In the past, parents often used tax-favored Section 529 plans to build up funds for the college education of their children.
With more than 2 million Individual Taxpayer Identification Numbers (ITINs) set to expire at the end of 2018, the Internal Revenue Service today urged affected taxpayers to submit their renewal applications soon to beat the rush and avoid refund delays next year. In the third year of the renewal program, the IRS has increased staffing to handle the anticipated influx of W-7 applications for renewal. This third wave of expiring ITINs is expected to affect as many as 2.7 million taxpayers. To help taxpayers, the renewal process for 2019 is beginning earlier than last year. “Even though the April tax deadline has passed, the IRS encourages people affected by these ITIN changes to take steps as soon as possible to prepare for next year’s tax returns,” said Acting IRS Commissioner David Kautter. “Acting now to renew ITIN numbers will help taxpayers avoid delays that could affect their tax filing and refunds in 2019. The IRS appreciates the help from partner groups across the nation sharing this information with those with expiring ITIN numbers.” Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal tax return at least once in the last three … Read More
Friday, June 15, 2018 is the deadline for filing 2017 returns for U.S. citizens and resident aliens whose tax home and abode are outside the U.S. and Puerto Rico, certain military personnel, and partnerships and corporations with certain foreign connections. More specifically, an extension of time for filing income tax returns and for paying any tax shown on the return is automatically granted up to the 15th day of the sixth month following the close of the tax year to: Partnerships which keep their records and books of account outside the U.S. and Puerto Rico and are otherwise required to file returns on the 15th day of the third month following the close of the tax year; (Reg § 1.6081-5T(a)(1)) Domestic corporations which transact their business and keep their records and books of account outside the U.S. or Puerto Rico; (Reg § 1.6081-5(a)(2)) Foreign corporations which maintain an office or place of business in the U.S.; (Reg § 1.6081-5(a)(3)) Domestic corporations whose principal income is from sources within U.S. possessions; (Reg § 1.6081-5(a)(4)) U.S. citizens or residents whose tax homes and abodes, in a “real and substantial sense”, are outside the U.S. and Puerto Rico; (Reg § 1.6081-5(a)(5)) and U.S. citizens … Read More
The IRS and its state and industry Security Summit partners have issued a new warning to tax practitioners to beware of phishing emails posing as state accounting and professional associations. Last week, the IRS received reports from tax professionals who received fake emails that were trying to trick them into disclosing their email usernames and passwords. Cybercriminals specifically targeted tax professionals in Iowa, Illinois, New Jersey and North Carolina. The IRS also received reports about a Canadian accounting association. The awkwardly worded phishing email states: “We kindly request that you follow this link HERE and sign in with your email to view this information from (name of accounting association) to all active members. This announcement has been updated for your kind information through our secure information sharing portal which is linked to your email server.” Tax practitioners nationwide should be on guard because cybercriminals can easily change their tactics, using other association names or making other adjustments in their scam attempts. Tax practitioners who are members of professional associations should go directly to those associations’ websites rather than open any links or attachments. Tax practitioners who receive suspicious emails related to taxes or the IRS, or phishing attempts to … Read More
On Thursday evening May 24, 2018, NSTP’s Director of Education, Paul La Monaca, CPA, MST, attended an invitation only event at The American University in Washington, D.C. The event featured Acting Commissioner Dave Kautter, who also holds the position of Assistant Secretary of Tax Policy. Mr. Kautter addressed a select group of about 50 individuals invited by Professor Don Williamson, American University’s Director of the Master’s in Taxation Program and Executive Director of the Kogod Tax Policy Center. Commissioner Kautter shared his career experiences in tax, from his days with Ernst & Young, serving on Capital Hill and as the former Managing Director of the Kogod Tax Policy Center and Professor at the School of Business. The Commissioner addressed information on the recent passage of The Tax Cuts and Jobs Act and the work that is being done at the Internal Revenue Service as a result of the Legislation. The discussion was moderated by the current Managing Director of the Kogod Tax Policy Center, Caroline Bruckner who also served on Capital Hill. Others in attendance included Capital Hill Staffers involved with the Senate Finance Committee, Dean of the Kogod School of Business, current and former professors of the Kogod School and Alumni … Read More
Revenue Procedure 2018-27 provides relief for taxpayers with family coverage under high deductible health plans (HDHPs) concerning the annual deductible contributions limit for their 2018 health savings accounts (HSAs) under Internal Revenue Code section 223. The maximum for family coverage was originally issued as $6,900 on May 4, 2017. On March 2, 2018, the limit was reduced to $ 6,850 for taxpayers with family coverage under HDHPs pursuant to Tax Reform legislation that changed the calculation for 2018 and future years. This guidance allows taxpayers to continue to treat the 2018 limit as $6,900. It also provides clarifications on how taxpayers who already received a distribution from an HSA of an excess contribution based on the $6,850 deduction limit may treat the distribution as a mistake and repay the HSA without any tax or reporting consequences. It also clarifies how to treat a distribution of an excess contribution (and earnings) based on the $6,850 deduction limit.