Tax Tidbits

Posted May 16, 2018 / No comments

The IRS issues inflation-adjusted Health Savings Account (HSA) figures for 2019. For calendar year 2019, the annual contribution limit for an HSA for an individual with self-only coverage under a high deductible health plan (HDHP) will be $3,500 (up from $3,450 for 2018). For family coverage, the contribution limit will be $7,000 (up from $6,900

Posted May 8, 2018 / No comments

As you know, the Tax Cuts and Jobs Act (TCJA) made many changes to the federal income tax law. Personal income tax rates are now lower. Personal exemptions have been eliminated. The standard deduction has nearly doubled. The law also affected state payroll taxes in several ways. Many states are currently addressing TCJA changes in their

Posted May 1, 2018 / No comments

What’s the research payroll tax credit and how does it work? On its website, the IRS answers this question for employers seeking to claim the research expense credit against their payroll tax liabilities. Employers report wages, income tax withholding and FICA taxes quarterly or annually. Qualified small businesses with eligible research expenses may claim up

Posted April 25, 2018 / No comments

Don’t underestimate the importance of tax records. Amounts spent to conduct business are generally deductible on your tax return, but you may have to prove the expenses. One married couple was denied business deductions claimed by the husband. The U.S. Tax Court noted that some of his expenses were estimated rather than verified by records,

Posted April 11, 2018 / No comments

The IRS clarified several procedures that apply when there is identity theft, including when taxpayers should (and should not) file Form 14039, “Identity Theft Affidavit.” A taxpayer should file Form 14039 if he or she attempts to file an electronic tax return and the IRS rejects it because a return bearing the taxpayer’s Social Security

Posted April 4, 2018 / No comments

What are your chances of being audited by the IRS? Not very high, according to the recently issued IRS Data Book. The annual publication contains statistical tables, IRS organizational information, and the rate at which the IRS audits tax returns. In 2017, the audit rate dropped to 0.6%, the lowest rate since 2002. In addition,

Posted March 27, 2018 / No comments

This is no April Fool’s joke! IRA owners who turned age 70½ in 2017, but opted to wait until 2018 to begin taking their required minimum distributions (RMDs) for 2017, must receive their first RMDs by April 1. The IRS reminds participants in qualified retirement plans that, to avoid a steep penalty, they must generally begin

Posted March 20, 2018 / No comments

The IRS announced that the Offshore Voluntary Disclosure Program (OVDP) is ending on September 28, 2018. The program is a form of tax amnesty that allows U.S. taxpayers with unreported foreign accounts to avoid criminal charges and pay reduced civil penalties by making voluntary disclosures to the IRS. The IRS noted that, by alerting taxpayers to the

Posted March 14, 2018 / No comments

The IRS is warning taxpayers against scam groups masquerading as charitable organizations. The phony charities attempt to attract donations from unsuspecting taxpayers, using a charitable reason and the promise of a tax deduction as bait. The fraudsters often use names similar to those of nationally known organizations. Fake charities are one of the IRS’s “Dirty

Posted February 28, 2018 / No comments

Despite new restrictions under the Tax Cuts and Jobs Act (TCJA), the IRS announced that taxpayers can often still deduct interest on a home equity loan, home equity line of credit, or second mortgage, regardless of how the loan is labeled. On Feb. 21, the IRS clarified that the TCJA does suspend the deduction for