• All of Georgia Now Eligible for Disaster Tax Relief

    WASHINGTON — Hurricane Irma victims in the entire state of Georgia now have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.

    This includes an additional filing extension for taxpayers with valid extensions that run out on Oct. 16, and businesses with extensions that ran out on Sept. 15. It parallels relief previously granted to Irma victims throughout Florida and in parts of Puerto Rico and the Virgin Islands, and Harvey victims in parts of Texas.

    For taxpayers in Georgia, this relief postpones various tax filing and payment deadlines that occurred starting on Sept. 7, 2017. As a result, affected individuals and businesses will have until Jan. 31, 2018, to file returns and pay any taxes that were originally due during this period.

    This includes the Sept. 15, 2017 and Jan. 16, 2018 deadlines for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

    A variety of business tax deadlines are also affected including the Oct. 31 deadline for quarterly payroll and excise tax returns. Businesses with extensions also have the additional time including, among others, calendar-year partnerships whose 2016 extensions ran out on Sept. 15, 2017 and calendar-year tax-exempt organizations whose 2016 extensions run out on Nov. 15, 2017. The disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

    In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due during the first 15 days of the disaster period. Check out the disaster relief page for the time periods that apply to each jurisdiction.

    The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

    In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. It also includes tax professionals who, due to the disaster, are unable to meet a tax-filing or payment deadline for their clients who live or are located outside the disaster area.

    Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year), or the return for the prior year (2016). See Publication 547 for details.

  • IRS Gives Tax Relief to Victims of Hurricane Irma

    IRS Gives Tax Relief to Victims of Hurricane Irma; Like Harvey, Extension Filers Have Until Jan. 31 to File; Additional Relief Planned

    WASHINGTON –– Hurricane Irma victims in parts of Florida and elsewhere have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.

    Today’s relief parallels that granted last month to victims of Hurricane Harvey. This includes an additional filing extension for taxpayers with valid extensions that run out on Oct. 16, and businesses with extensions that run out on Sept. 15.

    “This has been a devastating storm for the Southeastern part of the country, and the IRS will move quickly to provide tax relief for victims, just as we did following Hurricane Harvey,” said IRS Commissioner John Koskinen. “The IRS will continue to closely monitor the storm’s aftermath, and we anticipate providing additional relief for other affected areas in the near future.”

    The IRS is offering this relief to any area designated by the Federal Emergency Management Agency ( FEMA ), as qualifying for individual assistance. Parts of Florida, Puerto Rico and the Virgin Islands are currently eligible, but taxpayers in localities added later to the disaster area, including those in other states, will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

    The tax relief postpones various tax filing and payment deadlines that occurred starting on Sept. 4, 2017 in Florida and Sept. 5, 2017 in Puerto Rico and the Virgin Islands. As a result, affected individuals and businesses will have until Jan. 31, 2018, to file returns and pay any taxes that were originally due during this period.

    This includes the Sept. 15, 2017 and Jan. 16, 2018 deadlines for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

    A variety of business tax deadlines are also affected including the Oct. 31 deadline for quarterly payroll and excise tax returns. Businesses with extensions also have the additional time including, among others, calendar-year partnerships whose 2016 extensions run out on Sept. 15, 2017 and calendar-year tax-exempt organizations whose 2016 extensions run out on Nov. 15, 2017. The disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

    In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due during the first 15 days of the disaster period. Check out the disaster relief page for the time periods that apply to each jurisdiction.

    The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

    In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

    Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year), or the return for the prior year (2016). See Publication 547 for details.

    The tax relief is part of a coordinated federal response to the damage caused by severe storms and flooding and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov .

  • Now’s the time to look at your withholding

    Check Withholding Now to Avoid Surprises at Tax Time

    The federal income tax is a pay-as-you-go system. Employers generally withhold tax from workers’ wages. Taxpayers also often have taxes withheld from certain other income including pensions, bonuses, commissions and gambling winnings.

    People who do not pay tax through withholding, like the self-employed, generally pay estimated tax. In addition, those who earn income such as dividends, interest, capital gains, rent and royalties are usually required to make estimated tax payments.

    Each year, because of life events like changes to household income or family size, some people get a larger refund than they expect while others find they owe more tax.

