THE COST OF CREDIT

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2017 was a bad year for the credit industry which saw several data breaches and multiple lawsuits.  However, it is becoming apparent that Americans overall are going to have a worse 2018 compared to last year as the trend of acquiring more debt increases.  Aside from having to shell out money for damages caused in 2017, the credit industry will have a very lucrative 2018 even after paying fines and settlements thanks in part to the American consumer. Factors contributing to increasing credit card debt among Americans includes more access by those considered ‘subprime borrowers,’ increased costs for food and housing and continuous spending on unnecessary items.  Based on buying patterns, we are a society which tends to live on credit to achieve the lifestyle desired. If your debt level has outpaced your savings, it may be time you take a serious look at your financial picture.  You should be decreasing your debt and increasing your savings (retirement, personal, emergency) over time.  The latest Financial Security Index Survey from Bankrate  shows the opposite is happening.  Surprisingly 17% of Americans indicated that they have no credit card debt, but also have no savings to show for it!  Americans are failing to realize that their savings need to outpace their debt.  Preparing … Read More

FBARS DUE APRIL 17, 2018, BUT FILERS WHO MISS DEADLINE GET AUTOMATIC 6-MONTH EXTENSION

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FBAR Due Date Clarification The Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department, has posted a clarification to its website regarding the due date of 2017 Reports of Foreign Bank and Financial Accounts (FBARs). While 2017 FBARs are due on April 17, filers who miss this deadline are given an automatic extension until October 15, 2018. Background. U.S. citizens and resident aliens are legally required to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers (i.e., U.S. citizens and resident aliens with worldwide income subject to the reporting rules) will need to fill out and attach Form 1040, Schedule B, Interest and Ordinary Dividends, to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located. Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds $50,000 on … Read More

DON’T RUSH TO AMEND THOSE RETURNS ALREADY IN THE SYSTEM

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With tens of millions of returns already in the system, the IRS was not prepared to react immediately to the new law, issuing the following statement about the extenders: The IRS is reviewing the legislation signed Feb. 9 that retroactively extended and modified numerous tax provisions covering 2017. We are assessing these significant changes in the tax law and beginning to determine next steps. The IRS will provide additional information as quickly as possible for affected taxpayers and the tax community. That said, there are accommodations to some of the expired provisions on the current tax forms, such as Line 34 on the Form 1040, which IRS has marked as “Reserved for future use.” That could make revising those forms easier than anticipated, so hold tight. If your client’s return has already been filed and they are expecting a refund, do not file an amended return until the refund has been received. It can delay the processing of both returns if an amended return is put into the system before the original return has been processed and the refund issued. As long a laundry list as the extenders might be, many of the provisions are quite targeted, meaning they are for a specific … Read More

TAX PREPARERS: TIPS FOR HIRING A CYBERSECURITY PROFESSIONAL

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To protect their offices and safeguard client data, tax professionals are often advised to hire a cybersecurity professional. Because every tax office is unique, preparers should consider specific concerns they have. They should present those to their cybersecurity professional, which will help safeguard both the preparer’s business and their clients’ data. The IRS provides the following four points for tax preparers to consider when evaluating and selecting a cybersecurity professional that fits their situation or business. Talk to other business owners or professionals they know and trust for recommendations and references. Ultimately a preparer or business owner will need to select the person they trust most. They should choose someone with whom they feel comfortable discussing the safety and security of their business and clients. Preparers should ask questions of the candidates to larn just how much experience they have in data protection. Here are some examples of questions tax professionals can ask: How does ransomware work and what can we do to protect our systems? What are the best options to securely back-up data and why are those options the best? Do you have suggestions regarding the following: data encryption, malware, firewalls, disaster recovery and remote access tools? Have you … Read More

7 REASONS YOU MIGHT HAVE BEEN TURNED DOWN FOR A REFUND ANTICIPATION LOAN

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From an article by Kelly Phillips Erb , FORBES STAFF Tax season officially opens on January 29, 2018, and that means that the rush to benefit from a tax refund has already started. The law now requires the Internal Revenue Service (IRS) to hold refunds tied to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until at least February 15. There may be additional delays: Factoring in weekends and the President’s Day holiday, the IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on February 27, 2018. With that in mind, some taxpayers use a tax Refund Anticipation Loan (RAL) to bridge the gap between the first of the year and mid-to-late February. But not all efforts to secure an RAL are successful. Sometimes, you’ll get turned down even if you think you’ve done everything right and even if you’ve had no problems in prior years, and you may not know why. If you’ve been turned down for a tax refund-related loan, it might have been for one of these reasons: 1. You have bad credit. Remember that an RAL is a loan. You have to repay the entire amount … Read More

Web Conference for: Tax Professionals

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Web Conference for: Tax Professionals Presented by: IRS Stakeholder Liaison Understanding Data Compromise Schemes and IRS’s Responses to Them Wednesday, February 7, 2018 11:00 a.m. Eastern, 10:00 a.m. Central, 9:00 a.m. Mountain, 8:00 a.m. Pacific, 6:00 a.m. Hawaii Thursday, February 8, 2018* 2:00 p.m. Eastern, 1:00 p.m. Central, 12:00 p.m. Mountain, 11:00 a.m. Pacific, 9:00 a.m. Hawaii This Web-Conference will cover the following: Attack vectors focusing on email Examples of email scams How fraudulent sites are constructed Common IRS- and tax-themed phishing scams Phishing scams preparers are likely to encounter How to report scams to the IRS Different ways to verify an IRS document Size and scope of tax-related ID Theft in the preparer population How criminals compromise preparer data FS2017 Identity Verification & FS2018 process improvements Plus a Live Q & A Register and Attend : Wednesday, February 7, 2018 Register & Attend: https://www.webcaster4.com/Webcast/Page/1148/24401 Thursday, February 8, 2018* Register & Attend: https://www.webcaster4.com/Webcast/Page/1148/24403 *Offered with closed captioning Continuing Education: Tax Professionals – Earn up to 2 CE Credits. Category: Federal Tax Questions? Email us at: sbse.sl.web.conference.team@irs.gov