Starting January 3, 2018 we will resume our January tax season office hours, Monday thru Friday 9:00AM to 5:00PM. Starting February 1, 2018 to April 14, 2018 someone will be in our office Monday thru Friday 9:00AM to 7:00PM. After April 15, 2018 to December 31, 2018 our office hours are Monday thru Thursday 9:00AM to 5:00PM. Our Tax Professionals are available by appointment only.
Advanced notice – Denise will be out of the office for a tax conference August 6, 2018 to August 12, 2018.
From our official greeter “Boomer”
Boomer here! I hope everyone had a fantastic summer. I know I did. Mom and Dad took me on a camping vacation to Niagara Falls NY in October. Wow so cool and so huge. I got some nice rest and relaxation to get ready for the upcoming busy tax season! Mom snuck a picture of me while I was relaxing. I love going on vacation, but I did miss the girls at the office and was excited to get back home to see them!
Speaking of the girls, did you know Barb has been with us for 2 years this past September! Mom took the girls out for ice cream at the Creamery to celebrate Barb’s anniversary. We are so lucky to have Barb onboard at Main Street, especially since she shares her carrots with me at lunchtime. Next time you come in, be sure to wish both Barb and Sarah a Happy Anniversary!
On the serious side, don’t forget to watch out for all those bad people who want to steal your identity. Because of how important it is to protect yourself, Sarah recently updated our security information and dedicated a whole section to it. Go to the column which says “Security Awareness” on the main screen and you will see “Identity Theft” and “Scams & Security”. The “Identity Theft” section explains what you should do if you suspect a bad person has stolen your identity. The “Scams & Security” section has lots of really good ideas on how to protect yourself from those bad people who want to steal your identity. Please be sure to read through this and don’t hesitate to share with family, neighbors and friends. If you have any questions you can call me, but I would suggest you call Mom, Sarah or Barb.
A reminder to our clients, feel free to let others know how you feel about Main Street’s services and staff by leaving a testimonial. On Main Street’s web site, simply click on “Contact” and “Share Testimonial” and fill out the form.
Well, I better let you go so you can take a look at our web site. The most important changes are under Security Awareness the other information is strictly updating the amounts or limits for the upcoming filing season and 2018 year. If you do have any questions on anything noted on our web site you can always ask me, but I think my Mom, Barb or Sarah might have a lot better answers for you.
I hope you and your family have a Happy Holiday and safe winter! Wishing all of you good health, happiness, and prosperity in the New Year. Looking forward to seeing you real soon!!
Hugs and Love, Boomer
With the filing season ahead of us the following is a list of items mandated by the government and will be needed every year we file your income tax returns:
- Bank Account Verification Form signed and dated – Under “Worksheets & Forms” on our web site you will find the bank verification form. If you want your refund directly deposited into your bank account or your income tax balance due or estimated tax payments withdrawn from your bank account, we will need this form completed by you and if filing a joint return, by your spouse.
- Copy of your driver’s license and if filing a joint return, a copy of your spouse’s driver’s license.
- Children under the age of 17 – we will need verification your child lived under your roof for the year. We will need a document dated 2017 which will note the child’s name along with your name as parent and your address. An example would be school records, medical bills, health insurance bills, etc. We should be able to use any document dated 2017 as long as the document notes these three items: child’s name, your name or your spouse’s name and the address where the child lives.
- If your child is attending college – we will need the Form 1098T and full year account statement from the college noting student’s name, amounts billed and payments received.
- Form 1095 (health insurance coverage) will be needed to file your 2017 income tax return.
DID YOU KNOW THE IRS COULD HAVE YOUR PASSPORT TAKEN AWAY FROM YOU?
The Internal Revenue Service (IRS) doesn’t have control over passports. The State Department doesn’t generally have access to taxpayer information because of privacy laws. To bridge the two, the law now requires the IRS to advise the State Department about seriously delinquent taxpayers. The State Department may then refuse to issue or renew a passport for a seriously delinquent taxpayer. The Secretary of State is also permitted to revoke any passport previously issued to a seriously delinquent taxpayer.
For purposes of the new law, a seriously delinquent tax debt is defined as “an unpaid, legally enforceable federal tax liability” greater than $50,000 which includes interest and penalties. The $50,000 limit will be adjusted each year for inflation and cost of living. The limit is not per year; it is the total tax debt.
There are some exceptions under the law. Tax debt which is being timely paid as part of an installment agreement or under an Offer in Compromise doesn’t count. It also does not include any tax debt for which a Collection Due Process hearing is timely requested in connection with a levy or a debt where the collection has been suspended due to an innocent spouse claim.
If you are seriously delinquent under the new law, the IRS is required to notify you in writing at the time that it certifies the debt to the State Department. The State Department will then hold your passport application or renewal for 90 days to allow you to resolve any errors, make full payment, or enter into a satisfactory payment plan. There is no grace period for resolving your debt before the State Department revokes an existing passport.
To get off the list, you must prove that the debt is fully satisfied, is legally unenforceable or is not a seriously delinquent tax debt under the statute (in case you’re wondering, that does not include debt that dips below $50,000 – once you’ve hit that threshold, you must either pay it down or meet one of the other criteria).
PA DRIVER’S LICENSE – FEDERAL REAL ID ACT:
Under another law federal agencies cannot accept driver’s licenses and identification cards issued by states that do not meet certain standards. PA is currently one of those states. PA is under a REAL ID enforcement grace period until October 10, 2017, which means that PA residents will not face access issues when entering federal facilities through that date.
