or business. Under IRC Sec. 162(a) , education
expenses are deductible by the taxpayer when incurred to maintain or improve
skills required in business or employment, or to meet the requirements of the
employer or the law. However, they are not deductible if incurred to meet the
minimum requirements for the taxpayer's present employment. Mary A. Colliver,
TC Summ. Op. 2017-93 (Tax Ct.)</span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-25386701604170164982017-12-28T19:07:00.001-05:002017-12-28T19:07:30.332-05:00IRS Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017<div style="-webkit-text-size-adjust: auto; background-color: white; font-family: arial; font-size: 12px;">
<span style="font-family: Times New Roman; font-size: small;"><span style="font-family: Arial, sans-serif; font-size: 11pt;">The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances. </span></span></div>
<div style="-webkit-text-size-adjust: auto; background-color: white; font-family: arial; font-size: 12px; margin: 0in 0in 0pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed. </span></div>
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<br /></div>
<div style="-webkit-text-size-adjust: auto; background-color: white; font-family: arial; font-size: 12px; margin: 0in 0in 0pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">The following examples illustrate these points.</span></div>
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<div style="-webkit-text-size-adjust: auto; background-color: white; font-family: arial; font-size: 12px; margin: 0in 0in 0pt;">
<u><span style="font-family: Arial, sans-serif; font-size: 11pt;">Example 1</span></u><span style="font-family: Arial, sans-serif; font-size: 11pt;">: Assume County </span><u><span style="font-family: Arial, sans-serif; font-size: 11pt;">A</span></u><span style="font-family: Arial, sans-serif; font-size: 11pt;"> assesses property tax on July 1, 2017 for the period <a dir="ltr" href="x-apple-data-detectors://5" style="-webkit-text-decoration-color: rgba(0, 0, 0, 0.258824); color: black;" x-apple-data-detectors-result="5" x-apple-data-detectors-type="calendar-event" x-apple-data-detectors="true">July 1, 2017 – June 30, 2018</a>. On July 31, 2017, County </span><u><span style="font-family: Arial, sans-serif; font-size: 11pt;">A</span></u><span style="font-family: Arial, sans-serif; font-size: 11pt;"> sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment <a dir="ltr" href="x-apple-data-detectors://8" style="-webkit-text-decoration-color: rgba(0, 0, 0, 0.258824); color: black;" x-apple-data-detectors-result="8" x-apple-data-detectors-type="calendar-event" x-apple-data-detectors="true">due Jan. 31, 2018</a>. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment <a dir="ltr" href="x-apple-data-detectors://9" style="-webkit-text-decoration-color: rgba(0, 0, 0, 0.258824); color: black;" x-apple-data-detectors-result="9" x-apple-data-detectors-type="calendar-event" x-apple-data-detectors="true">on Dec. 31, 2017</a>, and may claim a deduction for this prepayment on the taxpayer’s 2017 return. </span></div>
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<div style="-webkit-text-size-adjust: auto; background-color: white; font-family: arial; font-size: 12px; margin: 0in 0in 0pt;">
<u><span style="font-family: Arial, sans-serif; font-size: 11pt;">Example 2:</span></u><span style="font-family: Arial, sans-serif; font-size: 11pt;"> County </span><u><span style="font-family: Arial, sans-serif; font-size: 11pt;">B</span></u><span style="font-family: Arial, sans-serif; font-size: 11pt;"> also assesses and bills its residents for property taxes on July 1, 2017, for the period <a dir="ltr" href="x-apple-data-detectors://11" style="-webkit-text-decoration-color: rgba(0, 0, 0, 0.258824); color: black;" x-apple-data-detectors-result="11" x-apple-data-detectors-type="calendar-event" x-apple-data-detectors="true">July 1, 2017 – June 30, 2018</a>. County </span><u><span style="font-family: Arial, sans-serif; font-size: 11pt;">B</span></u><span style="font-family: Arial, sans-serif; font-size: 11pt;"> intends to make the usual assessment in July 2018 for the period <a dir="ltr" href="x-apple-data-detectors://12" style="-webkit-text-decoration-color: rgba(0, 0, 0, 0.258824); color: black;" x-apple-data-detectors-result="12" x-apple-data-detectors-type="calendar-event" x-apple-data-detectors="true">July 1, 2018 – June 30, 2019</a>. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County </span><u><span style="font-family: Arial, sans-serif; font-size: 11pt;">B</span></u><span style="font-family: Arial, sans-serif; font-size: 11pt;"> has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year <a dir="ltr" href="x-apple-data-detectors://17" style="-webkit-text-decoration-color: rgba(0, 0, 0, 0.258824); color: black;" x-apple-data-detectors-result="17" x-apple-data-detectors-type="calendar-event" x-apple-data-detectors="true">until July 1, 2018</a>.</span></div>
