The Internal Revenue Service has announced that the nation’s tax season will begin Monday, January 29, 2018 and reminded taxpayers claiming certain tax credits that refunds won’t be available before late February. The IRS will begin accepting tax returns on January 29, with nearly 155 million individual tax returns expected to be filed in 2018. The nation’s tax deadline will be April 17 this year – so taxpayers will have two additional days to file beyond April 15. Many software companies and tax professionals will be accepting tax returns before January 29 and then will submit the returns when IRS systems open. Although the IRS will begin accepting both electronic and paper tax returns January 29, paper returns will begin processing later in mid-February as system updates continue. The IRS strongly encourages people to file their tax returns electronically for faster refunds. The IRS set the January 29 opening date to ensure the security and readiness of key tax processing systems in advance of the opening and to assess the potential impact of tax legislation on 2017 tax returns. The IRS reminds taxpayers that, by law, the IRS cannot issue refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child … Read More
Register now for the Federal Tax Update Seminar in Las Vegas on January 8th and 9th to get the newest on the tax bill going into effect January 1, 2018. We will also cover other timely topics for the tax professional as you prepare 2017 tax returns for your clients and plan for the 2018 tax changes.
For those interested in running a few ‘what-if’ scenarios based on the provisions of the new tax bill following are some calculators available online that attempt to make some projections. Since taxes are so personal, it’s hard to say specifically. But several websites have published calculators that give us a rough idea of where our taxes will stand now that the new tax bill is law. Here are some places you can check out what you’re 2018 tax bill, due when you file your not-postcard-sized return in 2019. Three of the sites provide standard-type calculators where you enter in your expected income, some details about your personal situation and then hit enter to get an idea of your taxes. They are: MarketWatch, CNN Politics and CalcXML. Two other tax bill estimators are in graphical form. They are the ones created by the New York Times‘ Upshot column and the Washington Post. Remember, all these calculators will provide you only a general idea of what your taxes might be in the coming years that H.R. 1 is in effect. I noticed that none of them had a place for investment earnings, which are and will remain taxed at lower capital gains rates. And the Post’s graphic … Read More
The Internal Revenue Service is advising tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances. 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. The following examples illustrate these points. Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A 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 due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a … Read More
To encourage non-credentialed return preparers to participate in the Annual Filing Season Program, the IRS is sending emails to about 5,000 people this week who are within 3 hours or less of having enough continuing education (CE) to participate for 2018. They must get the remaining CE by December 31. There are two versions of the email depending on whether the preparer is in the 15 or 18 hours category. Following is a sample of the email. In addition, there are a significant number of preparers who have obtained enough CE to participate, but who have not completed their Circular 230 consent in order to officially participate and receive the Annual Filing Season Program Record of Completion. IRS sends a monthly email reminding them to take this step. Even though CE is due by December 31, 2017, preparers have until April 18, 2017, to sign the consent. Our records indicate you need three or less hours of continuing education by December 31, 2017, to be eligible for the Internal Revenue Service’s 2018 Annual Filing Season Program. Don’t miss the deadline! You must have a total of 15 hours of continuing education from IRS-Approved CE Providers in the following categories to participate in the 2018 … Read More
Following are some of the provisions of the Tax Cuts and Jobs Act. For a complete report of the Conference Committee final tax provisions click here. Corporate Tax Rate: the Conference Committee settled on a corporate tax rate of 21%, considerably lower than the current maximum rate of 35%. The rate would take effect in 2018. Individual Tax Rates: the highest rate would drop from the current 39.6% to 37%, however, they retained the seven tax brackets. Higher standard deduction but personal exemption eliminated: the bill would double the standard deduction from $6,350 (single) and $12,799 (joint) to $12,000 and $24,000 which is expected to lower the number of taxpayers who itemize. At the same time, the bill would eliminate the personal exemption, but some credits were also increased. State and local taxes: taxpayers would be able to deduct up to $10,000 of all taxes combined for state and local taxes, real estate taxes, and income and sales taxes. Mortgages indebtedness: interest can be deducted on loans up to $750,000. Resolution on pass-through entities: owners of pass-through entities such as S corporations and partnerships would be able to apply a 20% deduction to their business income, with limits starting at around … Read More