Anthony Sykes & Company

        The current shutdown of the Federal government has essentially frozen certain departments. In some cases, employees just go home, others work with no pay, and others are continuing to work with pay. The IRS has planned for this situation at the end of 2018, and still has some functions that are still active.           At this point, no extensions have been issued . Any petitions or appeals must be filed by their assigned deadline. If a Taxpayer has an established payment plan with the IRS, they must continue those payments.           Tax Season is still expected to begin in January, with some refunds being issued starting in mid-February. However, if the Government Shutdown continues past December 31, the issuing of refunds and the processing of forms will typically be suspended. Essentially, the plans for the start of 2019 would be pushed back. The IRS would move to conserve as much as possible, while still trying to function as a government agency. We will see how t

         As we have discussed in previous posts, the new version of Form W-4 will not go into effect until 2020 at the earliest . When the draft was proposed, it created much uncertainty and with time those privacy concerns will be addressed. In the meantime, withholding cannot continue the same as it has been. The form may be similar, but the law has changed.           The IRS guidance in the area does take into consideration the changes made by the Tax Cuts and Jobs Act . There is an allowance to consider Qualified Business Income ( QBI ) as a deduction for those who meet the requirements found in Section 199A . To not get surprised by a withholding error that may cost a large amount of money, it is good to speak to a Qualified Tax Professional in order to make the necessary adjustments in your paycheck.

         There has been much discussion and debate over this past year. We have all done our best to get an understanding of what the future of taxes will look like. In January, the theories will end, and the tax filings will begin. However, this is only the start of the changes in store. Let’s consider the example of tax brackets and rates.           A year ago, we wrote a post that covered the topic of tax brackets and rates. There are 7 rates that range from 10% - 37%. The brackets will change depending on the filing status. This information was understood at the end of 2017. There are new tax brackets that have been released, but they will apply to when filing taxes in the year 2020. There are aspects of the Tax Cuts and Jobs Act that will change year by year .           For Taxpayers who are not planning any big changes, all that is needed is to keep an eye on the progressive nature of the tax bracket. The difference will be seen. For everyone else, the time to prepare is no

          The topic that has received the most attention on our blog has been The Tax Cuts and Jobs Act. This is more than justified considering its wide scope, and the changes it has made to the tax code. With so many adjustments, we are going to highlight a few areas that might be of special interest.           Divorce. Going forward, those who pay alimony and have a divorce decree dated after December 31, 2018 will no longer be able to deduct the payment. The former spouse who receives the payments must now pay taxes on that income.           State and Local Taxes. Many taxpayers in the past would itemize their return and deduct their SALT from Federal Tax responsibilities. Now that it only possible up to $10,000.           Qualified Business Income. This would be business income that can be called “pass through” income and used to lower the Federal Tax responsibility for a business. This feature, while promoted widely, is very limited in availability. There are incom