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<br /></div>
<div style="-webkit-text-size-adjust: auto; background-color: white; font-family: arial; font-size: 12px; margin: 0in 0in 0pt;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See <a href="http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTcxMjI3LjgyOTcyNDQxJm1lc3NhZ2VpZD1NREItUFJELUJVTC0yMDE3MTIyNy44Mjk3MjQ0MSZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTE3MTY2NTQ2JmVtYWlsaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZ1c2VyaWQ9c3dpbGxpYW1zQG5hcGxlc2ZsY3BhLmNvbSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&166&&&https://www.irs.gov/newsroom/get-ready-for-taxes-donations-may-cut-tax-bills"><span style="color: blue;">IR-17-191</span></a> for more information. The deadline to make contributions for individual retirement accounts - which can be used by some taxpayers on 2017 tax returns - is the April 2018 tax deadline. </span></div>
Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-41338911716429761862017-12-22T06:54:00.001-05:002017-12-22T06:54:56.637-05:00Identity Theft—New Phishing Scam Targets Hotmail Accounts<span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 17px;">The IRS is warning taxpayers and tax practitioners about a new email scam targeting Hotmail users. The subject line of the phishing email reads: "Internal Revenue Service Email No. XXXX / We're processing your request soon / TXXXXXX-XXXXXXXX." The message prompts recipients to sign in to a fake Microsoft page, which asks for personal and financial information. To date, the IRS has received over 900 complaints about this new phishing scheme. The IRS reminds taxpayers that it generally doesn't initiate contact by email to request personal or financial information. Those receiving the email should forward it to </span><strong style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 17px;"><a dir="ltr" href="mailto:phishing@irs.gov" x-apple-data-detectors-result="12" x-apple-data-detectors-type="link" x-apple-data-detectors="true">phishing@irs.gov</a> </strong><span style="-webkit-text-size-adjust: auto; font-family: UICTFontTextStyleBody; font-size: 17px;">and then delete it. </span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-48538753149438098592017-12-21T10:25:00.001-05:002017-12-21T10:25:59.067-05:00ICYMI: Florida Minimum Wage Change, January 1, 2018The 2018 minimum wage in Florida is $8.25 per hour, effective January 1, 2018, with a minimum wage of at least $5.23 per hour for tipped employees, in addition to tips.Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-39952009431618786682017-12-20T08:21:00.003-05:002017-12-20T08:21:48.245-05:00Tax Reform Year-end Tips<span style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Here are a few tips and to-dos prior to December 31:</span><br /><span style="color: #272727; font-family: averta, sans-serif;"><span style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%;"><br /></span></span><ul style="box-sizing: border-box; list-style-image: initial; list-style-position: initial; margin: 0px 0px 20px; padding: 0px 0px 0px 2em;">
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Prepay any 2017 state income taxes.</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Pay or prepay Property Tax by December 31.</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Make charitable contributions before December 31.</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Accelerate any of your children’s unearned income into 2017 (rates go up in 2018).</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Defer business income to 2018 (rates go down in 2018, plus deduction)</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Cash-basis taxpayers should pay for business expenses before December 31. </li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Buy and place in service an electric car (tax credit expires at end of 2017).</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Recognize any possible business losses (they will be limited in 2018).</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Prepay investment expenses and tax prep fees in 2017 (nondeductible in 2018).</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Pay any moving expenses related to a job in 2017 (the deduction is eliminated in 2018).</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Sell any business processes or patents before the end of the year (this will be treated as ordinary income in 2018, and is capital gains in 2017).</li>
<li style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; box-sizing: border-box; color: #272727; font-family: averta, sans-serif; font-size: 16px;">Wait to buy a business vehicle until 2018 (depreciation on luxury autos goes up substantially in 2018).</li>
</ul>
<div>
