The new Form W-4?

As the year continues there are more drafts of tax forms being released by the IRS. As a result of the Tax Cuts and Jobs Act, the most extensive change to the tax code in 30 years, many forms are being redesigned and will have a new look for the 2018 filing season. At this point there is nothing official, but these previews give us an idea of what practical impact tax reform will bring.

          At first glance, it looks like Form W-4 will be simpler. It reflects the focus that has now been placed on tax credits and different kinds of financial contributions. Many are difficult to forecast at the beginning of the year. Many Taxpayers are unsure of what tax credits they may qualify for. At this point, the only way to give accurate responses in these areas is to fill out up to 11 separate worksheets.           These along with other massive changes will more than likely change some responsibilities between Taxpayers and Employers. As it stands now, Employers will need to calculate…

What is a Tax Lien?

When it comes to collecting tax debt, the IRS has a variety of options to use. Certain ones can only be used when proper criteria have been met. That is the case when it comes to a lien.
A lien is the Federal government’s claim against the property of a taxpayer who does not pay their tax debt. This is not a levy, where the property is seized by the IRS. In this case, the government is saying it has the right above anyone else, to the value of the property in order pay the tax debt. This declaration will apply to any current of future personal assets. This would apply to a business as well.
        A lien is only issued if a tax debt is noted and bill sent asking for payment. If this notice is ignored, then a lien can be issued. This can be a devastating situation, but there are options. Visit our site here to see how we can help you.

A Preview of the New Form 1040

One of the main promises of the Tax Cuts and Jobs Act passed last year, was that filing tax would become simple. At the end of June 2018, a preview of a simplified form was released. We are all familiar with the Form 1040 and were in anticipation of what it might look like moving forward. 
         At a glance, it is clearly much smaller than it used to be. It seems to resemble the postcard comparison that was repeatedly made. However, as you look at the required information, it asks for the SSN of the Taxpayer. This is not a surprise, but it will require an envelope to mail and protect all your sensitive information. This draft is a combination of 3 Form 1040’s, but it also refers to several other Schedules for information. At this point, they have not simplified. At this point, some Taxpayers may need to fill out more to have what is needed for the new Form 1040.

          With all that said, this is just a preview. We can expect many more changes in the months ahead. The IRS is adju…

A Security Warning for Tax Professionals

The world we live in continues to change in a variety of ways. This constant change also applies to the way criminals try to steal sensitive information. In the newest wave of scam attempts, they are going after tax professionals directly.
          In certain states, there have been reports of phishing emails that look like they are from state accounting or professional associations. In reality, they are only an attempt to gain usernames and passwords. This is just another step for cybercriminals to reach their ultimate goal of client data. These tactics change so often, it can be hard to keep up. With that said, there are certain patterns that we can train ourselves to recognize. This vigilance, in addition to basic security practices will help to keep us from falling prey to their tactics.

The Tax Cuts and Jobs Act: The Myths

In the time before the Tax Cuts and Jobs Act (TCJA) was passed, many were unsure about what this major law would mean for them. It might be hard to believe, but it now has been in effect for 6 months. Now is a good time to discuss certain myths surrounding the TCJA. It’s better to know now than find out when it’s too late.
Filing a tax return will be easy. The goal was never to make it easier to file a Tax Return. In fact, as a direct result of passing this law, the IRS has set aside around $300 million dollars for new training, forms, and to upgrade their systems. However, it has given a 20% tax break to certain businesses, which will be much appreciated by small business owners.
Federal tax reform does not affect state taxes. In most cases, state income taxes are in some way based on the Federal tax code. Many Taxpayers are likely to see an increase in the state income taxes they are responsible to pay, even if they receive a tax break at the Federal level. Some states will se…

Small Business Guidance: Know Your Limitations

It’s very hard to run a business. Most people feel that the first year in the life of a business is the most difficult. This is because there are a variety of new responsibilities and demands that are being placed on the owner as they start this venture. Here are a few tips to help minimize the stress for a new business owner.
      Even if it seems like you have everything under control, have a team that you can trust to help you make wise choices. We can’t be everywhere at all times. This group should help you to focus on what is important. A business can’t be run as a hobby. They should also help you understand that just because you think it’s possible, doesn’t mean it’s realistic. The team of supporters you have should help you to know when you have spread yourself too thin. It’s OK to say “no” when it is necessary. It’s better to keep focus on the big picture, than get lost in a relatively small detail. These are all qualities that come with time, but have a positive impact …

The Tax Cuts and Jobs Act: The States Response

As more people begin to gain a real understanding about how the Tax Cuts and Jobs Act (TCJA) will affect their taxes, some are unhappy with the changes. As a result, certain states have taken action to get around some of the provisions laid out in the TCJA. One key issue that has come up is in the area of State and Local Tax (SALT) deductions. In states with a high income tax, Taxpayers were able to deduct that from their Federal income tax for the full amount. This ability is now limited to $10,000, but some states are responding with their own laws.           A few states feel they have been impacted the most and three of them were first in line to write some very unique legislation. New Jersey signed their law on May 4. It gives cities in that state the ability to start their own charitable funds. Since limit for SALT deductions does not cover charitable donations, the plan is to donate to these municipal charities to be able to make up the difference. There is a similar pla…