Happy tax filing month! To help celebrate, this month's newsletter includes a tax quiz exploring the history of taxation in the United States. Also included is a reminder to help your favorite charitable organizations retain their nonprofit status, a simple four-step household budget building process and a reminder of some popular tax breaks that are no longer available in 2017.
If you have not already done so, now is the time to review your tax situation and make a 2017 estimated quarterly tax payment using Form 1040-ES. The first quarter due date is now here.
First-quarter due date: Tuesday, April 18, 2017.
Remember, you are required to withhold (pre-pay) at least 90 percent of your current tax obligation, or 100 percent of last year’s federal tax obligation throughout the tax year.* A quick look at last year’s tax return and a projection of this year’s obligation can help determine if a quarterly payment might be necessary in addition to what is being withheld from any paychecks. Here are some things to consider:
Your next audit may be an "audit lite"
In-person audits with an IRS agent are becoming more uncommon. The IRS is instead handling many routine reviews through form letters called correspondence audits.
These IRS letters are a kind of “audit lite” the agency uses to ask for clarification and justification of specific deductions on your tax return. Common issues that trigger a correspondence audit are large charitable deductions, withdrawals from retirement accounts and education savings plans, excess miscellaneous deductions, and small business expenses.
The IRS disclosed there will be more than $1 billion in federal tax refunds forfeited this year if taxpayers don’t claim them by April 18.
Refunds have to be claimed within three years or they are forfeited to the government. The unclaimed $1 billion comes from about 1 million taxpayers who still haven't filed returns for the 2013 tax year. Often the people who leave these refunds behind are young adults, college students, senior citizens and low-income taxpayers.
Every industry and profession has common terms that are used so often those of us in the business often forget that most people do not have the depth of understanding that a person working within the tax code might have. One of these areas is understanding the differences between the tax terms "deductions" and "credits". Is one better than the other?
DiSabatino CPA Receives 2017 Best of Camarillo Award
Camarillo Award Program Honors the Achievement
CAMARILLO March 2, 2017 -- DiSabatino CPA has been selected for the 2017 Best of Camarillo Award in the Certified Public Accountants category by the Camarillo Award Program for the fifth consecutive year.
As your children grow older, you can easily be surprised by a larger tax bill. To help ease the possible burden, consider these tax implications as your dependent children age.
This month:
The tax code is about 75,000 pages long, so it’s not surprising there are many overlooked money-saving deductions hidden within it. Check out this list of commonly overlooked deductions. You might wind up with a bigger refund than you expected.
The IRS recently announced that tax returns using the Earned Income Tax Credit and the Additional Tax Credit will have their refunds issued. Congress approved legislation that delayed sending out these refunds until at least February 15th.
Here are the key dates:
Saturday, February 18th: IRS "Where’s My Refund" web application will be updated with refund information.
Week of Feb. 27th: Probable timeframe the refunds will be arriving in bank accounts.
Here is a copy of the announcement:
Where’s My Refund? will be updated on Feb. 18 for the vast majority of early filers who claimed the Earned Income Tax Credit or the Additional Child Tax Credit. Before Feb. 18, some taxpayers may see a projected deposit date or an intermittent message that the IRS is processing their return.
By law, the IRS is required to hold EITC and ACTC refunds until Feb. 15. However, taxpayers may not see those refunds until the week of Feb. 27. Due to differing timeframes with financial institutions, weekends and the Presidents Day holiday, these refunds likely will not start arriving in bank accounts or on debit cards until the week of Feb. 27 -- if there are no processing issues with the tax return and the taxpayer chose direct deposit.
Source: IRS e-news
Please recall this announcement only relates to held refunds that use the Earned Income Tax Credit and the Additional Tax Credit. Other refunds should be processed in normal timing.
Please consult our firm to asses your specific situation.
DiSabatino CPA
Michael DiSabatino
651 Via Alondra Suite 715
Camarillo, CA 93012
Phone: 805-389-7300
ww.sharpcpa.com
This publication provides summary information regarding the subject matter at time of publishing. Please call with any questions on how this information may impact your situation. This material may not be published, rewritten or redistributed without permission, except as noted here. All rights reserved.
If you think President Trump's recent executive order means that the fees for not having health insurance are no longer in effect, you could be sorely mistaken. To avoid potentially thousands of dollars in "shared responsibility" tax penalties, you still need to be covered by a basic level of health insurance.
More than 90% of individual tax returns are now filed electronically, and usually the process goes smoothly. However, when an e-filed tax return is rejected, e-filing can become more complicated.
s your mailbox fills up with information required to organize your 2016 tax records, now is the time to think about productive ways to use your potential refund. Outlined here are some ideas to consider. Unfortunately, tax-filing season is also tax-scam season. This month's newsletter shows you how to identify possible fraudsters that may target you. Information regarding the pending overtime law change and the taxability of collectibles round out this month's newsletter.
Should you know of someone who may benefit from this information please feel free to forward this to them.
If a parent or loved one died this past year, you may wish to consider filing a final tax return even if not technically required to do so.
One of the more common tax questions is whether you need to file a tax return this year. The answer is: It all depends. Here are some quick tips to help you determine your answer.
Most taxpayers receive at least one 1099 each year. Virtually every small business, including sole-proprietors, must issue at least one 1099 each year. Here is a summary of the most common of these informational tax forms that you will need to file your tax return this year.
Is a worker an independent contractor or an employee? This seemingly simple question is often the contentious subject of numerous IRS audits. As an employer, getting this wrong could cost you plenty in the way of Social Security, Medicare taxes, and other employment related taxes. Here is what you need to know.
Extension for Form 1095 Reporting
What everyone needs to know
For 2015 tax returns, everyone employed by a company with 50 or more employees will receive a new Form 1095. This form is in addition to the Form 1095’s received by other taxpayers using the Marketplace to purchase their health insurance. You need this form to file your taxes as it provides the necessary proof that you have adequate health insurance for the year.
A recent announcement by the IRS provides a delay for the issuing of this form due to complications in creating the proper form by employers and insurers.
IRS PIN Announcement: DO NOT THROW OUT
If you are one of the unfortunate victims of IRS identity theft you will need a one-time PIN to file your tax return. Without this numeric identifier your 2015 tax return will be rejected. The IRS issues taxpayer victims this PIN in a written notice.
Now is the time to make your estimated tax payment
If you have not already done so, now is the time to review your tax situation and make an estimated quarterly tax payment using Form 1040-ES. The fourth quarter due date is now here.
