IR-2019-01, January 7, 2019
WASHINGTON ― Despite the government shutdown, the Internal Revenue Service today confirmed that it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled.
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig.
Congress directed the payment of all tax refunds through a permanent, indefinite appropriation (31 U.S.C. 1324), and the IRS has consistently been of the view that it has authority to pay refunds despite a lapse in annual appropriations. Although in 2011 the Office of Management and Budget (OMB) directed the IRS not to pay refunds during a lapse, OMB has reviewed the relevant law at Treasury’s request and concluded that IRS may pay tax refunds during a lapse.
The IRS will be recalling a significant portion of its workforce, currently furloughed as part of the government shutdown, to work. Additional details for the IRS filing season will be included in an updated FY2019 Lapsed Appropriations Contingency Plan to be released publicly in the coming days.
“IRS employees have been hard at work over the past year to implement the biggest tax law changes the nation has seen in more than 30 years,” said Rettig.
As in past years, the IRS will begin accepting and processing individual tax returns once the filing season begins. For taxpayers who usually file early in the year and have all of the needed documentation, there is no need to wait to file. They should file when they are ready to submit a complete and accurate tax return.
The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.
Software companies and tax professionals will be accepting and preparing tax returns before Jan. 28 and then will submit the returns when the IRS systems open later this month. The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds.
Michigan taxpayers with past-due tax debts should be aware of a new scam making the rounds through the U.S. Postal Service, according to the Michigan Department of Treasury.
In the scheme, taxpayers are sent what appears to be a government-looking letter about an overdue tax bill, asking the taxpayer to immediately contact a toll-free number to resolve a tax debt or face asset seizure. The piece of correspondence appears credible to the taxpayer because it uses specific personal facts about the outstanding tax debt pulled directly from publicly available information.
The scammer’s letter attempts to lure the taxpayer into a situation where they could make a payment to a criminal.
ALL taxpayers should be aware of this scam.
Contact our office if you receive any tax correspondence.
Please remember: the state Treasury Department’s correspondence involves official letters sent through the U.S. Postal Service, including several options to resolve your debt and information outlining your taxpayer rights.
IRS has announced the 2019 cost-of-living adjustments (COLAs) with respect to retirement plan limits.
The following plan limits are increased effective Jan. 1, 2019:
Elective deferrals: The maximum deferral amount for 401(k) and 403(b) plans increases from $18,500 to $19,000 for 2019. Catch-up contributions for individuals aged 50 or over remains $6,000.
SIMPLE accounts: The maximum deferral amount for a SIMPLE plan increases from $12,500 to $13,000 for 2019. Catch-up contributions for individuals aged 50 or over remains $3,000.
Government, etc. deferred compensation plans: The limit on deferrals for deferred compensation plans of state and local governments and tax-exempt organizations, increases from $18,500 to $19,000 for 2019. Catch-up contributions for individuals aged 50 or over remains $6,000.
IRA and Roth IRA income limits: The maximum contribution for IRA and Roth IRA accounts increases from $5,500 to $6,000 for 2019. Catch-up contributions for individuals aged 50 or over remains at $1,000.
Contact our office for more information, or see the full IRS notice: Notice 2018-83, 2018-47 IRB; 11/1/2018.
The IRS announces standard mileage rates for 2018. The optional mileage allowance for owned or leased vehicles (including autos, vans or pickups) will climb 1 cent to 54.5 cents per mile for business travel. Employers also can use this rate for reimbursements to employees who supply their own autos for business use, and to value personal use of certain low-cost employer-provided vehicles. The rates for using a car to get medical care and in connection with a move that qualifies for the moving expense deduction also increase by 1 cent, to 18 cents. (Notice 2018-3)
Most businesses have unclaimed property resulting from normal operations. Any asset, tangible or intangible, belonging to a third party that remains unclaimed for a specified period of time is considered unclaimed property. For example, uncashed payroll checks must be turned over to the State after one year; most other property types, such as vendor checks and accounts receivables credit balances, must be turned over after three years. Government entities must turn over all unclaimed property, regardless of property type, after one year.
Michigan’s Uniform Unclaimed Property Act, Public Act 29 of 1995, as amended, requires businesses and government entities to report and remit to the Michigan Department of Treasury abandoned and unclaimed property belonging to owners whose last known address is in Michigan. In addition, every business or government entity that is incorporated in Michigan must report and remit abandoned property belonging to owners where there is no known address.
New for 2017: Entities without unclaimed property to report under the Michigan Uniform Unclaimed Property Act (Public Act 29 of 1995, as amended) are strongly encouraged to file a zero or negative report. Beginning in 2018, all entities registered to do business in the State of Michigan with nothing to report will be required to submit negative reports. All entities have the ability to both report and remit payments electronically.
A federal judge has blocked the Overtime Rule that was set to go into effect December 1st, affecting more than 4 million workers in the U.S. The rule issued by the Labor Department would have doubled the maximum salary to $47,500 that a worker can earn and still be eligible for mandatory overtime pay. Read more about the federal injunction here. http://on.wsj.com/2guiQg7 Contact our office with questions or concerns about how this may affect you and your business.
An estimated 4.2 million Americans will become eligible for overtime pay beginning December 1, 2016, thanks to an updated minimum salary level announced by the Department of Labor (DOL) earlier this year. That salary is $47,476 per year, or $913 weekly.
Certain employees are exempt from receiving overtime payments because of their earnings and their job function. These are known as the salary test and the duties test. If an employee does not meet both tests, he or she must be paid time-and-a-half for any hours worked beyond 40 per week.
So what does an employer need to do?
- Review your salaried employees to ensure that they meet the salary test of $47,476 per year. Up to 10% of that amount may be paid in the form of a non-discretionary bonus, provided the bonus is paid out at least quarterly.
- Review the job duties performed by your salaried employees. The requirements of the duties test has not changed, but many employers are not familiar with the specifics. Exempt duties include those for executive, administrative, professional, computer, or outside-sales work.
If your salaried employees meet both of the tests listed, they remain exempt from overtime pay. However, if they fail to meet either test they are considered non-exempt from overtime and their pay structure needs to be changed.
For further information, check out the DOL’s website. We also recommend contacting our office or your payroll provider. Act now and be prepared when the new rules take effect.
Please be on the look-out for misleading state compliance solicitations companies are receiving throughout the country. While the majority of these solicitations relate to filing state annual reports, some of them focus on updating your company’s annual minutes or business license requirements. These solicitations appear to be official and come from the state. Typically, they direct the recipient to send a fee, usually much higher than the state would charge and often for services that are not needed.
If you are ever unsure about the legitimacy of a notice you receive, please contact our office.