ASAP: Taxpayers should check withholding

NSTPInternal Revenue Service (IRS), Paycheck Checkup

ASAP: Taxpayers Should Check Withholding

ASAP: Taxpayers should check withholding All taxpayers should check their withholding – also known as doing a Paycheck Checkup – as soon as possible. They should do a checkup even if they did one last year. By checking their withholding, taxpayers can make sure enough is being taken out of their paychecks or other income to cover the tax owed. Here are some things taxpayers should know about withholding and why checking it is important: Taxpayers should check their withholding as early in the year as possible. If someone still has not done a Paycheck Checkup, there’s still time to get their withholding on track. They should do a checkup ASAP. Taxpayers should also check their withholding when life changes occur. These changes include things like: Marriage or divorce Birth or adoption of a child Purchase of a home Retirement Chapter 11 bankruptcy New job or loss of job Some taxable income is not subject to withholding. People with this income who also have income from a job may want to adjust the amount of tax their employer withholds from their paycheck. This includes income from things like: Interest Dividends Capital gains Self-employment and gig economy income IRA distributions, including … Read More

IRS Expands §199A FAQs

NSTP199A, Internal Revenue Service (IRS)

IRS Expands Section 199A FAQs

IRS expands §199A FAQs. The IRS has published an updated set of frequently asked questions (FAQs) on their website related to the §199A qualified business income deduction. The April 11, 2019 update expanded the FAQ from 12 questions to 33 and saved what many will see as the bombshell for the last question. Many of the answers will not be surprising at all to most practitioners. One will likely cause some who had elected to use the proposed regulations to question whether that accomplished what they though it did, but the IRS position is one that many commentators had already suggested might be the position. And one update may affect a large number of taxpayers, as the author of the FAQ has written that the language of §199A(c)(3)(A) allows the IRS to force a double deduction for an S corporation shareholder’s self-employed health insurance deduction. The most surprising answer for many is found in question and answer 33, which provides: Q33. Health insurance premiums paid by an S-Corporation for greater than 2% shareholders reduce qualified business income (QBI) at the entity level by reducing the ordinary income used to compute allocable QBI. If I take the self-employed health insurance deduction … Read More

GAO Releases Report on IRS Cybersecurity Oversight

NSTPInternal Revenue Service (IRS), Security

GAO Releases Report on IRS Cybersecurity Oversight

GAO Releases Report on IRS Cybersecurity Oversight The Government Accountability Office (GAO) released a report, produced for the IRS, regarding safety concerns over third-party tools used to file taxes, as well as a series of recommendations. It is estimated that 90% of people use commercial software, like TurboTax, free file options like CreditKarma, or paid preparers to file their taxes. In the event of a cybersecurity event involving any of these platforms (or tax and accounting professionals) an individual's personal information could be accessed and stolen. In the report highlights, the GAO summarizes the concern: "IRS seeks to help safeguard electronic tax return filing for various types of third-party providers through requirements under its Authorized e-file Provider program. However, IRS's efforts do not provide assurance that taxpayers' information is being adequately protected." Federal law requires that the IRS protect the integrity and confidentiality of a taxpayer's information within its databases. However, the IRS does not currently have a consistent set of security requirements for software, preparer, or online, return preparation, that requires the same protections. GAO's report, Taxpayer Information: IRS Needs to Improve Oversight of Third-Party Cybersecurity Practices addresses the issue in greater depth and proposes steps that the IRS … Read More

IRS Re: Disclosure to Spouses Who Filed Joint Returns and then Divorced or Separated

NSTPInternal Revenue Service (IRS), Taxpayer

Disclosure to Apouses Who Filed Joint Returns and then Divorced or Separated

IRS’s Small Business/Self-Employed Division has issued guidance to its employees regarding what collection activity information can and cannot be disclosed with respect to a couple’s joint return, where the couple has subsequently divorced or are separated and no longer reside in the same household. (IRS Memo SBSE-05-0419-0010; Interim Guidance on Disclosure of Collection Activities on Joint Returns for Divorced or Separated Spouses) Background. If any tax deficiency with respect to a joint return is assessed, the couple are no longer married or no longer reside in the same household, and either joint filer makes a request in writing, IRS must disclose in writing to the individual making the request whether it has tried to collect the deficiency from the other filer, the general nature of those collection activities, and the amount collected. (Code Sec. 6103(e)(8)) IRS guidance to its employees . Upon receipt of either a verbal or written request from a taxpayer or his authorized representative, IRS may disclose limited information related to the collection of the tax from the other individual with whom the taxpayer filed a joint return when the taxpayer and the other individual are no longer married or are separated and no longer reside in … Read More

IRS Invites Public Comment on Recommendations for 2019-2020 Priority Guidance Plan

NSTPInternal Revenue Service (IRS)

Public Comment Invited on Recommendations for 2019-2020 Priority Guidance Plan

The Treasury Department and the IRS invite public comment on recommendations for items that should be included on the 2019-2020 Priority Guidance Plan. The Treasury Department’s Office of Tax Policy and the IRS use the Priority Guidance Plan each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The 2019-2020 Priority Guidance Plan will identify guidance projects that the Treasury Department and the IRS intend to actively work on as priorities during the period from July 1, 2019, through June 30, 2020. The Treasury Department and the IRS recognize the importance of public input in formulating a Priority Guidance Plan that focuses resources on guidance items that are most important to taxpayers and tax administration. Published guidance plays an important role in increasing voluntary compliance by helping to clarify ambiguous areas of the tax law. The published guidance process is most successful if the Treasury Department and the IRS have the benefit of the experience and knowledge of taxpayers and practitioners who must apply the rules implementing the tax laws. On December 22, 2017, P.L. 115-97, “An Act to provide for the reconciliation pursuant to … Read More

Get 2019 Withholding Right with Paycheck Checkup and 2018 Return

NSTPInternal Revenue Service (IRS), Underestimated Income Tax

USE 2018 Return and Paycheck Checkup to Get 2019 Withholding Right

The following was issued by the IRS to taxpayers in order to promote the Paycheck Checkup for 2019. The IRS continues to advocate that all employees verify their withholding to determine if they have sufficient taxes withheld. The Service is also in the process of redesigning the Form W4, which will be available as a pre-release in May for comments from the tax professional community. Millions of taxpayers filed a 2018 tax return in the last few weeks, making now a prime time for everyone to consider whether their tax situation came out as they expected. If it didn’t, they can use their recently finished 2018 return and the IRS Withholding Calculator to do a Paycheck Checkup and adjust their withholding. Checking and then adjusting their tax withholding can help make sure they don’t owe more tax than they are expecting. Usually they can also avoid a surprise tax bill and possibly a penalty when they file next year. At the same time, with the average refund more than $2,700, some taxpayers may choose to reduce their withholding to have a larger paycheck and smaller refund. Now is an ideal time to check withholding, since having a completed tax return … Read More