As is typical at this time of the year, there are phishing e-mails circulating. The one we saw today appeared to be from the IRS, and was sent claiming that the recipient was entitled to a refund. All that the recipient had to do was complete a form with their personal information. PLEASE BE AWARE OF THESE SCAMS. The IRS will not request any personal information through e-mail. If you receive an e-mail of this type, please do not provide any personal information. Some of the fraudulent e-mails look convincingly real. Be weary of providing any personal information to anyone over e-mail or the phone.
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.
New businesses have many accounting needs that are often overlooked. Many new business owners may not think to contact an accountant until they are already in operation. An experienced accountant’s support in developing a business plan, wealth of financial knowledge, and access to resources is necessary to the foundation of a new company. Whether you are a first time business owner or a seasoned entrepreneur, a dedicated accountant can provide a much needed service to a business owner as a consultant, offering critical financial advice and aiding in several crucial business decisions before a company begins operations. These decisions can range from choosing an entity type, financing the company, hiring key personnel, and record keeping. Additionally, a knowledgeable accountant can work with your attorney to ensure that all tax issues are properly addressed in your legal documents.
90% of startups fail within the first five years.* By checking each and every box in the correct order on an ideal startup timeline, your business will have a greater chance of succeeding. It has also been found that an entrepreneur who does not ignore anything has better odds of lasting longer than five years. Initial financial needs cannot be ignored. Let us provide you the tools and resources to help you reach the top 10%. Read more
The task of “spring cleaning,” a thorough cleaning of a house or room that can really happen any season, is one that many of us put off as long as possible. Though the chore of sorting through old furniture, clothing and household items no longer needed can be a thankless one to complete, the value of many items donated to charitable organizations can be deducted on your federal income tax return which means more money in your pocket and provides validation as a job well done.
To deduct the value of donated goods, the IRS requires that you keep a record of the donation. This includes the donation receipt from the charity, which includes the drop off date, and an itemized list of what was donated. One good practice made easier by technology: Use your smartphone to take a picture of the items, and of the receipt as a backup.
How do you know how much you can deduct on your return? First, make sure you are donating to a qualified, 501(c)(3), non-profit organization. Items must be in “good” or “nearly new” condition in order to deduct the donation on your tax return. The deductible amount is the current fair market value of the item. In other words, you can deduct the amount that you would expect to receive if you sold the item. Read more