    To prevent a tax-time surprise, the IRS offers these tips:

    • New Job. When starting a new job, an employee must fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from regular pay, bonuses, commissions and vacation allowances. The IRS Withholding Calculator tool on IRS.gov is easy for taxpayers to use to figure how much tax to withhold to avoid surprises.
    • Estimated Tax. People who have income not subject to withholding may need to pay estimated tax. Those expecting to owe $1,000 or more than taxes withheld from their wages may also need to make estimated tax payments to avoid penalties. The worksheet in Form 1040-ES, Estimated Tax for Individuals, helps to figure the tax.
    • Life Events. A change in marital status, the birth of a child or the purchase of a new home can change the amount of taxes a taxpayer owes. In most cases, an employee can submit a new Form W–4 to their employer anytime.

    As always we recommend contacting a licensed and certified accountant specializing in income taxes for any questions.

  • IRS Alerts Taxpayers with Limited English Proficiency of Ongoing Phone Scams; Urges Caution Before Paying Unexpected Tax Bills

    IRS Alerts Taxpayers with Limited English Proficiency of Ongoing Phone Scams; Urges Caution Before Paying Unexpected Tax Bills

    WASHINGTON — The Internal Revenue Service today warned taxpayers with limited English proficiency of phone scams and email phishing schemes that continue to occur across the country.

    Con artists often approach victims in their native language, threaten them with deportation, police arrest and license revocation, among other things.

    “These scammers continue to adapt and evolve, and the IRS continues to receive reports of these schemes using multiple languages trying to find victims across the country,” IRS Commissioner John Koskinen said. “Don’t be fooled. Regardless of the language being used, the IRS won’t be calling out of the blue to verify your personal tax information or threaten you to make an immediate tax payment using a specific method of payment, such as on a pre-paid debit card,” Koskinen said.

    How do scams work?

    Scammers make unsolicited calls claiming to be IRS officials, and they can use different languages besides English. They tell their victims they owe the IRS money and must pay it promptly through a preloaded debit card, gift card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls” or via a phishing email. If the victim refuses to cooperate, the caller becomes hostile and insulting and may threaten arrest, deportation or revocation of a driver’s or professional license.

    Alternately, scammers can politely begin asking taxpayers to verify their identity over the phone. They may say they have their tax return, and they just need to verify a few details to process the return. They may also tell their victims they have a refund due to trick them into sharing private information such as Social Security numbers or personal financial information, such as bank or credit cards numbers.

    These con artists can sound convincing. They use fake names and IRS identification numbers to appear legitimate. They may use the victim’s name, address and other personal information to make the call sound official. They often alter caller ID numbers to make it look like the IRS or another agency is calling.

    In recent years, thousands of people have lost millions of dollars and their personal information to tax scams and fake communication purportedly from the IRS. The IRS reminds taxpayers to guard against these cons and similar tactics, as they continually change. The IRS, states and the tax industry came together in 2015 to launch a public awareness campaign called Taxes. Security. Together. The goal is to educate taxpayers about the need to maintain their security online and to recognize and avoid different types of scams and schemes.

    How private debt collection work

    The IRS also reminded people to be on the lookout for scam artists trying to dupe taxpayers as the private debt collection program begins.

    Starting this month, a new program starts that will transfer some long-standing tax bills over to private firms. The only outside agencies authorized to contact taxpayers about their unpaid tax accounts will be one of four firms authorized under the new private debt collection program. Even then, any affected taxpayer will be notified first by the IRS, not the private collection firm.

    The private debt collection program, authorized under a federal law enacted by Congress in 2015, enables designated contractors to collect tax payments on the government’s behalf. The IRS will give taxpayers and their representative written notice when their account is being transferred to a private collection firm. The company will then send a second, separate letter to the taxpayer and their representative confirming this transfer. Information contained in these letters will help taxpayers identify the tax amount owed and help ensure that future collection calls are legitimate.

    Here are four things scammers often do but the IRS and its authorized private collection agencies will not do. Any one of these things is a telltale sign of a scam – regardless of the language used.

    The IRS and its authorized private collection agencies will never:

    · Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.

    · Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer deported or arrested for not paying.

    · Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

    · Ask for credit or debit card numbers over the phone.

    The IRS reminds non-native English speakers this tax season that they can easily identify when a caller supposedly from the IRS is a fake.

    For taxpayers who don’t owe taxes or don’t think they do :

    · Do not give out any information. Hang up immediately.

    · Contact the Treasury Inspector General for Tax Administration to report the call. Use their “ IRS Impersonation Scam Reporting ” web page. Alternatively, call 800-366-4484.

    · Report it to the Federal Trade Commission. Use the “ FTC Complaint Assistant ” on FTC.gov. Please add “IRS Telephone Scam” in the notes.

    Stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time. For more information, visit “ Tax Scams and Consumer Alerts ” on IRS.gov.

