Refund Amounts – Did You Know?
If your refund amount is different than stated on the filed tax return, part or all of your refund may have been used to pay off (offset) past-due federal tax, student loans, state income tax or other past-due debts.
You’ll receive a notice from the IRS if such an offset occurs that will show the original tax refund amount, the offset amount, as well as the name, address and telephone number of the agency receiving the payment.
If you have not received your refund yet, you may check the status using the tool at: https://www.irs.gov/refunds. The ‘Where’s my Refund’ tool is updated once daily, usually overnight. Your status is generally available within 24 hours upon the IRS receiving your e-filed return and 4 weeks after mailing your paper return.
Federal Tax Extensions – Did You Know?
If you file for an extension on your federal income tax return, you have until Oct 15th, 2019 file your taxes, but you still have to pay any taxes due by April 15th, 2019 to avoid penalty and interest charges.
Tax Related ID Theft – Did You Know?
Tax related ID theft is when someone uses your information (name, SSN, etc.) to file a false tax return and claim a fraudulent refund. The number one thing you can do to prevent this type of ID theft is to file early and file electronically. The IRS is “first-come, first-served”, meaning whomever files first, electronically, will be the only electronic return accepted. All others for that SSN will be blocked and have to file manually. This can lead to big delays for your refund. Filing season began January 28 this year.
Second Home, Cabin, and Vacation Property Owners – Did You Know?
If you own a second home or vacation property that you live in only occasionally and rent out at other times, you might be able to deduct expenses you pay to maintain the property from your rental income. In addition, you might be able to classify the home as investment property instead of personal property, which offers multiple tax and estate-planning benefits.
In order to fully qualify to deduct expenses and/or designate the home or cabin as investment property, you must meet one of the following two requirements:
1. You use the property as a dwelling for no more than 14 days per year AND rent it out for at least 15 days per year.
2. You use the property as a dwelling for more than 14 days per year but not more than 10% of the number of days you rent it out. For example, if you rent out the home for 200 days a year, you may use it as a dwelling for up to 20 days.
Please note that under IRS rules, “using as a dwelling” includes not only using the home yourself, but also offering use of the home to friends, family, anyone with a financial interest in the property, or anyone who pays less than a fair rental price.
Tax Credits vs. Deductions – Did You Know?
Tax credits directly reduce the amount of tax you owe, reducing the dollar amount of your tax liability. If you receive a tax credit of $500, that lowers your taxes owed by $500. Tax credits can also be refundable such as the EITC and CTC where, if the credit is more than what you owe, you may receive a refund check.
Tax deductions reduce how much of your income is subject to taxes. If you made $60,000 in a tax year and got a $500 tax deduction, your tax bill would be calculated based on an income of $59,500.
Refund Amounts – Did You Know?
If your refund amount is different than stated on the filed tax return, part or all of your refund may have been used to pay off (offset) past-due federal tax, student loans, state income tax or other past-due debts.
You’ll receive a notice from the IRS if such an offset occurs that will show the original tax refund amount, the offset amount, as well as the name, address and telephone number of the agency receiving the payment.
If you have not received your refund yet, you may check the status using the tool at: https://www.irs.gov/refunds.
New State Tax Filing Rules Under TCJA – Did You Know?
Historically, many states have closely modeled their income tax regulations after federal laws, allowing taxpayers to complete state returns very quickly after filing their federal forms. However, some states have not yet updated their forms and rules to comply with the sweeping federal tax code changes introduced under the 2017 Tax Cuts and Jobs Act (TCJA). As a result, in addition to any impact it has on your federal taxes, the TCJA might significantly affect procedures for filing your 2018 state tax return.
You may need to provide additional information and documentation not required for your federal returns. You may also be able to claim deductions at the state level that are no longer allowed on IRS forms, or find that certain deductions created under the TCJA cannot be claimed on your state return.
Increased Standard Deduction for Seniors – Did You Know?
If you were born before January 2, 1954, you may qualify to increase the standard deduction on your 2018 federal tax returns by as much as $1,600 (or $2,600 for joint filers). Because your standard deduction reduces your taxable income, a larger deduction means a lower tax bill.
Your eligibility for the increased standard deduction depends on your age, your spouse’s age, your filing status, your citizenship/residency status, and other factors. A tax professional can help you determine whether you qualify, and show you how to claim the full deduction you are allowed.
New Tax Bill Standard Deductions – Did You Know?
For those that opt to take the standard deduction on their taxes rather than itemized deductions, the Tax Cuts and Jobs Act (TCJA) increases the amount you can deduct until 2025, when the provision is set to expire.
The amount goes from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for those filing jointly.
Taxpayer Bill of Rights – Did You Know?
As a taxpayer, you have a set of ten fundamental rights that the IRS is obligated to protect.
They are:
1. The Right to be Informed.
2. The Right to Quality Service.
3. The Right to Pay No More Than the Correct Amount of Tax.
4. The Right to Challenge the IRS’s Position and Be Heard.
5. The Right to Appeal an IRS Decision in an Independent Forum.
6. The Right to Finality.
7. The Right to Privacy.
8. The Right to Confidentiality.
9. The Right to Retain Representation.
10. The Right to a Fair and Just Tax System.
More information can be found in IRS Publication 1: Your Rights as a Taxpayer, available here: https://www.irs.gov/pub/irs-pdf/p1.pdf.