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10-18-13: Government (including IRS) is Back at Work
As expected, our esteemed lawmakers crafted an 11th hour "patch" to avoid a default and re-open government for the people. I'm not going to waste your time discussing the ramifications. We've all seen this dance and we will all see it again in December.
What you need to remember is that the IRS is re-opened for business and that "critical" operations will be addressed immediately to restore order. What that means and which areas receive focus is yet to be revealed, but you can be sure tax court cases, audits, examinations, and other tax resolution-related cases will quickly resume, as will revenue-collecting services.
No word on when refunds will begin, but we will keep you posted!
10-16-13: For 2013 Tax Planning: Tax Extenders
After 2013, many popular but temporary tax incentives (known as extenders) are scheduled to expire. They include the state and local sales tax deduction, the teacher’s classroom expense deduction, the research tax credit, transit benefits parity, and many more. Some lawmakers in Congress have proposed to include the extenders in year-end comprehensive tax reform legislation, but leaders in the House and Senate have been cool to this idea. More likely, these incentives will be extended for one or two years in a year-end stand-alone bill or linked to other legislation. Our office will keep you posted of developments on the fate of these valuable tax incentives
Beware of Bogus IRS Emails
The IRS receives thousands of reports every year from taxpayers who receive emails out-of-the-blue claiming to be from the IRS. Scammers use the IRS name or logo to make the message appear authentic so you will respond to it. In reality, its a scam known as phishing, attempting to trick you into revealing your personal and financial information. The criminals then use this information to commit identity theft or steal your money.
The IRS has this advice for anyone who receives an email claiming to be from the IRS or directing you to an IRS site:
- Do not reply to the message;
- Do not open any attachments. Attachments may contain malicious code that will infect your computer; and
- Do not click on any links in a suspicious email or phishing website and do not enter confidential information. Visit the IRS website and click on 'Identity Theft' at the bottom of the page for more information.
Here are five other key points the IRS wants you to know about phishing scams.
1. The IRS does not initiate contact with taxpayers by email or social media channels to request personal or financial information;
2. The IRS never asks for detailed personal and financial information like PIN numbers, passwords or similar secret access information for credit card, bank or other financial accounts;
3. The address of the official IRS website is www.irs.gov. Do not be misled by sites claiming to be the IRS but ending in .com, .net, .org or anything other than .gov. If you discover a website that claims to be the IRS but you suspect it is bogus, do not provide any personal information on their site and report it to the IRS;
4. If you receive a phone call, fax or letter in the mail from an individual claiming to be from the IRS but you suspect they are not an IRS employee, contact the IRS at 1-800-829-1040 to determine if the IRS has a legitimate need to contact you. Report any bogus correspondence. Forward a suspicious email to firstname.lastname@example.org;
5. You can help the IRS and other law enforcement agencies shut down these schemes. Visit the IRS.gov website to get details on how to report scams and helpful resources if you are the victim of a scam. Click on "Reporting Phishing" at the bottom of the page.
Posted in general
The 2012 Tax Season is Approaching
How will you fare? Every taxpayer benefits from the same low rates as in 2011.
Are you a worker? You may or may not have noticed that Congress is still giving you a "payroll tax holiday" for 2012. Instead of extracting 6.2% from your paycheck for Social Security, 4.2% is being taken. If you're spending it all, you're doing your part to stimulate the economy.
Are you self-employed? The"payroll tax holiday" will also benefit you at tax time. Your self-employment tax calculation will be reduced by 2% as it was in 2011.
Are you married? You were saved once again from the marriage tax penalty for 2012.
Do you have young children? You can still benefit from the Child Tax Credit, the Earned Income Credit, and the Dependent Care Credit at the same levels as in the past.
Do you have children in college? The American Opportunity Tax Credit is still a part of your tax picture if you meet the qualifications. The credit of up to $2,500 has helped many taxpayers to finance higher education.
Are you an investor? You are still in luck. Capital gains and qualified dividends are still free of Federal tax in the 10% and 15% tax bracket and 15% in all higher brackets. Don't count on this special break after this year. The free capital gains are scheduled to end on December 31 of 2012.
Are you paying on student loans? The interest on old loans of up to $2,500 is still deductible as it was in 2011.
Did you do a 2010 Roth conversion? If you deferred the tax to 2011 and 2012, the last installment is due.
Do you pay mortgage insurance premiums? They are no longer deductible as an itemized deduction.
Did you finally buy new windows or insulation? There is no longer an energy credit.
Do you own stock in an insurance company that demutualized? Another court case has surfaced in your favor. It appears that you will someday have a basis other than 0 on your stock.
Are you self-employed and paying Medicare premiums? The IRS has finally confirmed that you can deduct these premiums as self-employed health insurance. You can also amend old open tax years to take the deduction.
Are you part of a same-sex relationship? The courts are finally deciding in your favor in many tax related situations.
Do you owe the IRS? Under its "Fresh Start" initiative, the IRS is offering:
● Failure to pay penalty relief to some unemployed individuals,
● Streamlined installment agreements to catch-up on back taxes, and ● An Offer in Compromise program that will benefit more taxpayers.
Are you a college-bound student tackling the FAFSA form? The IRS has created an automated system to help you access the data you need and minimize the time spent.
Last Updated by Leigh Van Gilst on 2012-12-20 07:50:58 AM