Passport Cancellation Program – IRS

Beginning the week of January 22, 2018 the IRS will begin certifying Seriously Delinquent Taxpayers (SDT) that owe more than $51,000 (amount adjusted for CPI annually) and the taxpayer is not working with the IRS to settle the debt with the IRS. Taxpayers will begin receiving the first round of CP508C notices around February 19 providing the taxpayer 90 days to cure. For information about the letters enter CP508C in the search box.

The State Department will not allow SDTs to renew their passports and the State Department has the discretion to revoke passports. The IRS states there is little standard or guidance other than that from the State department and that they “may” revoke a passport for a certified SDT.

The answers to many questions are unknown such as (1) taxpayers that live outside USA what will happen regarding them, (2) will humanitarian considerations be given to taxpayers needing to leave the country, (3) taxpayers that their jobs require them to travel outside the USA will they get a waiver to travel plus many other questions.

For more information about this program enter passport cancellation in the search box and this was the second option.

Are 2018 property taxes paid in 2017 deductible?

IRS: 2018 property taxes deductible if assessed and paid in 2017 – Says the headlines, but you really need to look closer. Here are 2 examples that the IRS gives and the 2nd one says the property taxes are not deductible
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.&n bsp; 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.

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