<span style="color: #272727; font-family: averta, sans-serif;"><span style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%;">These tips are general in nature and should not be relied upon as professional advice. You are encouraged to discuss these matters with a professional prior to actions that may affect your tax returns. </span></span></div>
Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-45103043532621118322017-12-15T13:38:00.002-05:002017-12-15T13:38:14.540-05:00IRS Provides Safe Harbors for Determining Casualty and Theft Losses<span style="font-family: "Calibri",sans-serif; font-size: 11.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">In a set of Revenue Procedures, the IRS has provided safe harbor methods
that taxpayers may use in determining the amount of their casualty and theft
losses for their homes and personal belongings. Rev. Proc. 2018-8 offers four
safe harbor methods that apply to any qualifying casualty or theft loss, as
well as three methods that apply only to losses occurring as a result of a
federally declared disaster. Rev. Proc. 2018-9 provides a safe harbor method
that allows a homeowner to use one or more cost indexes to determine the amount
of a home loss due to Hurricanes Harvey, Irma, or Maria (2017 Hurricanes). The
safe harbors outlined in Rev. Proc. 2018-8 are effective on 12/13/17. The
method detailed in Rev. Proc. 2018-9 is effective for losses attributable to a
2017 Hurricane and that arose in the 2017 disaster area after 8/22/17. News
Release IR 2017-202; Rev. Procs. 2018-8, 2018-2 IRB and 2018-9, 2018-2 IRB</span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-40718831643641604162017-12-15T10:15:00.001-05:002017-12-15T10:15:15.216-05:00IRS increases standard mileage rates for 2018The Internal Revenue Service released on Thursday the 2018 optional standard mileage rates that taxpayers and tax professionals can use to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.<br />
Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be<br />
<br />
• 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.<br />
• 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.<br />
• 14 cents per mile driven in service of charitable organizations.<br />
<br />
The IRS noted that the business mileage rate and the medical and moving expense rates have each increased 1 cent per mile from the rates for this year. The charitable rate, however, is set by statute and stays unchanged.<br />
<br />
The standard mileage rate for business comes from an annual study of the fixed and variable costs of operating an automobile, while the rate for medical and moving purposes is based on the variable costs.<br />
<br />
The IRS noted that taxpayers also have the option of figuring the actual costs of using a vehicle instead of relying on the standard mileage rates.<br />
<br />
However, taxpayers can’t use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System or after they claim a Section 179 deduction for that vehicle. On top of that, the business standard mileage rate can’t be used for more than four vehicles used simultaneously. The IRS describes those and other requirements in <a href="https://www.irs.gov/pub/irs-drop/rp-10-51.pdf" target="_blank">Rev. Proc. 2010-51</a>.<br />
<br />
The IRS noted that taxpayers also have the option of figuring the actual costs of using a vehicle instead of relying on the standard mileage rates.<br />
However, taxpayers can’t use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System or after they claim a Section 179 deduction for that vehicle. On top of that, the business standard mileage rate can’t be used for more than four vehicles used simultaneously. The IRS describes those and other requirements in <a href="https://www.irs.gov/pub/irs-drop/rp-10-51.pdf" target="_blank">Rev. Proc. 2010-51</a>.Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-82125248753992985522017-11-20T13:53:00.001-05:002017-11-20T13:53:28.354-05:00Year-end planning in light of potential tax reform
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Dear Client:<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Congress appears poised to enact a
major tax reform law that could potentially make fundamental changes in the way
you and your family calculate your federal income tax bill, and the amount of federal
tax you will pay. This letter is designed to help you cope with the changes
Congress is hammering into shape right now—to take advantage of tax breaks that
may be heading your way, and to soften the impact of any crackdowns. Keep in
mind, however, that while most experts expect a major tax law to be enacted
this year, it's by no means a sure bet. So keep a close eye on the news and
don't swing into action until the ink is dry on the President's signature of
the tax reform bill.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Lower tax rates coming. Both the tax
bill passed the House of Representatives and the one before the Senate would
reduce tax rates for many taxpayers, effective for the 2018 tax year.