  • THE SCOOP ON UNEMPLOYMENT BENEFITS

    THE SCOOP ON UNEMPLOYMENT BENEFITS

    Taxpayers who received unemployment benefits need to remember that it may be taxable. Here are five key facts about unemployment:

    1. Unemployment is Taxable . Include all unemployment compensation as income for the year. Taxpayers should receive a Form 1099-G, Certain Government Payments, by Jan. 31. This form shows the amount received and the amount of any federal income tax withheld.
    2. There are Different Types . Unemployment compensation includes amounts paid under federal law or state law as well as railroad, trade readjustment and airline deregulation laws. Even some forms of disability payments can count.
    3. Union Benefits May be Taxable . Benefits received from regular union dues as income might be taxable. Other rules may apply if a taxpayer contributed to a special union fund and those contributions to the fund are not deductible. In this case, report only income exceeding the amount of contributions made.
    4. Tax May be Withheld . Those who receive unemployment can choose to have federal income tax withheld by using Form W-4V, Voluntary Withholding Request. Those choosing not to have tax withheld may need to make estimated tax payments during the year.
    5. Visit IRS.gov for Help . Taxpayers facing financial difficulties should visit the IRS.gov page: “What Ifs” for Struggling Taxpayers. This page explains the tax effect of various life events such as job loss. For those who owe federal taxes and can’t pay, the Payments tab on IRS.gov provides some options. In many cases, the IRS can take steps to help ease financial burden.

  • New Mileage Rates for 2017

    The IRS has released the 2017 optional standard mileage rates that employees, self employed
    individuals, and other taxpayers can use to compute deductible costs of
    operating automobiles (including vans, pickups and panel trucks) for business, medical,
    moving and charitable purposes. The updated rates are effective for deductible
    transportation expenses paid or incurred on or after January 1, 2017, and for mileage
    allowances or reimbursements paid to, or transportation expenses paid or incurred by, an
    employee or a charitable volunteer on or after January 1, 2017.

    Business mileage rate

    Beginning on January 1, 2017, the standard mileage rates for the use of a car, van, pickup
    of panel truck used in a business is:

    • 53 .5 cents per mile for business miles driven (down from 54 cents in 2016);
    • 17 cents per mile for medical and moving expenses (down from 19 cents in 2016);
    • 14 cents per mile for miles driven for charitable purposes (permanently set bystatute at 14 cents).

    Comment. The business rate had increased by 1.5 cents in 2015 and then dropped
    4 cents in 2016, while the medical and moving rates dropped slightly (by 0.5
    cents) in 2015 and then more significantly by four cents in 2016. With gas prices
    dropping and vehicle prices holding steady in 2016, when statistics for the 2017
    rates are gathered, the optional mileage rates for business expenses for 2017
    dropped to their lowest levels over five years.

    Comment. As an alternative to the optional mileage rates, taxpayers can use the actual
    expense method. Actual expenses include expenditures for gas, oil, repairs, tires,
    insurance, registration fees, licenses, and other qualified costs, including depreciation.
    Other items, however, such as parking fees and tolls may also be deductible. A taxpayer
    may not use the business standard mileage rate after using a depreciation method under
    Code Sec. 168 or after claiming the Code Sec. 179 first-year expensing deduction for that
    vehicle. A taxpayer also may not use the business rate for more than four vehicles at a
    time.

    Other amounts

    For automobiles used for business, a taxpayer must use 23 cents per mile as the portion of
    the standard mileage rate treated as depreciation for 2017 for purposes oflater
    determining any gain or loss on a subsequent sale. For prior years, these amounts are 24
    cents for 2016 and 2015; 22 cents for 2014; and 23 cents for both 2012 and 2013.
    To compute the allowance under a fixed and variable rate (FA VR) plan for 2017, the
    standard automobile cost may not exceed $27 ,900 for cars or $31,300 for trucks and vans
    (down from $28,000 for cars for 2016 but up slightly for trucks and vans from $31,000
    for 2016).

  • Scamming Alerts From the IRS

    As we approach the 2017 tax season, we want to remind everyone about “Tax Scams” that are ongoing throughout the country. If you have any questions please call our office. We will be happy to talk to you to determine if any contact from the IRS is legitimate. We are here to protect our clients.

    If it sounds too good to be true, it probably is! In recent years, thousands of people have lost millions of dollars and their personal information to tax scams and fake IRS communication. This page looks at the scams affecting individuals, businesses, and tax professionals and what do if you if you spot a tax scam.

