After talking about it for the most of the year, Congress completed a tax overhaul this week that will affect almost everyone and change tax strategies for the new year. Most people will see a tax reduction and easier time completing their taxes for the 2018 tax year. Click here for a summation on how the new tax law affects individuals and here for businesses. Also, mileage rates for 2018 have been released. Interest rates for Q1 of 2018 did not change from prior quarter.
Both the House and the Senate have put forth proposals to revise the current tax system with the goal of having something agreed on by the end of the year to go into effect for the 2018 tax year. Whether that will be accomplished is very much up in the air as some provisions are in direct conflict with one another. Although this is just a framework and much will change, Kiplinger.com has put together a slideshow that can be viewed by clicking here that identifies some of the more prominent changes and how the House and the Senate differ.
It's hard to believe that we only have three more months remaining in 2017. Now is a good time to start looking at your tax situation and determining if you need to make some adjustments. No one wants to write that BIG check to the IRS in April and we certainly want to start pulling the money back our way if it looks like we have overpaid in a big way. How do we do that with tax reform on the table? That's a good question that's best approached with the information that we know, our current tax structure. This article from Forbes highlights some areas to focus on now to be best prepared when it comes time to submit your return in 2018.
So you're thinking about starting your own business? Ready to be your own boss? But where do you start? Although simplistic, the article below gives a guideline on starting your new business and the 10 most important areas to focus on first. Click here to to read the article.
While it's true that in order to reduce your taxable income as much as possible you need to itemize deductions on the Schedule A, it is possible to take some deductions on the Form 1040 and still receive the benefit of the Standard Deduction. Kiplinger.com has summarized some of the more common "above the line" deductions in this article.
A recurring theme that you may notice here is tax scams and IRS impersonators. I believe being scammed and being contacted by the IRS are two of the biggest fears people have when it comes to their money. An important point to remember if you ever receive a phone call from someone claiming to be from the IRS is that you don't have to take any action on that phone call as far as giving out your personal information such as social security number, bank information or credit card information. You can call the IRS at their published number on IRS.gov and find out if and why you were previously contacted. The same applies if you receive an email claiming to be from the IRS, simply call their published number to find out if it was a legitimate contact or not. The IRS has the following consumer alert on their website:
Note the IRS will never:
UPDATE: Right on cue, the IRS issued a new warning of a scam related to payments to the EFTPS and use of a debit card. To get the details on this new scam, click here.
Most people don't realize that IRS representatives make house calls. This article explains the different types IRS personnel that you might interact with and what their roles are. An important takeaway is to confirm the visitor is indeed an employee of the IRS and not a scammer looking to gain your personal info or money. The IRS helps with that on their webpage here.
The IRS recently released it's annual list of ways taxpayers are scammed. They have given it a cute name of the "Dirty Dozen" but there is not anything cute about being scammed out of your identity. Click here to see the IRS "Dirty Dozen" tax scams of 2017.
The IRS has announced that they will start accepting 2016 individual tax returns electronically on Monday, January 23, 2017. The deadline to file your 2016 individual return or to request an extension to file is Tuesday, April 18th, 2017.
As another year winds down and our mailbox will soon start filing up again with tax documentation, you may be wondering when you can actually start getting rid of that old, old W-2. Do you have to hold onto it forever? The short is no you don't. This article gives guidance on how long to hold onto the different facets of tax returns from the returns themselves to the supporting documentation.
J. Alan Hayes