Additionally, businesses may see their tax bills cut, although the final form
of the relief isn't clear right now.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">The general plan of action to take
advantage of lower tax rates next year would be to defer income into next year.
Some possibilities follow:<o:p></o:p></span></div>
<br />
<ul type="disc">
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">. . . If you are an employee who believes a bonus is
coming your way before year end, consider asking your employer to delay
payment of the bonus until next year.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">. . . If you are thinking of converting a regular IRA
to a Roth IRA, postpone your move until next year. That way you'll defer
income from the conversion until next year and hopefully have it taxed at
lower rates.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">. . . If you run a business that renders services and
operates on the cash basis, the income you earn isn't taxed until your
clients or patients pay. So if you hold off on billings until next year—or
until so late in the year that no payment can be received this year—you
will succeed in deferring income until next year.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">. . . If your business is on the accrual basis,
deferral of income till next year is difficult but not impossible. For
example, you might, with due regard to business considerations, be able to
postpone completion of a job until 2018, or defer deliveries of
merchandise until next year. Taking one or more of these steps would
postpone your right to payment, and the income from the job or the
merchandise, until next year. Keep in mind that the rules in this area are
complex and may require a tax professional's input.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">. . . The reduction or cancellation of debt generally
results in taxable income to the debtor. So if you are planning to make a
deal with creditors involving debt reduction, consider postponing action
until January to defer any debt cancellation income into 2018.<o:p></o:p></span></li>
</ul>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Disappearing deductions, larger
standard deduction. Beginning next year, both the House-passed tax reform bill
and the version before the Senate would repeal or reduce many popular tax
deductions in exchange for a larger standard deduction. Here's what you can do
about this right now:<o:p></o:p></span></div>
<br />
<ul type="disc">
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l2 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">The House-passed tax reform bill would eliminate the
deduction for nonbusiness state and local income or sales tax, but would
allow an up-to-$10,000 deduction for real estate taxes on your home. The
bill before the Senate would ban all nonbusiness deductions for state and
local income, sales tax, and real estate tax. If you are an employee who
expects to owe state and local income taxes when you file your return next
year, consider asking your employer to increase withholding on those
taxes. That way, additional amounts of state and local taxes withheld
before the end of the year will be deductible in 2017. Similarly, pay the
last installment of estimated state and local taxes for 2017 by Dec. 31
rather than on the 2018 due date, or prepay real estate taxes on your
home.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l2 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Neither the House-passed bill nor the bill before the
Senate would repeal the itemized deduction for charitable contributions.