Under the federal REAL ID Act, beginning January 22, 2018, residents in states which have not come into compliance with federal requirements or obtained an extension will need to show an alternative form of identification such as a passport at airports and when accessing federal buildings and military bases. Penn DOT anticipates the U.S. Department of Homeland Security will continue to issue extensions to Pennsylvania until REAL ID products are available for residents. Under SB 133, no Pennsylvania resident will be required to get a REAL ID-compliant driver license or identification card, but residents who choose to do so will be able to use those forms of identification when the new federal requirements go into effect.
System, building infrastructure and process changes will be necessary for Pennsylvania to issue REAL ID-compliant products. Work will begin immediately and Penn DOT estimates REAL ID compliant driver licenses and identification cards will be available by March 2019. This will allow ample time for customers who want a REAL ID product to get one before the final DHS effective date of October 1, 2020.
DO YOU OWE THE FEDERAL GOVERNMENT MONEY?
Congress passed legislation requiring the IRS to use private collection agencies to assist in collecting certain overdue tax accounts. The law does include strong protection of taxpayer rights and the taxpayer’s privacy must be fully maintained. Confidentiality requirements and restrictions required by law will be strictly enforced. If the taxpayer does not wish to work with an assigned private collection agency to settle their overdue tax account, they must submit a request in writing to the private collection agency. The Private Agencies cannot take any type of enforcement action against you to collect this debt; like filing a Federal Tax Lien or issuing a levy. Remember the IRS does have the legal authority to take these types of enforcement actions to collect an overdue account.
How will you know if your account was turned over to one of the Private Agencies? You will first receive a notice from IRS stating your overdue account was assigned to a private collection agency. You will then receive a notice from the private collection agency. You need to save both of these notices. Because of identity theft issues the notices will include numbers which both you and the private collection agency will use to identity each other. The four Private Collection Agencies selected are; CBE Group, Conserve, Performant, and Pioneer. If you are one of our clients the most important item to remember is if you receive the notice from IRS, you contact us.
BUSINESS DUE DATES FOR W-2 AND 1099 FORMS
January 31, 2018 is the deadline for filing your 2017 W-2 forms and 1099 forms. Helpful hint related to the 1099 filing – Prior to anyone doing any work for your rental or your business you should request the supplier/vendor to complete a W-9 form. This would also include any supplier/vendor you rent equipment or property from. At the end of the year you can add up what you paid to those suppliers/vendors who you need to send a 1099 to. Enter the amount you paid to the vendor on the top of their signed Form W-9 and fax it to us. For the upcoming year we will need the information on or before January 13, 2018 so we can meet the deadline. If you are audited, we have been told the Internal Revenue Service now wants to see both the 1099MISC form you filed to the supplier/vendor and their signed Form W-9. In 2016 the penalty for “Failure to File” the 1099 forms was increased to $260.00 for each 1099 missed. Please go to the “Worksheets & Forms” section of our web site and read the 1099 Instruction Sheet, which will give you additional information on who you should be sending a Form 1099 to.
TUITION (FORM 1098-T) AND BILLING STATEMENTS
If you have a child attending college we will need the 1098T from the college (this will be in your child’s name). We will also need the tuition and fees billing statements from the college for the full calendar year. We want to be sure we are not missing any qualified expenses. You may have to go on the school’s web site to retrieve the billing statements. The information will most likely be in the student’s name. The student most likely will have access to this information. Tax preparers are mandated by IRS to verify the numbers we enter on your return. The only way for us to verify this information is to review the billing account statement for the calendar and Form 1098T.
BEFORE BAD WEATHER AND DISASTER STRIKES – BE PREPARED!
Being prepared for the worst is always a good idea. Your plan shouldn’t only include bottled water, batteries and candles— but also your financial and family documents. While putting together your emergency kit, don’t neglect your financial kit:
- Store copies of important documents either in a safety deposit box at the bank or in a weather-proof box at home.
- Another option would be to put PDF copies on a password-protected USB drive or in cloud storage.
- Have accessible copies of insurance documents and contacts, bank statements, credit card bills, family records (birth, marriage, and death certificates), photocopies of credit and identification cards (e.g., passports, driver’s licenses), all tax records and any supporting documents.
- Take inventory of your home (and business) by photographing or videotaping all of the items inside and out. When taking inventory, also make it a habit to back up your computer, especially if you store important documents and pictures on it.
DONATING TO CHARITY
If you support certain causes throughout the year, your gift might be tax deductible and reduce any tax you owe. If you want to claim a tax deduction for your charitable donations, you must itemize your deductions. Also, the donations must meet certain requirements to qualify for a deduction.
- Qualified Charities: You can only deduct donations to qualified charities. Qualified charities meet exemption requirements under the IRS Tax Code 501(c)(3). The nonprofit organization is exempt from federal income tax if its activities have the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports competition or preventing cruelty to children or animals.
- Monetary Donations: Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return.
- Household Goods: Donated used clothing and used household items generally must be in at least good used condition to be claimed as a tax deduction. If you claim a deduction of over $500 for an item, it doesn’t have to meet this standard as long as you include a qualified appraisal of the item with your tax return. Be sure to list all of the items you are donating. Taking pictures of your items might be helpful.
- Records Required: You must get an additional acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. Additional rules apply to the statement for gifts of that amount. This statement is in addition to the records required for deducting cash gifts.