    REMEMBER: The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. In addition, IRS does not threaten taxpayers with lawsuits, imprisonment or other enforcement action. Being able to recognize these tell-tale signs of a phishing or tax scam could save you from becoming a victim.

    Information for Taxpayers

    IRS-Impersonation Telephone Scams

    An aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.

    Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Or, victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn’t answered, the scammers often leave an “urgent” callback request.

    Note that the IRS will never:

    • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
    • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
    • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
    • Ask for credit or debit card numbers over the phone.

    Remember: Scammers Change Tactics — Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, but variations of the IRS impersonation scam continue year-round and they tend to peak when scammers find prime opportunities to strike.

  • DEADLINES ARE FAST APPROACHING

    Please remember that the deadline for Corporate Extensions is Thursday September 15, 2016. If you are a client of ours, you must have your completed tax information into our office no later than Friday September 9, 2016. Any tax information received after this date will not be ready before the September 15 deadline. The penalty for late filing for companies is $195.00 per shareholder per month.

    The Individual Extension deadline is October 17, 2016 as October 15 is a Saturday. If you are our client, we must have your tax information no later than September 23, 2016 in order for us to complete the tax return prior to the deadline. The IRS charges Individuals penalties for late filing.

  • Some Refunds Delayed in 2017

    When considering refund issues, the IRS wants taxpayers to be aware several factors could affect the timing of their tax refunds next year.

    A major change will affect some early tax filers claiming two key credits who won’t see their refunds until after Feb. 15.

    Beginning in 2017, a new law requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until mid-February. Under the change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act, the IRS must hold the entire refund – even the portion not associated with the EITC and ACTC — until at least Feb. 15. This change helps ensure that taxpayers get the refund they are owed by giving the agency more time to help detect and prevent fraud.

    As in past years, the IRS will begin accepting and processing tax returns once the filing season begins. All taxpayers should file as usual, and tax return preparers should also submit returns as they normally do. Even though the IRS cannot issue refunds for some early filers until at least Feb. 15, the IRS reminds taxpayers that most refunds will still be issued within the normal time frame: 21 days or less, after being accepted for processing by the IRS.

    ”This is an important change to be aware of for some taxpayers used to getting an early refund,” Koskinen said. “We’ll be focusing on awareness of this change throughout the fall, but it’s important for taxpayers who might be affected by this to be aware of the change for their planning purposes. Although we still expect to issue most refunds within 21 days, we don’t want people caught by surprise if they get their refund a few weeks later than previous years.”

  • What you need to know about Education Credits for 2016

    What you need to know about Education Credits for 2016

    If you pay for college in 2016, you may receive some tax savings on your federal tax return, even if you’re studying outside of the U.S. Both the American Opportunity Tax Credit and the Lifetime Learning Credit may reduce the amount of tax you owe, but only the AOTC is partially refundable.

    Here are a few things you should know about education credits:

    • American Opportunity Tax Credit – The AOTC is worth up to $2,500 per year for an eligible student. This credit is available for the first four years of higher education. Forty percent of the AOTC is refundable. That means, if you’re eligible, you can get up to $1,000 of the credit as a refund, even if you do not owe any tax.
    • Lifetime Learning Credit – The LLC is worth up to $2,000 per tax return. There is no limit on the number of years that you can claim the LLC for an eligible student.
    • Qualified expenses – You may use only qualified expenses paid to figure your credit. These expenses include the costs you pay for tuition, fees and other related expenses for an eligible student to enroll at, or attend, an eligible educational institution.
    • Eligible educational institutions – Eligible educational schools are those that offer education beyond high school. This includes most colleges and universities. Vocational schools or other postsecondary schools may also qualify. If you aren’t sure if your school is eligible:
      • Ask your school if it is an eligible educational institution, or
      • See if your school is on the U.S. Department of Education’s Accreditation database.
    • Form 1098-T – In most cases, you should receive Form 1098-T, Tuition Statement, from your school by February 1. This form reports your qualified expenses to the IRS and to you. The amounts shown on the form may be either: (1) the amount you paid for qualified tuition and related expenses, or (2) the amount that your school billed for qualified tuition and related expenses; therefore, the amounts shown on the form may be different than the amounts you actually paid. Don’t forget that you can only claim an education credit for the qualified tuition and related expenses that you paid in the tax year and not just the amount that your school billed.
    • Income limits – The education credits are subject to income limitations and may be reduced, or eliminated, based on your income.
    • Interactive Tax Assistant tool – To see if you’re eligible to claim education credits, use the Interactive Tax Assistant tool on IRS.gov.