But because most other itemized deductions would be eliminated in exchange
for a larger standard deduction (e.g., in both bills, $24,000 for joint
filers), charitable contributions after 2017 may not yield a tax benefit
for many. If you think you will fall in this category, consider
accelerating some charitable giving into 2017.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l2 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">The House-passed bill, but not the one before the Senate,
would eliminate the itemized deduction for medical expenses. If this
deduction is indeed chopped in the final tax bill, and you are able to
claim medical expenses as an itemized deduction this year, consider
accelerating “discretionary” medical expenses into this year. For example,
order and pay for new glasses, arrange to take care of needed dental work,
or install a stair lift for a disabled person before the end of the year.<o:p></o:p></span></li>
</ul>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Other year-end strategies. Here are
some other “last minute” moves that could wind up saving tax dollars in the
event tax reform is passed:<o:p></o:p></span></div>
<br />
<ul type="disc">
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l1 level1 lfo3; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">The exercise of an incentive stock option (ISO) can
result in AMT complications. But both the Senate and House versions of the
tax reform bill call for the AMT to be repealed next year. So if you hold
any ISOs, it may be wise to hold off exercising them until next year.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l1 level1 lfo3; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">If you've got your eye on a plug-in electric vehicle,
buying one before year-end could yield you an up-to-$7,500 discount in the
form of a tax credit. The House-passed bill, but not the one before the
Senate, would eliminate this credit after 2017.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l1 level1 lfo3; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">If you're in the process of selling your principal
residence and you wrap up the sale before year end, up to $250,000 of your
profit ($500,000 for certain joint filers) will be tax-free if you owned
and used the property as your main home for at least two of the five years
before the sale. However, under the House-passed bill and the bill before
the Senate, the $250,000/$500,000 tax free amounts would apply to
post-2017 sales only if you own and use the property as your main home for
five out of the previous eight years.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l1 level1 lfo3; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Under current rules, alimony payments generally are an
above-the line deduction for the payor and included in the income of the
payee. Under the House-passed tax bill but not the version before the
Senate, alimony payments would not be deductible by the payor or
includible in the income of the payee, generally effective for any divorce
decree or separation agreement executed after 2017. So if you're in the
middle of a divorce or separation agreement, and you'll wind up on the
paying end, it would be worth your while to wrap things up before year end
if the House-passed bill carries the day. On the other hand, if you'll
wind up on the receiving end, it would be worth your while to wrap things
up next year.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: normal; margin: 0in 0in 10pt; mso-list: l1 level1 lfo3; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Both the House-passed bill and the version before the
Senate would repeal the deduction for moving expenses after 2017 (except
for certain members of the Armed Forces), so if you're about to embark on
a job-related move, try to incur your deductible moving expenses before
year-end.<o:p></o:p></span></li>
</ul>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Please keep in mind that I've
described only some of the year-end moves that should be considered in light of
the tax reform package currently before Congress—which, it bears emphasizing,
may or may not actually become law. If you would like more details about any
aspect of how the proposed legislation may affect you, please do not hesitate
to call.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Very truly yours,</span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Shawn</span></div>
Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-51298271709499622412017-10-03T08:06:00.001-04:002017-10-03T08:06:28.889-04:00President Trump signs Disaster Relief bill into law.<div style="-webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%; color: #252525; font-family: Arial, Helvetica, sans-serif; font-size: 13px; margin-bottom: 1.1em; margin-top: 1.1em;">
On September 29, President Trump signed into law H.R. 3823, the “Disaster Tax Relief and Airport and Airway Extension Act of 2017,” which reauthorizes the Federal Aviation Administration (FAA) for six months and delivers temporary tax relief to the victims of Hurricanes Harvey, Irma, and Maria. One day earlier, on September 28, the House had passed the measure by a vote of 264 to 155; the Senate had then passed the bill by voice vote, with an amendment striking a provision on the development of a private flood insurance market; and the House, by voice vote, had again passed the bill, as amended. </div>
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Tax provisions in the bill make it easier for people with hurricane losses to write them off on their taxes, eliminating a requirement that personal losses must exceed 10% of adjusted gross income to qualify for a deduction. It also gives hurricane victims penalty-free access to retirement funds and temporarily suspends limitations on the deduction for charitable contributions made before year-end for hurricane relief.</div>
Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-29943966793390675602017-09-01T10:10:00.001-04:002017-09-01T10:10:55.699-04:00COLLIER 'BED TAX' INCREASES TODAY<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Collier County’s tourist development tax, also known as the bed tax, increases from 4 to 5 percent effective today, according to a news release from the <a href="http://email.robly.com/mpss/c/-AA/CuQcAA/t.2ad/AH7fSXhPS9aeFmyrQuzidA/h13/1HagJkhbFIzDET6-2FQJpvqB8lbNytc43CYOngmobjIUA-3D" style="text-decoration: none;">Naples, Marco Island, Everglades Convention and Visitors Bureau</a>. The formula for how those funds are allocated now shifts to accommodate payments for the county’s planned amateur sports complex along with increased funds for beach renourishment, funding county museums up to a fixed amount, and maintaining the current level of funding for tourism marketing and promotion. That brings the total tax paid on hotel rooms, campgrounds and short-term vacation rentals to 11 percent when combined with the existing six percent sales tax. A room rate of $200 per night would increase from $220 to $222 with both the tourist and sales taxes applied. It is the responsibility of owners and rental agents to collect a tourist tax on all accommodations that are rented for six months or less. Any property owner or agent with questions should call (239) 252-TTAX (8829), or email <a href="mailto:toursttax@colliertax.com" dir="ltr" x-apple-data-detectors="true" x-apple-data-detectors-type="link" x-apple-data-detectors-result="8" style="text-decoration: none;">toursttax@colliertax.com</a>.</span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-69792292383960033502017-07-21T07:59:00.000-04:002017-07-21T07:59:23.023-04:00Summer Client Letter
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<i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">Dear Client:</span></i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;"><o:p></o:p></span></div>
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<span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">The following is a summary of important tax developments that
have occurred in the past three months that may affect you, your family, your
investments, and your livelihood. Please call us for more information about any
of these developments and what steps you should implement to take advantage of
favorable developments and to minimize the impact of those that are
unfavorable.<o:p></o:p></span></div>
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<i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">Healthcare bill moves through Congress.</span></i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;"> On May 4, the House of Representatives passed along
party lines the American Health Care Act (AHCA), the Republican plan to repeal
and replace the Affordable Care Act (ACA, also known as Obamacare), as amended.
The House-passed bill would need to be reconciled with the Senate's version of
health reform legislation.<o:p></o:p></span></div>
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<span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">The AHCA would repeal virtually all of the ACA tax provisions,
including the following. (Except as otherwise provided, the repeal would go
into effect in 2017).<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif; mso-fareast-font-family: sans-serif;"><span style="mso-list: Ignore;"> <span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">. . . The penalty on individuals who don't carry
adequate insurance, retroactively effective beginning in 2016.<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif; mso-fareast-font-family: sans-serif;"><span style="mso-list: Ignore;"> <span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">. . . The employer shared responsibility penalty
(i.e., the penalty that applies to certain employers who don't offer health
care coverage for its full-time employees, or offers minimum essential coverage
that is unaffordable or does not provide minimum value). The repeal would be
retroactively effective beginning in 2016.<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif; mso-fareast-font-family: sans-serif;"><span style="mso-list: Ignore;"> <span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">. . . The premium tax credit that makes health
insurance premiums more affordable for certain low-income taxpayers. The repeal
would be effective in 2020 (and a modified, age-based tax credit would be
provided pending its repeal).<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif; mso-fareast-font-family: sans-serif;"><span style="mso-list: Ignore;"> <span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">. . . The 3.8% net investment income tax (NIIT) on
certain higher income individuals.<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif; mso-fareast-font-family: sans-serif;"><span style="mso-list: Ignore;"> <span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">. . . The 0.9% additional Medicare tax on certain
higher income individuals, effective 2023.<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif; mso-fareast-font-family: sans-serif;"><span style="mso-list: Ignore;"> <span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">. . . The higher floor beneath medical expense
deductions. Under current law, the floor is 10% (effective in 2013 for
taxpayers under age 65 and in 2017 for taxpayers 65 and older). The AHCA would
reduce the floor to 5.8% for all taxpayers beginning in 2017.<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif; mso-fareast-font-family: sans-serif;"><span style="mso-list: Ignore;"> <span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">. . . The small employer health insurance credit,
effective 2020.<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif; mso-fareast-font-family: sans-serif;"><span style="mso-list: Ignore;"> <span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">. . . The dollar limitation (currently $2,700) on
health Flexible Spending Account (FSA) contributions.<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif; mso-fareast-font-family: sans-serif;"><span style="mso-list: Ignore;"> <span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">. . . The disallowance of any deduction for
compensation in excess of $500,000 for certain health insurance executives.<o:p></o:p></span></div>
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<span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">The 40% excise tax (the so-called "Cadillac" tax) on
high cost employer-sponsored health plans, would be delayed until 2026, but
would not be repealed.<o:p></o:p></span></div>
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<span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">On July 13, the Senate leadership released its healthcare draft
bill, the Better Care Reconciliation Act of 2017 (BCRA), as amended, for
