At GMG CPA we are here to help. The IRS released this comparison for business to help you understand the implications of the Tax Cuts and Jobs Act. We have posted the entire document here. If you would like to download a copy you can click this link:
The Internal Revenue Service issued guidance today on the business expense deduction for meals and entertainment following law changes in the Tax Cuts and Jobs Act (TCJA).
The 2017 TCJA eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation. That means taking a client to a ball game or a show is no longer considered a business expense.
The Internal Revenue Service and Department of the Treasury today announced their intent to issue regulations on three recent tax law changes affecting popular 529 education savings plans.
Notice 2018-58, addresses a change included in the 2015 Protecting Americans From Tax Hikes (PATH) Act, and two changes included in the 2017 Tax Cuts and Jobs Act (TCJA). Taxpayers, beneficiaries, and administrators of 529 and Achieving a Better Life Experience (ABLE) programs can rely on the rules described in this notice until the Treasury Department and IRS issue regulations clarifying these three changes.
Contribute to Retirement Plans Retirement plans allow you to build a tax-deferred nest egg while lowering your taxable income for the year. Max out your 401(k) and traditional IRA contributions if you can. The limits for a 401(k) are $18,000 plus an extra $6,000 catch-up contribution if you are over 50. IRA limits are $5,500 with a $1,000 catch-up contribution.
At GMG CPA we are here to help answer your questions. The government collects taxes to pay its bills and provide public goods and services. The Internal Revenue Service (IRS) collects your taxes to make sure you and your business are in good standing. The taxes you owe to the government are generally paid through withholding (money taken out of your paycheck), estimated tax payments, and payments made when you file your taxes each year.
You may not have to file a federal income tax return if your income is below a certain amount. However, you must file a tax return to claim a refundable tax credit or a refund on income tax withheld.
Follow these steps to file a tax return:
Gather your tax forms and paperwork - Make sure you have all the IRS forms you need to file. This includes your W-2 form and other income statements. You may also need proof of health insurance coverage to complete your return. Gather all your supporting documents, such as earning statements, interest statements, and receipts for charitable donations. Keep organized records to make the process easier and help avoid issues with your return.
Determine your filing status - Your marital status and how much your household members pay toward keeping up a home can help you figure out your correct filing status.
See if you qualify for free tax return preparation - The IRS offers free tax help to low-income individuals, military servicemembers and their families, people with disabilities, seniors, or taxpayers with limited English.
Choose the simplest form for your tax situation - Determine the correct form to use to file your return. If you file your return using IRS e-file, the system will automatically decide which form you need.
Calculate your taxes and credits - Add up your sources of income, such as your salary, interest earned from your banking or investment accounts, and your pension or retirement-related accounts. Check to see if you are eligible for credits and deductions, including charitable contributions, education, and child care expenses.
Claim your dependents and exemptions - It's important to understand the rules on claiming dependents (a qualifying child or relative) and exemptions (deductions from your and your dependents' taxable income).
Determine if you need to pay quarterly estimated taxes - Find out if you need to pay taxes on income that is not subject to withholding, such as self-employment, interest, and dividends.
File your taxes online or mail your paper tax return - Choose the filing method that best suits your needs: online, a mailed paper return, or through a tax professional. To insure your tax return is filed correctly we hope you will consult a GMG CPA.
Tax Payment Information
You can pay your federal taxes in one of several ways: direct pay, debit or credit card, electronic federal tax payment system, or check or money order.
Tax Refund Information
If you are expecting a refund and want to check its status, the IRS recommends using its online Where's My Refund tool or the mobile app, IRS2Go. These systems are updated once every 24 hours and are the fastest, easiest ways to track your refund.
Refunds are generally issued within 21 days of when you electronically filed your tax return or 42 days of when you filed paper returns.
You can choose to receive your tax refund by direct deposit, U.S. Series I Savings Bonds, or paper check.
