Increase in standard deduction

The new tax bill increases the standard deduction to $12,000 for individuals and $24,000 for married couples. As a result, some taxpayers may wish to accelerate their itemized deductions into 2017 because they will no longer be able to itemize in 2018.

In addition, in the future, grouping your deductions into one year and taking the itemized deduction and then taking the standard deduction the following year will be possible.

You should check with your tax advisor before doing anything because there are various other limitations, such as the alternative minimum tax, that need to be considered before doing this.

PayPal Phishing e-mail – Another reason not to click on links in emails

Paypal phishing e-mail

I don’t know how many times I have said this, but NEVER EVER click on a link in an email you receive even if you know who the person or company is.
If it’s a company, go to your web browser and open up the company website and sign in from there – never sign in from a link inside an email. If you are 200 percent sure it’s safe then you can 1st sign on to the website from your browser and then click on the link inside the email. If it opens up another window (and doesn’t use the window you opened from the browser), close it immediately. And never reenter your login credentials.
If it’s from a person who you trust AND you are expecting the email and the file, you may be okay. If you have any doubt whatsoever created new email, put the person’s address in from your address book (don’t hit reply) and ask them if they sent the file.
And don’t be scared by what’s in the emails. I got to phony emails this week from a legitimate law firm telling me there was an SEC subpoena waiting for me. I went to my browser, opened their website and the 1st thing at the top of the website was a notice that there were phony emails going around allegedly from their company.
It’s a jungle out there. Don’t get caught in the quicksand.

Health Care Information for Individuals for filing their 2015 tax returns

The IRS has announced that it will allow taxpayers to file their 2015 tax returns, even though they may not receive their Health Care information, and will not have to will file an amended return if there are discrepancies, as long as they rely on other reasonable sources. IRS Notice 2016–4 states “Nonetheless, some employees (and related individuals) who enrolled in coverage through the Marketplace but did not receive a determination from the Marketplace that the offer of employer-sponsored coverage was not affordable could be affected by the extension if they do not receive their Forms 1095-C before they file their income tax returns. As a result, for 2015 only, individuals who rely upon other information received from employers about their offers of coverage for purposes of determining eligibility for the premium tax credit when filing their income tax returns need not amend their returns once they receive their Forms 1095-C or any corrected Forms 1095-C. Individuals need not send this information to the Service when filing their returns but should keep it with their tax records.”

The basic information regarding Health Care Forms can be found at Questions and Answers about Health Care Information Forms for Individuals

Additional information employee versus independent contractor

There is a previous post in which I discuss whether anyone could be an independent contractor, given the current governmental “push” to reclassify them as employees. Now the Department of Labor has come out with the new interpretation in which they are moving away from the 20 point test that has been used for years. You can view a copy of this on my website at DOL Article


IRS sends out erroneous letters

It was announced this week that letters were sent out giving taxpayers an identity theft pin number for filing their 2015 tax returns.

Unfortunately, they did not do enough proofreading and the letters say that the pins are supposed to be used for filing the 2014 tax returns which have come and gone, rather than saying they are supposed to be used for the 2015 tax returns. Please be advised that this is a typo and these pin numbers can be used when you electronically file your 2015 tax return in the next several months.

“Due to an error, taxpayers are receiving Identity Protection PIN letters with an incorrect year listed,” the IRS said in a statement. “Taxpayers and tax professionals should be advised the IP PIN listed on the CP 01A Notice dated January 4, 2016 is valid for use on all individual tax returns filed in 2016. The notice incorrectly indicates the IP PIN issued is to be used for filing the 2014 tax return when the number is actually to be used for the 2015 tax return. The IRS emphasizes the IP PIN listed on the CP 01A notice is valid for the 2015 returns. Taxpayers and their tax professionals should use this PIN number for 2015 tax returns, which the IRS will begin accepting from taxpayers starting Jan. 19, 2016. The IRS apologizes for the confusion and any inconvenience.”

Don’t be fooled by fake IRS phone calls

I received a fake IRS phone call this morning and I had to smile because I was pulling into the driveway of a client for an IRS audit. If they had called 10 minutes later, I could’ve handed the phone to a real IRS agent.

The person on the phone call stated – This is Joe Smith from the IRS and I am calling because the IRS has filed a lawsuit against you. I hung up the phone at that point and I thought I would share how I knew it was a fake.

First, IRS agents are required to identify themselves, both by their name AND ID number. The fact that they left out their number was a red flag.

Also, you will get numerous computer-generated letters, including several certified letters from the IRS before they even assign a case to a real person. The fact that I had not received any correspondence was another red flag. And let me add here  the importance of keeping your address up-to-date with the IRS and notifying them of any change of address.

Finally, the statement that the IRS has filed a lawsuit against me was ridiculous. For the most part, the IRS does not file lawsuits unless there is criminal activity. And, I promise you, you would have had many meetings with the IRS prior to them commencing any lawsuit. What the IRS may do is file a lien against your property or a levy against your wages or bank account.

The bottom line is if you ever get a phone call from the IRS and you have not had any prior contact, it is probably a fraud. If they tell you they are sending a Marshall to arrest you if you don’t pay, that doesn’t happen. My recommendation, if you there may be some validity to it, ask them what address they have on file for you and then ask them to mail you a copy of the IRS notice and you will respond within two weeks. If they start getting aggressive, hang up.

You may also want to ask for their supervisors information, so you can call them back, but I’ve heard that they will normally give you someone else connected with them who acts like a supervisor.

#IRSFraudulentCalls #IRSPhoneScams