IRS tax payment options The Internal Revenue Service today advised those now receiving tax bills because they filed on time but didn’t pay in full that there are many easy options for IRS tax payments owed. IRS tax payment options include paying online, by phone or using their mobile device. Taxpayers who can’t pay in full may consider payment plans and compromise options; the IRS wants anyone facing a tax bill to know that they have many choices available to them. If a tax return was filed but the amounts owed are unpaid, the taxpayer will receive a letter or notice in the mail from the IRS, usually within a few weeks. These notices, including CP14 and CP501, which notify taxpayers that they have a balance due, are frequently mailed during June and July. Recent major tax law changes affect most taxpayers, and while the vast majority are receiving refunds, others discovered that they owe tax this year. Many of them may qualify for a waiver of the estimated tax penalty that normally applies. See IRS Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and its instructions for details. Taxpayers are reminded to pay as much as … Read More
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
The first draft of 2020 Form W-4 has been issued and is now available for viewing and comments You can view the IRS’ early proposed design here. Comments about the 2020 Form W-4 draft are welcome and must be submitted by July 1, 2019. The agency can’t respond individually to all comments due to the large volume expected, but we do appreciate the feedback and will consider all comments received. Submit all comments to: WI.W4.Comments@IRS.gov. The IRS cannot respond to all comments due to the high volume we receive. “The new draft Form W-4 reflects important feedback from the payroll community and others in the tax community,” said IRS Commissioner Chuck Rettig. “The primary goals of the new design are to provide simplicity, accuracy and privacy for employees while minimizing burden for employers and payroll processors.” A near-final draft is expected to be released mid-to-late July. The summer release will give employers and payroll processors what they need to make system updates before the final form is released in November. The W-4 Instructions for employees are a part of this release and a separate set of instructions for employers will be available soon. The new W-4 form will better incorporate … Read More
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
The IRS has released Form 14815 — Supporting Documents to Prove the Child Tax Credit (CTC) and Credit for Other Dependents (ODC) for 2018-2025 — to help taxpayers identify what supporting documents are needed to properly claim the child tax credit and credit for other dependents under tax code Section 24, as amended by the 2017 tax act. The form notes the need to document: A taxpayer identification number; U.S. citizenship, national or resident status; Relationship status between the child/dependent and the taxpayer; Residency status; Support provided to the dependent; Whether the dependent is disabled; Whether the dependent is a student; and Whether the child is the qualifying child of more than one taxpayer. A copy of Form 14815 is available here.
IRS: Be on the lookout for promises of inflated tax refunds Taxpayers are warned to be alert to unscrupulous tax return preparers boasting of inflated tax refunds, a common scam tactic during filing season. Return preparers promising larger refunds than competitors or providing refunds substantially larger than taxpayers have routinely seen could be a warning sign. Con artists promising overly large refunds frequently prey on older Americans and low-income taxpayers and those who don’t have a filing requirement. They may also victimize non-English speakers who may or may not have a requirement to file a tax return. Scam artists can use flyers, advertisements, phony storefronts or word-of-mouth to attract victims. They may even make presentations through community groups or churches. These unscrupulous individuals may dupe others into making claims for fictitious rebates, benefits or tax credits. They may also file a false return in their client’s name, and the client never knows that a refund was paid. Cons may also target those with a filing requirement who are due a tax refund. This may be done by promising larger refunds based on fake Social Security benefits and false claims for education credits or the Earned Income Tax Credit (EITC), among … Read More