Tax Filing when Living Abroad
U.S. citizens or resident aliens (Green Card holders) living abroad must pay U.S. income tax on their worldwide income. The rules for filing tax returns, paying estimated taxes, or estate taxes are generally the same whether you are in the U.S. or abroad. Keep in mind that some of the steps you take, including where and when to file, may be different.
Tax Filing Information for Nonresidents in the U.S.
If you are not a permanent resident, you will need to follow special rules to complete your return. Foreign nationals who cannot get a Social Security number (SSN) need to apply for an individual taxpayer identification number (ITIN). This identification number is used for returns, statements, and other tax-related documents.
Tax Filing Deadlines
The Internal Revenue Service (IRS) began accepting and processing federal tax returns for tax year 2017 on January 29, 2018. The deadline to file federal taxes was April 18, 2018, unless you filed for an extension.
Federal and state taxes usually have the same filing deadlines. Find out the tax filing due dates in your state. If you do not file and pay your taxes on time, you will be charged interest and a late payment penalty. For taxpayers due a refund, there is no penalty for filing a late return. You may be able to get a six month filing extension. For help with filing tax returns contact a GMG CPA.
Doing a less than stellar job keeping track of your business finances? Maybe your New Year's resolutions should be to get your financial house in order. Here are some tips that help.
- Review bank statements and credit card statements— These statements should always come to the business owner or card holder unopened. Review them thoroughly before passing them to the bookkeeper or other employee, thereby preventing unauthorized checks or credit card usage. These are the biggest losses within a small business.
During the online holiday shopping season, the IRS, state tax agencies and the tax industry remind people to be vigilant with their personal information. While shopping for gifts, criminals are shopping for credit card numbers, financial account information, Social Security numbers and other sensitive data that could help them file a fraudulent tax return.
Anyone who has an online presence should take a few simple steps that could go a long way to protecting their identity and personal information.
The Internal Revenue Service, state tax agencies and the tax community, partners in the Security Summit, are marking “National Tax Security Awareness Week”, Nov. 27-Dec. 1, with a series of reminders to taxpayers and tax professionals. In part one, the topic is online security.
Cybercriminals seek to turn stolen data into quick cash, either by draining financial accounts, charging credit cards, creating new credit accounts or even using stolen identities to file a fraudulent tax return for a refund.
Here are seven steps to help with online safety and protecting tax returns and refunds in 2018:
- Shop at familiar online retailers. Generally, sites using the “s” designation in “https” at the start of the URL are secure. Look for the “lock” icon in the browser’s URL bar. But remember, even bad actors may obtain a security certificate so the “s” may not vouch for the site’s legitimacy.
- Avoid unprotected Wi-Fi. Beware purchases at unfamiliar sites or clicks on links from pop-up ads. Unprotected public Wi-Fi hotspots also may allow thieves to view transactions. Do not engage in online financial transactions if using unprotected public Wi-Fi.
- Learn to recognize and avoid phishing emails that pose as a trusted source such as those from financial institutions or the IRS. These emails may suggest a password is expiring or an account update is needed. The criminal’s goal is to entice users to open a link or attachment. The link may take users to a fake website that will steal usernames and passwords. An attachment may download malware that tracks keystrokes.
- Keep a clean machine. This applies to all devices – computers, phones and tablets. Use security software to protect against malware that may steal data and viruses that may damage files. Set it to update automatically so that it always has the latest security defenses. Make sure firewalls and browser defenses are always active. Avoid “free” security scans or pop-up advertisements for security software.
- Use passwords that are strong, long and unique. Experts suggest a minimum of 10 characters but longer is better. Avoid using a specific word; longer phrases are better. Use a combination of letters, numbers and special characters. Use a different password for each account. Use a password manager, if necessary.
- Use multi-factor authentication. Some financial institutions, email providers and social media sites allow users to set accounts for multi-factor authentication, meaning users may need a security code, usually sent as a text to a mobile phone, in addition to usernames and passwords. For added protection, some financial institutions also will send email or text alerts when there is a withdrawal or change to the account. Generally, users can check account profiles at these locations to see what added protections may be available.