consideration. It left many of the provisions of the House-passed bill intact,
but notably retained the ACA's premium tax credit, albeit in modified form. and
did not call for the repeal of the ACA's 3.8% NIIT, the 0.9% additional
Medicare tax, or the disallowance of any deduction for compensation in excess
of $500,000 for certain health insurance executives.<o:p></o:p></span></div>
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<i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">Still time to make expensing election on amended returns.</span></i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;"> The tax law's expensing rules allow a business to
elect to currently deduct the cost of business machinery and equipment-up to a
dollar limit-instead of recovering its cost via depreciation over a number of
years. The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) made
a number of important improvements to the expensing break. The main changes
were that the $500,000 annual expensing limitation and $2 million investment
ceiling amount were retroactively extended and made permanent (they were to
have expired after 2014). Additionally, the PATH Act made the following changes
to the expensing break, effective after 2015: the $500,000 annual expensing
limitation and $2 million investment ceiling amount was made subject to
inflation indexing; expensing of qualified real property was made permanent
without a complex carryover limitation that applied under prior law; the
$250,000 expensing limitation that applied to qualifying real property under
prior law was eliminated; and certain air conditioning and heating units became
newly eligible for expensing.<o:p></o:p></span></div>
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<span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">Noting that there has been taxpayer confusion about making an
expensing election for tax years that begin after 2014, the IRS announced that,
for any tax year that begins after 2014, a taxpayer may make an expensing
election for any expensing-eligible property without the IRS's consent on an
amended Federal tax return for the tax year in which the taxpayer places in
service the expensing-eligible property.<o:p></o:p></span></div>
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<i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">IRS releases next year's inflation adjustments for health
savings accounts (HSAs).</span></i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">
Eligible individuals may, subject to statutory limits, make deductible
contributions to an HSA. Employers, as well as other persons (e.g., family
members), also may contribute on behalf of an eligible individual. A person is
an "eligible individual" if he is covered under a high deductible
health plan (HDHP) and is not covered under any other health plan that is not a
HDHP, unless the other coverage is permitted insurance (e.g., for worker's
compensation, a specified disease or illness, or providing a fixed payment for
hospitalization).<o:p></o:p></span></div>
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<span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">The IRS has released the annual inflation-adjusted contribution,
deductible, and out-of-pocket expense limits for 2018 for HSAs. For calendar
year 2018, the limitation on deductions is $3,450 (up from $3,400 for 2017) for
an individual with self-only coverage. It's $6,900 (up from $6,750 for 2017)
for an individual with family coverage under a HDHP. Each of these amounts is
increased by $1,000 if the eligible individual is age 55 or older. For calendar
year 2018, an HDHP is a health plan with an annual deductible that is not less
than $1,350 (up from $1,300 for 2017) for self-only coverage or $2,700 (up from
$2,600 for 2017) for family coverage, and with respect to which the annual
out-of-pocket expenses (deductibles, co-payments, and other amounts, but not
premiums) do not exceed $6,650 (up from $6,550 for 2017) for self-only coverage
or $13,300 for family coverage (up from $13,100 for 2017).<o:p></o:p></span></div>
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<i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">IRS's private debt collection program kicks off.</span></i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;"> IRS announced that beginning in April, 2017, it
would start sending letters to notify "a relatively small group of
individuals" with overdue federal tax that their accounts had been
assigned to one of four private collection agencies (PCAs). The assignments
were authorized by legislation enacted in 2014. PCAs are authorized to discuss
payment options, including setting up payment agreements with taxpayers. But,
as with cases assigned to IRS employees, any tax payment must be made, either
electronically or by check, to the IRS. The IRS also warned taxpayers to be
wary of scammers posing as PCAs and to keep in mind that a legitimate PCA will
only be calling about a tax debt that the person has had-and has been aware
of-for years and had been contacted about previously in the past by IRS.<o:p></o:p></span></div>
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<i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">Reissued proposed regulations explain new partnership uniform
audit rules.</span></i><span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;"> A law
enacted in 2015 (The Bipartisan Budget Act of 2015, signed into law on Nov. 2,
2015) eliminated the TEFRA unified partnership audit rules (so-called because
they were introduced in the Tax Equity And Fiscal Responsibility Act of '82)
and the electing large partnership rules, and replaced them with streamlined
partnership audit rules. Under the new centralized partnership audit regime,
any adjustment to items of income, gain, loss, deduction, or credit of a
partnership for a partnership tax year (and any partner's distributive share
thereof) generally is determined, and any tax attributable thereto is assessed
and collected, at the partnership level. The applicability of any penalty,
addition to tax, or additional amount which relates to an adjustment to any
such item or share is also be determined at the partnership level. The new
rules generally are effective for returns filed for partnership tax years
beginning after Dec. 31, 2017, but taxpayers can elect to apply them earlier.
