WASHINGTON — The Internal Revenue Service today strongly encouraged taxpayers who are seriously behind on their taxes to pay what they owe or enter into a payment agreement with the IRS to avoid putting their passports in jeopardy.

This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. See Notice 2018-1. The FAST Act also requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may revoke their passport.

Taxpayers affected by this law are those with a seriously delinquent tax debt.  A taxpayer with a seriously delinquent tax debt is generally someone who owes the IRS more than $51,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired or the IRS has issued a levy.

There are several ways taxpayers

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WASHINGTON — The Internal Revenue Service today released Notice 1036, which updates the income-tax withholding tables for 2018 reflecting changes made by the tax reform legislation enacted last month. This is the first in a series of steps that IRS will take to help improve the accuracy of withholding following major changes made by the new tax law.

The updated withholding information, posted today on IRS.gov, shows the new rates for employers to use during 2018. Employers should begin using the 2018 withholding tables as soon as possible, but not later than Feb. 15, 2018. They should continue to use the 2017 withholding tables until implementing the 2018 withholding tables.

Many employees will begin to see increases in their paychecks to reflect the new law in February. The time it will take for employees to see the changes in their paychecks will vary depending on how quickly the new tables are implemented by their employers and how often they are paid — generally weekly, biweekly or monthly.   The new withholding tables are designed to work with the Forms W-4 that workers have already filed with their employers to claim withholding allowances. This will minimize burden on taxpayers

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As taxpayers prepare for the January 29 start of filing season, they should consider a direct deposit of any refunds due. It’s easy, safe, fast — and the best way to get a refund. That’s why 80 percent of taxpayers choose it every year.

IRS Direct Deposit:

    •    Is Fast. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit. They can use IRS Free File to prepare and e-file federal returns for free.  Taxpayers who file a paper return can also use direct deposit.  

    •    Is Secure. Since refunds go right into a bank account, there’s no risk of having a paper check stolen or lost. This is the same electronic transfer system that deposits nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.

    •    Is Easy.  Choosing direct deposit is easy. With e-file, just follow the instructions in the tax software. For paper returns, the tax form instructions serve as a guide. Make sure to enter the correct bank account and routing number.  

    •    Has Options. Taxpayers can split a refund into several

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Any tax professional with an IRS Preparer Tax Identification Number (PTIN) is authorized to prepare federal tax returns. However, tax professionals have differing levels of skills, education and expertise.

An important difference in the types of practitioners is “representation rights.” Here is guidance on each credential and qualification:

UNLIMITED REPRESENTATION RIGHTS: Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS. Tax professionals with these credentials may represent their clients on any matters including audits, payment/collection issues, and appeals.

Enrolled Agents – Licensed by the IRS. Enrolled agents are subject to a suitability check and must pass a three-part Special Enrollment Examination, which is a comprehensive exam that requires them to demonstrate proficiency in federal tax planning, individual and business tax return preparation, and representation. They must complete 72 hours of continuing education every 3 years. Learn more about the Enrolled Agent Program.

Certified Public Accountants – Licensed by state boards of accountancy, the District of Columbia, and U.S. territories. Certified public accountants have passed the Uniform CPA Examination. They have completed a study in accounting at a college or university and also met experience and good character requirements established by their respective boards of accountancy. In

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It’s the time of the year when many taxpayers choose a tax preparer to help file a tax return. These taxpayers should choose their tax return preparer wisely.  This is because taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return.

Here are ten tips for taxpayers to remember when selecting a preparer:

1. Check the Preparer’s Qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool helps taxpayers find a tax return preparer with specific qualifications. The directory is a searchable and sortable listing of preparers.
2. Check the Preparer’s History. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to the verify enrolled agent status page on IRS.gov or check the directory. 
3. Ask about Service Fees. Avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. When asking about a preparer’s services and fees, don’t give them tax documents, Social Security

The Internal Revenue Service announced today that the nation’s tax season will begin Monday, Jan. 29, 2018 and reminded taxpayers claiming certain tax credits that refunds won’t be available before late February. The IRS will begin accepting tax returns on Jan. 29, with nearly 155 million individual tax returns expected to be filed in 2018. The nation’s tax deadline will be April 17 this year – so taxpayers will have two additional days to file beyond April 15. 

