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Our blog is here to provide you the latest local tax news and to share insights among our members.
If You Itemize Deductions, Avoid Tax Surprises with a “Paycheck Checkup”
People who’ve itemized deductions on past tax returns should do a “paycheck checkup” by contacting their Enrolled Agent or using the updated IRS Withholding Calculator. This is especially important due to tax law changes from the Tax Cuts and Jobs Act, such as:
- A cap on deductions for state and local taxes.
- Limits to the deduction for home mortgage interest in certain cases.
- Eliminated deductions for employee business expenses, tax preparation fees and investment expenses.
See IRS.gov/taxreform for more information.
IRS news releases:
IRS Phone Scam Intensifies During Filing Season
As taxpayers are working to file their taxes, criminals are also hard at work — attempting to steal their money. While there are several versions of tax scams, the classic telephone con continues to thrive, especially during filing season. As a reminder, here’s how the scam works:
- Scammers call taxpayers telling them they owe taxes and face arrest if they don’t pay. Sometimes, the first call is a recording, asking taxpayers to call back to clear up a tax matter or face arrest.
- When taxpayers call back, the scammers often use threatening and hostile language. The thief claims the taxpayers may pay their debts using a gift card, other pre-paid cards or wire transfers.
- Taxpayers who comply lose their money to the scammers.
Taxpayers should remember that the IRS does not:
- Call taxpayers demanding immediate payment using a specific payment method, but will first mail a bill.
- Threaten to have taxpayers arrested for not paying taxes.
- Demand payment without giving taxpayers an opportunity to question or appeal the amount the IRS believes they owe.
- Ask for credit or debit card numbers over the phone.
Taxpayers who receive these phone calls should:
- Hang up the phone immediately, without providing any information.
- Report these calls to the:
- Treasury Inspector General for Tax Administration, using the IRS Impersonation Scam Reporting form, or by calling 800-366-4484.
- Federal Trade Commission, using the FTC Complaint Assistant on FTC.gov, being sure to include “IRS Telephone Scam” in the notes.
More Information:
How to know it’s really the IRS calling or knocking on your door
Enrolled Agent Certificate Course at the Santa Rosa Junior College
Do you know someone who wants to become an Enrolled Agent?
The Santa Rosa Junior College is now offering a 12 unit certificate course that prepares people to become Enrolled Agents! The classes are offered online and start March 26 2018
CLICK HERE for more information
2017 e-Filing will open on January 29th
The Internal Revenue Service announced today that the nation’s tax season will begin Monday, Jan. 29, 2018 and reminded taxpayers claiming certain tax credits that refunds won’t be available before late February.
The IRS will begin accepting tax returns on Jan. 29, with nearly 155 million individual tax returns expected to be filed in 2018. The nation’s tax deadline will be April 17 this year – so taxpayers will have two additional days to file beyond April 15.
Many software companies and tax professionals will be accepting tax returns before Jan. 29 and then will submit the returns when IRS systems open. Although the IRS will begin accepting both electronic and paper tax returns Jan. 29, paper returns will begin processing later in mid-February as system updates continue. The IRS strongly encourages people to file their tax returns electronically for faster refunds.
The IRS set the Jan. 29 opening date to ensure the security and readiness of key tax processing systems in advance of the opening and to assess the potential impact of tax legislation on 2017 tax returns.
The IRS reminds taxpayers that, by law, the IRS cannot issue refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) before mid-February. While the IRS will process those returns when received, it cannot issue related refunds before mid-February. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2018, if they chose direct deposit and there are no other issues with the tax return.
April 17 Filing Deadline
The filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018, rather than the traditional April 15 date. In 2018, April 15 falls on a Sunday, and this would usually move the filing deadline to the following Monday – April 16. However, Emancipation Day – a legal holiday in the District of Columbia – will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 17, 2017. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.
Pre-paying 2018 state and local real property taxes in 2017 may be tax deductible
The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.
The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed. The following examples illustrate these points:
Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return.
Example 2: County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018. County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.