I hope you began the official celebration this week. What, you didn’t know? As of Monday, the IRS has officially started tax season. Granted, this is something I write about a lot, and with Congress passing tax reform at the end of the last year, it may seem like we have been in tax season for months, but the actual acceptance of returns only began this week. Of course, this involves lots of numbers, and one big one is that the IRS is expecting to get 155 million returns, with 70 percent of those expected to result in refunds. And last year, the average refund was $2,895. That’s a lot of money moving around, and as always, we are eager to help you get as big a piece of that as possible. And as I always preach, getting started early is one of the best ways to make this happen. By this point, you have probably received some tax forms in the mail, and most of what you have not yet seen will arrive in the next week or so. Open those envelopes, give a quick look to make sure that everything looks as it should, then keep them all together. At the same time, though, think of the other things that you need to help maximize any refund. Do you claim a home office deduction and need utility bills? Do you have some receipts for business meals that can be deducted? Overall, it is a good strategy to remember that whatever documents you used last year are worth gathering this year again. For most of us, after all, our financial situations don’t change THAT much from year to year. If your situation has changed significantly, though, you may want to schedule an early appointment for your taxes. For sure, you will know many of the forms and documents that you will need for a full return, but we can discuss your new situation and find out if there are others that will help your return look even better. But even if things are going to almost exactly like they were for you last year, wouldn’t you enjoy just getting it over with? As the IRS said, most people are expecting refunds, after all, so why not let being a little proactive get some extra money in your bank account sooner. And those refunds can come pretty quickly, too. Around 90 percent of taxpayers now file electronically, which allows most people who receive a refund to get it in less than three weeks. Though be warned that those who claim the Earned Income Tax Credit and/or the Additional Child Tax Credit are not expected to start receiving theirs until February 27. And yes, that can be a bit of a bummer for those who file early with those credits, but it’s a measure the IRS has taken to try to prevent fraud, and I suppose we have to be forgiving when it takes such actions for such reasons. But yes, we have arrived. So for those who are ready, stay on top of it. I mean, we will remain eager to help you even as we approach the April 17 deadline, but our calendar gets fuller by then, and your chances to take advantage of every deduction for which you could be eligible could decrease. Time is currently on our side, let’s use it. Warmly, Nicole Odeh Connect to Us ~ Facebook ~ Twitter
0 Comments
The beginning of tax season almost got off to a strange start with the brief government shutdown that began over the weekend. A temporary measure passed Monday kept this from becoming an extended issue, but the story is far from over.
Ahead of the shutdown, the IRS issued its “FY2018 Lapsed Appropriations Contingency Plan.” Interestingly, this did not say that tax returns would not be processed, but that they would happen, “to the extent necessary to protect Government property, which includes tax revenue, and maintain the integrity of the federal tax collection process.” What this pretty much sounds like is that the government would accept tax returns and payments, but there was nothing about refunds, and taxpayer services would be, at best, extremely limited. . The plan estimated that only about 43 percent of the IRS’s staff would be retained in the event of having no funding. That comes on the heels of the IRS stating that it would need increased funding just for the implementation of the recent Tax Cuts and Jobs Act. Of course, this also happens in the shadow of almost a decade of financial cuts for the agency that have resulted in fewer audits and longer wait times for those who need to contact the IRS. Congress’s actions Monday kept all this from becoming an immediate issue, but it only covered funding for the government for a few weeks. Granted, things may work themselves out over that time, but that is clearly no sure thing. So what does this mean for tax filing? First, if you are ready to go forward, there seem to be good reasons to not procrastinate filing your taxes The IRS is slated to begin accepting returns on Monday, January 29, and in a time of uncertainty, there could be some comfort in knowing that your obligations have already been taken care of. Second, though, this also becomes a good time to pass along a reminder that if your return claims the Earned Income Tax Credit or Additional Child Tax Credit, any refund could be delayed. In an effort to combat fraud, the IRS expects to hold such refunds until the week of February 27th at the earliest. This includes the entire refund, and not just the portion associated with the credits, and this will be the case no matter how any potential government shutdowns play out. Finally, do not overlook what the IRS said that it for sure would still do, and that is protecting the government’s tax revenue. No matter where things go, the federal government is still going to expect your tax return and any payment it is due by the April 17th deadline. Even if we enter a scenario where there is a huge backlog of tax returns that need to be processed, the IRS is going to note when you filed the return, not when it was processed, when it comes to any potential penalties. Also, rest assured that we remain ready to ramp up our efforts throughout tax season. We will not be shutting down and instead will be standing by you no matter where the path leads. Warmly, Nicole Odeh Connect to Us ~ Facebook ~ Twitter The fallout from the Tax Cuts and Jobs Acts continues. Hopefully it will ease enough that I can write about something else next week. But for this week …
First, came the release of the 2017 Annual Report to Congress from National Taxpayer Advocate Nina E. Olson. The most interesting part of this may have been concerns expressed about how the IRS would be able to implement all the new rules. That struggle is connected to the reductions in IRS funding that have been coming throughout the past decade or so. I have written about this in the past, and how it has resulted in a decrease in the number of audits. Granted, this sounds like good news, but just ask anyone who has had business with the IRS (or had to face one of those audits) that required talking to an actual person with the organization and how difficult it was to reach one. With the partisan bickering and then wondering what the fallout would mean for one’s individual taxes, it is not a real surprise that no one really worried too much about how the new rules would affect the IRS itself. It is not as if anyone holds too much sympathy for the organization anyway. If they are already having issues carrying out the agency’s business, though, it is easy to understand how a set of new rules would further hurt its efficiency. This feels much like how things were in the wake of the passage of the Affordable Care Act. We all knew that tax credits were going to be involved, and reporting on if one had health insurance would become part of a tax return, but it all felt a little too much up in the air before it came time to actually file. We got through that time, though, and we will get through this one. It just appears that it really will take more than a year to fully appreciate how this will all shake out. The second thing to report, though, is that some of these things are starting to shake themselves out already, as the IRS has updated its income withholding rates to reflect the new standards. This means that many people could see a little more money in their paycheck over the next few weeks. Without getting into deep numbers, what this means is what is being withheld in your paycheck is being adjusted so that your tax return will look similar when it comes time to file for the 2018 year. If you have set your withholding to come out even at the end of the year, it still will. If you set it to receive a refund, chances are good you will still receive one. While all this stuff is at the front of our minds, though, it might be time to think about adjusting your withholding. Granted everyone loves that refund, but everyone also loves a little more money in every paycheck. With the new rules already possibly putting a little extra in there, altering your withholding could add a little more. Combined, maybe you could make some moves that you did not have the chance to a couple of months ago that you will feel better about in the long run rather than waiting for a refund in 14 months or so. Often throughout the year when I write about taxes, I know that many people don’t really want to hear about such things. I keep doing it, though, because I know that if I bring up topics that someone is worried about, we can help them. It may not be for everyone, but it is very important for someone. Lately, however, it seems that everyone is thinking and talking about taxes.
I can thank Congress for that as it passed the Tax Cuts and Jobs Act at the end of last year, just before people have to start thinking about taxes as we enter filing season. That combination has been a type of perfect storm that has raised so many questions. I don’t want to spend my time this week answering any specific questions, but I did want to address the situation in general. First, if you feel confused by any of this, that is okay. One of the reasons people do not always enjoy thinking about taxes, after all, is that they are complicated. So sure, the recent legislation is complicated, but taxes have always been so. It is not as if a new world has been established that you will not be able to navigate. (And you know someone who can help you get through, too, don’t you?) Second, know that all the new rules do not apply to the taxes you will soon be filing for 2017. Anything you did last year to keep yourself in the position you wanted to be in when it came to taxes will still have been good moves. If you are worried about how any new rules will affect you in the future, however, let’s talk. It is still January, so we have time to plan in ways that will have you where you want to be under the new rules. Last, if instead you find yourself in a position where you have not paid much attention to the whole situation, that can be okay. Through all of this, the fact that many people will experience minimal impact can be lost, but do not ignore it out of fear and anger. When looked at through partisan eyes, some think the new act is the path to prosperity, and others believe it is sending us to ruin. If you look at it through practical eyes, however, it just means there are new rules governing what your tax obligation will be. The latest act has involved lots of changes, but it did not institute a wholly new system. You have made it through the tax system in the past, and you will make it through again. There is no new standard that is going to put anyone in a position where they can no longer meet or understand their obligations. This does not mean that everyone needs to like the fact that this legislation passed, but all now must follow it. Anger and fear will only clouds things as we do so. We have been here for you before, when taxes could be a complicated and confusing mess, and we remain here for you now, when taxes can still be a complicated and confusing mess. We have finally made it to 2018 after a bit of a roller-coaster ride through 2017. The last year ended with pretty big tax news, and its ramifications are bound to come up many times throughout the current year. First, however, we must still file tax returns for 2017 and this will come with a new spate of scams run by people trying to take advantage of how frightening taxes can seem. If it seems that I write about such things often, it is because I do. As long as scammers keep trying to find ways to take your money, we must remain vigilant and stay on top of their tactics. So to that end, here is a list of five new things to watch out for. 1 – Fake phone numbers One of the best tactics for tax scammers is to do everything they can to make it appear as if their communications are actually coming from the IRS. One way they have been doing is by setting up spoof numbers with a caller ID that is a Washington D.C. number and some that even come up on caller iD with a label such as “IRS-important.” This is the time to remember that the actual IRS will never make first contact with you over the phone. You will receive a mailed notice, and likely multiple ones, before ever actually speaking to someone from the agency. And if you question if who you are talking to is actually from the IRS, it is okay to end your current conversation, and check its veracity. 2 – Voicemail Messages Since many are learning that it is okay to just ignore people who call out of nowhere and say they are from the IRS, scammers are trying to bypass that by finding ways to leave voicemails without your phone ever ringing. It can feel more frightening if you get their whole spiel left in that manner, but again, this will never be the first way that you hear from the IRS. 3 – Revoking your degree Scammers also do what they can to try to hit people where it hurts. To that end, there are scams that come with a threat saying if you do not pay their fictional bill, then they will revoke your Bachelor’s Degree. When looking at this from afar, we can logically see how this brand of punishment makes no sense, but if in the midst of an already frightening situation, you can appreciate how this could also be rather disconcerting. But again, the IRS does not use this tactic. 4 – Social Media Just as how the IRS will always contact you by mail before calling you, their first method of contact will not be through your social media. In this world, this is often a great way to get someone’s attention, and scammers know this. 5 – Specific methods of payment Finally, many scams come with demands of types of payment that should give you pause. This can be prepaid debit cards or even things like iTunes gift cards. This is another one of those situations where from afar you see how it should feel off to pay a legitimate bill through such means. If someone starts to threaten you, though, you might do whatever it takes to make it stop. Warmly, Nicole Odeh Connect to Us ~ Facebook ~ Twitter |
Archives
November 2024
Categories
All
|
Website by Odeh Media Group
Copyright ©2024 TSBAS.com, All Rights Reserved |
The Small Business Accounting Solution, Inc
50 South 1st Avenue, Coatesville PA 19320 (844) 208-2937 |