Many software companies and tax professionals will be accepting tax returns before Jan. 29 and then will submit the returns when IRS systems open. Although the IRS will begin accepting both electronic and paper tax returns Jan. 29, paper returns will begin processing later in mid-February as system updates continue. The IRS strongly encourages people to file their tax returns electronically for faster refunds.

The IRS set the Jan. 29 opening date to ensure the security and readiness of key tax processing systems in advance of the opening and to assess the potential impact of tax legislation on 2017 tax returns.

The IRS reminds taxpayers that, by law, the IRS cannot issue refunds claiming the Earned Income Tax Credit (EITC) and the

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Mid-January is the official start of 2018 tax season, here are some tips to get started in preparing to file your 2017 tax return.

January 31 is the date when employers must issue w-2 and 1099 income statements to employees.

As soon as you receive all your tax documents: the earlier you file, the better. For 2018, same as in 2017, the Internal Revenue Service will delay refunds for those claiming Child Tax Credit and Earned Income Credit to filter fraudulent returns. Refunds will be authorized and released by the middle of February.

Taxpayers who have Individual Tax Identification numbers (ITIN) with middle digits of 70, 71, 72 or 80 need to renew their ITIN before their 2017 returns will be processed.

Kindly review my previous article (2017 issue:2, published 12/17/17 ) what are the necessary documents you may need to be able to file a correct, complete, and an accurate tax return.

Should you have any question or concern, do not hesitate to give us a call. Happy 2018!

Oscar B. Antonio, EA

[2018 issue:1]

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December 22, 2017, the Tax Cuts and Jobs Act of 2017 was passed and signed into law by U.S. President Donald Trump. Most of these new tax changes will go into effect January 1, 2018. The 2017 tax returns will not be affected.

Almost all taxpayers will be impacted by these tax changes. Those who are itemizing their deductions will have fewer deductions to deduct in exchange of a much higher standard deduction. Changes on child-related tax breaks would also greatly affect families.

Here’s a closer look on some of the key provisions of the 2017 tax reform bill.

1. Higher standard deductions but… No more personal exemptions. This new law almost doubled the standard deduction to $12,000 for single individuals, $18,000 for head of household and $24,000 for married filing joint returns. But then, the personal exemption credit has also been eliminated.
2. Tax bracket changes. The new law kept the 7 tax brackets from prior years with different breakpoints and rates. The lowest rate is still 10% but the top rate is lowered from 39.6% to 37%.
3. Higher child tax credit- starting tax year 2018, the child tax credit for each child under 17 is doubled to $2,000 from $1,000.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. Explore your rights and our obligations to protect them.

The Right to Be Informed

Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

The Right to Quality Service

Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.

The Right to Pay No More than the Correct Amount of Tax

Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.

The Right to Challenge the IRS’s Position and Be Heard

Taxpayers

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In a few more days, it will be 2018. A new year full of hope and surprises. Allow me to help you start preparing and organizing for the upcoming tax year.

Be vigilant and be careful not to throw away mails with the words “important tax information enclosed”. The Internal Revenue Service is also furnished with such documents, so it’s very important that you do not miss anything.

A quick reminder of what you should be looking for:

1. W-2s – Review it very carefully and communicate with your employer if you find any discrepancy or if you do not receive it by Feb.1, 2018
2. 1099B – 1099 int or 1099div from accounts that pay interest or dividends
3. 1099-misc – If you worked as independent contractor
4. 1095-A, 1095-B, 1095-C, this are proof of health insurance documents. Specially 1095-A, which you will receive if you purchased insurance from the Health Insurance Marketplace and you qualify for the premium tax credit
5. 1099s – this is where real estate sales is being reported
6. 1099-B for stock sales transaction
7. 1099-R for 401K, Pension and IRA distribution
8. 1099-SSA if you receive Social Security benefits
9. 1095- and 1095-C, these reports foreclosures and Debt consolidations
10. 1098 – Mortgage