- Encrypt and password-protect sensitive data. If keeping financial records, tax returns or any personally identifiable information on computers, this data should be encrypted and protected by a strong password. Also, back-up important data to an external source such as an external hard drive. And, when disposing of computers, mobile phones or tablets, make sure to wipe the hard drive of all information before trashing.
There are also a few additional steps people can take a few times a year to make sure they have not become an identity theft victim.
Receive a free credit report from each of the three major credit bureaus once a year. Check it to make sure there are no unfamiliar credit changes. Create a “My Social Security” account online with the Social Security Administration. There users can see how much income is attributed to their SSN. This can help determine if someone else is using the SSN for employment purposes.
You can take steps to protect themselves online. Visit the “Taxes. Security. Together.” awareness campaign or review IRS Publication 4524, Security Awareness for Taxpayers, to see what can be done.
Our community is well known for giving and caring. Many of you have already donated to disaster relief and many may be planning to. It is a sad reality that cyber-criminals eagerly exploit tragic circumstances in order to take advantage of and steal from new targets. In the aftermath of Hurricane Harvey and Hurricane Irma, a number of new scams have cropped up, including:
The FBl and the IRS are warning the public to be on alert for a phone scam that spoofs, or fakes the FBl’s name on the recipient’s voice-mail.
Scammers have targeted residents around the region, claiming to be the FBI stating they are an “officer” of the FBI , Department of Tax and Crime Investigation. The intended victim is told that this is their final notice and that their physical address is under investigation and an arrest warrant has been issued under their name.
The public is reminded that the FBI does not call private citizens threatening arrest or requesting money and to never give out unsolicited requests for personal information to callers that you don't know. Individuals receiving such calls can file a complaint through the FBl’s Internet Crime Complaint Center at www.IC3.gov.
If you’re a C corporation or partnership that sponsors a qualified pension, profit sharing, 401(k) plan or a Simplified Employee Pension Plan (SEP) or Savings Incentive Match Plan for Employees (SIMPLE) IRA plan, please note that the due date for making employer contributions to these plans has changed.
In order to be deductible for the 2016 taxable year, employer contributions for these plans for 2016 have to be made by the due date or extended due date of your 2016 tax return. Since certain tax return due dates have changed for tax years starting in 2016, the time limit for making retirement plan contributions has changed as well.
The number of small business for sale in the US is growing. Business selling websites like Bizbuyandsell.com and Businessesforsale.com are reporting record high numbers. AARP states that as the Baby Boomer generation ages they are looking to sell to businesses and retire in record numbers as well. Often there is no family member willing or able to take over a business and the business goes out to the general market. There is another option.
As we approach the end of the year, this is the time to conduct year-end tax planning in order to optimize your tax position and minimize the amount of penalties and interest that may be due on your 2016 tax return filing. Year-end tax planning is more than just looking at your income and expenses for the year, it is about looking forward, understanding your business performance, finding positive ways to both help the performance of your company and optimize your tax position in the future.
In the information age we are all reliant on personal computers and devices. These devices contain our vital information. Cyber threats are real. The IRS has issued a set of instructions that will help you keep those threats at bay. At GMG CPA we are here to help. We wanted to share the information with you. We support efforts to combat identity theft and and fraudulent returns.
North Carolina storm victims will have until March 15, 2017, to file certain individual and business tax returns and make certain tax payments, with similar relief expected soon for Hurricane Matthew victims in other states, the Internal Revenue Service announced today. All workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization also qualify for relief.
If you are a over 65 and qualify you can still benefit from this tax credit for 2016. In 2014 the IRS published these rules:
If you plan to claim a deduction for your medical expenses, there are some new rules this year that may affect your tax return. Here are eight things you should know about the medical and dental expense deduction: