Thursday, August 16, 2018

Taxpayers with children, other dependents should check withholding ASAP



Taxpayers who have children and other dependents should use the Withholding Calculator on IRS.gov to perform a “paycheck checkup.” The Tax Cuts and Jobs Act, which was passed late last year, includes changes that will affect 2018 tax returns that people will file in 2019.

Doing a checkup ASAP will help taxpayers determine if they need to adjust their withholding on their paychecks. The earlier they do this, the better. The sooner someone checks it, the more time there is for withholding to take place evenly during the rest of the year. Waiting until later in the year means there are fewer pay periods to make the tax changes.

The new law made changes to the child tax credit and personal exemptions. Taxpayers should do a “paycheck checkup” to determine if the tax law changes could affect their tax situation this year. Here is an overview of the changes to the law that could affect the withholding of parents and caretakers:
Child tax credit
  • The maximum child tax credit increased from $1,000 to $2,000 per qualifying child.
  • Taxpayers whose income was too high to benefit from the Child Tax Credit in prior years may now find they qualify.
  • The credit now phases out at $400,000 for couples and $200,000 for singles, compared with 2017 amounts of $110,000 for couples and $75,000 for singles.
Additional child tax credit
  • The maximum additional child tax credit increased from $1,000 to $1,400.
  • The ACTC is a refundable credit for taxpayers who owe little or no federal income tax. 
Credit for other dependents
  • There’s a new $500 credit that can benefit taxpayers who support other dependents.
  • The taxpayer will claim the credit when filing a tax return.
  • For purposes of this new credit, other dependents include qualifying children or qualifying relatives, such as a college student or an elderly parent.
Personal exemption
  • The new law removes the personal exemption that taxpayers formerly claimed for themself, their spouse and dependents.
The Withholding Calculator allows taxpayers to enter their expected 2018 income, deductions, adjustments and credits – including the child tax credit. Users can click on definitions in the calculator for help in figuring out who qualifies for these expanded credits. 
For information about how to use the calculator and how to change withholding, taxpayers can check out the IRS Tax Reform Tax Tips on IRS.gov.

Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state's department of revenue to learn more.

Thursday, June 28, 2018

If / Then Scenarios for Taxpayers Who Get Phished



The IRS reminds taxpayers that the agency does not initiate contact with taxpayers by email or text messages to request personal or financial information. This includes requests for PIN numbers, passwords or similar information for credit cards, banks and other financial accounts.
This is important for everyone to remember because thieves often pose as the IRS to get taxpayers to turn over personal information in a scam called phishing. Phishing is typically carried out through unsolicited emails or websites.
Here’s what a taxpayer should do if they see a suspicious communication from the IRS:
  • Email
    If Someone receives an email claiming to be from the IRS that contains a request for personal information…
    Then the recipient should:
  1. Not reply.
  2. Not open any attachments. They can contain malicious code that may infect a computer or mobile phone.
  3. Not click on any links.
  4. Forward the email as-is to the IRS at phishing@irs.gov.
  5. Delete the original email.
  • Website
    If someone discovers a website that claims to be the IRS but the user suspects it is bogus…
    Then they should:
  1. Send an email with the URL of the suspicious site to phishing@irs.gov.
  2. Include a subject line of “suspicious website.”
  • Text Message
    If someone receives an unsolicited text message claiming to be from the IRS…
    Then the recipient should:
  1. Not reply.
  2. Not open any attachments.
  3. Not click on any links.
  4. Forward the text as-is to the IRS at 202-552-1226. Standard text messaging rates apply.
  5. If possible, in a separate text, forward the originating number to the agency at 202-552-1226.
  6. Delete the original text.
If someone clicks on a link in a phishing email or text, or on a site they believe is bogus, they can visit the identity protection page for more information on steps to take to protect their information.
Share this tip on social media -- #IRSTaxTip: If / Then Scenarios for Taxpayers Who Get Phished https://go.usa.gov/xUq7V

Thursday, June 7, 2018

With hurricane season underway, IRS warns of scams related to natural disasters


WASHINGTON ― With hurricane season underway, the Internal Revenue Service is reminding taxpayers that criminals and scammers often try to take advantage of the generosity of taxpayers who want to help victims of major disasters.
Hurricane season runs June 1 to Nov. 30, and taxpayers need to be vigilant of scams that will undoubtedly pop up when and if a hurricane occurs during that time.
Fraudulent schemes normally start with unsolicited contact by telephone, social media, e-mail or in-person using a variety of tactics.
  • Some impersonate charities to get money or private information from well-intentioned taxpayers.

  • Bogus websites use names similar to legitimate charities to trick people to send money or provide personal financial information.

  • They even claim to be working for or on behalf of the IRS to help victims file casualty loss claims and get tax refunds.

  • Others operate bogus charities and solicit money or financial information by telephone or email.
Help for disaster victims
Disaster victims can call the IRS toll-free disaster assistance telephone number (866-562-5227). Phone assistors will answer questions about tax relief or disaster-related tax issues. Details on available relief can be found on the disaster relief page on IRS.gov.
Donate to real charities
To help taxpayers donate to legitimate charities, the IRS website, IRS.gov, has a search feature, Tax Exempt Organization Search, that helps users find or verify qualified charities. Donations to these charities may be tax-deductible.
  • Contribute by check or credit card, never give or send cash, to have a record of the tax-deductible donation.

  • Don’t give out personal financial information — such as Social Security numbers or credit card and bank account numbers and passwords — to anyone who solicits a contribution.
Taxpayers suspecting fraud by email should visit IRS.gov and search for the keywords “Report Phishing.” More information about tax scams and schemes may be found at IRS.gov using the keywords “scams and schemes.”

Friday, March 9, 2018

IRS: Refunds worth $1.1 billion waiting to be claimed by those who have not filed 2014 federal income tax returns


WASHINGTON ―Unclaimed federal income tax refunds totaling about $1.1 billion may be waiting for an estimated 1 million taxpayers who did not file a 2014 federal income tax return, according to the Internal Revenue Service.
To collect the money, these taxpayers must file their 2014 tax return with the IRS no later than this year's tax deadline, Tuesday, April 17.
"We’re trying to connect a million people with their share of $1.1 billion in unclaimed refunds for 2014,” said Acting IRS Commissioner David Kautter. “Time is running out for people who haven’t filed tax returns to claim their refunds. Students, part-time workers and many others may have overlooked filing for 2014. And there’s no penalty for filing a late return if you’re due a refund.”
The IRS estimates the midpoint for the potential refunds for 2014 to be $847; half of the refunds are more than $847 and half are less.
In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury. For 2014 tax returns, the window closes April 17, 2018. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by that date.
The IRS reminds taxpayers seeking a 2014 tax refund that their checks may be held if they have not filed tax returns for 2015 and 2016. In addition, the refund will be applied to any amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans.
By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2014. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2014, the credit was worth as much as $6,143. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2014 were:
  • $46,997 ($52,427 if married filing jointly) for those with three or more qualifying children;
  • $43,756 ($49,186 if married filing jointly) for people with two qualifying children;
  • $38,511 ($43,941 if married filing jointly) for those with one qualifying child, and;
  • $14,590 ($20,020 if married filing jointly) for people without qualifying children.
Current and prior year tax forms (such as the tax year 2014 Form 1040, 1040A and 1040EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676).
Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2014, 2015 or 2016 should request copies from their employer, bank or other payer. Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. Alternatively, they can file Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498, and IRA contribution Information. Taxpayers can use the information on the transcript to file their tax return.
State-by-state estimates of individuals who may be due 2014 income tax refunds 
State or District
Estimated
Number of
Individuals
Median
Potential
Refund
Total
Potential
Refunds*
Alabama
17,700
$836
$18,302,700
Alaska
4,500
$898
$5,263,200
Arizona
23,800
$750
$23,496,700
Arkansas
9,500
$808
$9,726,900
California
93,600
$785
$95,745,100
Colorado
20,400
$796
$20,887,500
Connecticut
11,000
$934
$12,740,100
Delaware
4,000
$883
$4,378,400
District of Columbia
3,000
$850
$3,237,700
Florida
69,800
$865
$74,040,300
Georgia
34,800
$772
$35,006,000
Hawaii
6,200
$898
$6,830,900
Idaho
4,500
$723
$4,376,100
Illinois
39,500
$895
$43,600,000
Indiana
22,700
$878
$24,353,000
Iowa
10,500
$885
$11,083,400
Kansas
11,100
$852
$11,645,300
Kentucky
13,600
$848
$14,035,100
Louisiana
19,900
$846
$21,700,800
Maine
4,000
$804
$3,941,700
Maryland
21,800
$853
$23,773,000
Massachusetts
22,800
$935
$26,018,500
Michigan
34,100
$845
$36,505,700
Minnesota
15,800
$785
$15,832,600
Mississippi
10,200
$777
$10,291,100
Missouri
23,000
$797
$23,212,400
Montana
3,500
$808
$3,617,700
Nebraska
5,600
$806
$5,629,100
Nevada
12,000
$831
$12,663,200
New Hampshire
4,600
$917
$5,169,500
New Jersey
28,600
$928
$32,452,500
New Mexico
7,800
$831
$8,472,600
New York
53,600
$913
$60,135,600
North Carolina
30,800
$791
$30,659,900
North Dakota
3,000
$952
$3,433,300
Ohio
38,100
$826
$38,956,700
Oklahoma
17,200
$855
$18,366,800
Oregon
15,100
$747
$14,816,600
Pennsylvania
39,300
$907
$42,866,100
Rhode Island
2,900
$916
$3,217,200
South Carolina
12,000
$757
$12,023,400
South Dakota
3,000
$866
$3,075,300
Tennessee
20,300
$837
$20,967,500
Texas
108,100
$899
$121,956,100
Utah
7,800
$754
$7,831,300
Vermont
2,100
$816
$2,028,600
Virginia
27,800
$828
$29,345,300
Washington
27,000
$894
$30,423,900
West Virginia
5,200
$914
$5,875,100
Wisconsin
13,400
$774
$13,041,800
Wyoming
3,000
$973
$3,556,300
Totals
1,043,600
$847
$1,110,605,600

* Excluding the Earned Income Tax