Additionally, certain small partnerships can elect out of the new partnership
regime.<o:p></o:p></span></div>
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<span style="color: #252525; font-family: sans-serif; font-size: 10pt; line-height: 165%; mso-bidi-font-family: sans-serif;">Proposed regulations on the new partnership uniform audit rules
were issued in January of this year, but were withdrawn by the IRS for further
review and approval after President Trump instituted a "regulatory
freeze." Now the IRS has reissued the proposed regulations explaining the
new partnership uniform audit rules. These regulations would have a substantial
impact on affected partnerships.<o:p></o:p></span></div>
Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-34311045964672169002017-07-03T10:50:00.001-04:002017-07-03T10:54:44.590-04:00New 5.8% Rate on Florida Commercial Rents' Sales TaxBeginning July 1, 2017, commercial rents billed and paid after July 1, 2017 for commercial properties located in Florida, will be taxed at a rate of 5.8%. Any billed but not received rents, including billings for occupancy prior to June 30, 2017 must collect and remit at 6% rate. Taxpayers must file a return to qualify for the reduced tax rate.Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-31342139348080271272017-06-21T05:55:00.001-04:002017-06-21T05:55:50.924-04:00IRS Warns of New Phone Scam<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">The IRS warns of a new scam linked to the Electronic Federal Tax Payment System (EFTPS), in which fraudsters call to claim that certified letters were sent but undeliverable and to demand an immediate tax payment through a prepaid debit card. The scam is being reported across the country. The IRS reminds taxpayers that it never demands immediate payment of taxes due with one specified method. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.</span>Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0tag:blogger.com,1999:blog-576810066222497681.post-36224171098840300922017-04-14T12:06:00.005-04:002017-04-14T12:06:45.018-04:00No Medical Deduction for Same-sex Partner's In Vitro Fertilization (IVF) Costs
<br />
The taxpayer and his same-sex partner attempted to have a child through an
IVF process with an unrelated gestational surrogate. The taxpayer paid
approximately $57,000 for the IVF process, which he sought to deduct as medical
expenses on his tax return. After the IRS disallowed the claimed deduction, the
taxpayer pursued an internal IRS appeal and, upon receiving an adverse ruling,
filed a lawsuit. The district court agreed with the IRS that the IVF costs were
not deductible medical expenses under IRC Sec. 213 because they were not
incurred for the medical care of the taxpayer, his spouse, or a dependent.
Furthermore, the IVF costs didn't qualify as medical care under IRC Sec. 213
because they were neither for diagnosis, cure, mitigation, treatment,
prevention of disease, nor to affect any bodily structure or function of the
taxpayer. <em>Joseph F. Morrissey, </em>119 AFTR 2d 2017-401 (D.C. FL).<a href="https://www.blogger.com/null" name="PPCFMTB:81116.1"></a><br />
Shawn M. Williams, CPAhttp://www.blogger.com/profile/10296896512125113332noreply@blogger.com0