Beware of Phishing Scams
At this time of year, identity thieves use many types of phishing scams to try to access the data of tax professionals. One of those schemes involves a phishing email that purports to be from a potential new client.
Such emails are typically from someone who is unknown to the practitioner, and the email typically has no phone number or other way to contact the sender, other than by replying ...
2018 Tax Projections
As practitioners prepare Forms 1040 this season, it is vital to help clients to plan for the effects of the new tax law.
Tax software should include a planning or similar worksheet to allow practitioners to compute an estimate of the effects of the new tax law for their clients using their estimated income for the 2018 tax year.
In addition, since the income tax withholding tables have also...
Retroactive Changes for 2017 Tax Year
The Bipartisan Budget Act was enacted on February 9, 2018, and it includes the retroactive extension of certain tax provisions that had previously expired after December 31, 2016. As a result, these provisions are now available for the 2017 tax year.
While the legislation extends many previously-expired provisions, the most significant of these extended provisions are:
-- The above-the-li...
Driver License Logistics
This is the second year that most software packages will require practitioners to enter driver license information for their clients.
New York is one of only three states that does not allow tax preparation software to transfer driver license information from the prior year version of the software to the current year’s versions. As a result, practitioners must reenter, or copy and paste, t...
IRA Conversions and Recharacterizations
The new tax law that was enacted on December 22, 2017 eliminates that ability of taxpayers to recharacterize a conversion from a traditional IRA to a Roth IRA, effective for tax years beginning after December 31, 2017.
Such recharacterizations have been used in the past by taxpayers who converted balances in a traditional IRA into a Roth IRA and then wanted to undo the conversion. When a tax...
Portals for Client Documents
Practitioners should consider using a secure portal to allow clients to securely upload and send scans or pictures of sensitive tax information and documents. The secure portal uses encryption to protect files that are uploaded to and downloaded from it.
Most practitioners are aware of the vital need to password/encrypt any sensitive information sent to their clients; however, clients are no...
IRS Issues New Withholding Tables for 2018
The IRS has issued Notice 1036, which provides early release copies of the 2018 withholding tables. The notice instructs employers to begin using the 2018 withholding tables as soon as possible, but not later than February 15, 2018. Until making the change over to the new 2018 withholding tables, employers should continue to use the 2017 withholding tables.
In the new tables, the amount as...
Standard Mileage Rate
The IRS has released the 2018 standard mileage rate. For business travel, it is 54½ cents per mile. For medical-related travel, it is 18 cents per mile. The rate for charitable use of an automobile is not subject to adjustment, and it remains 14 cents per mile.
The New Law and Withholding for 2018
The IRS has announced that it expects to issue withholding guidance in January for the 2018 tax year, to reflect the new tax law. In the meantime, the IRS has instructed employers to continue using the 2017 withholding tables and systems until further notice.
The new tax law, which was enacted on December 22, 2017, changes income tax rates for individuals starting in 2018; it also changes th...
Planning for New Tax Law
Now that Congress has approved the new tax law, beginning in 2018, deductions for real estate and state and local income taxes will be limited to a combined total of $10,000. As a result, taxpayers should consider paying certain taxes in December 2017, instead of waiting until 2018, when the new limit will be in effect.
To the extent that a taxpayer pays the 4th quarter 2017 installment of e...