The IRS continues to urge taxpayers who haven’t yet done a “Paycheck Checkup” to do one as soon as possible to see if they’re having their employer withhold the right amount of tax after major changes in the tax law. Tax prepare-er can can help taxpayers learn if they need to make changes soon to avoid an unwelcome surprise come tax time.

This week, the IRS is focusing on some groups of taxpayers who should especially check their withholding.

Please help us get the word out — the earlier people check and adjust their withholding, the more time there is for withholding to take place evenly during the rest of the year.

Taxpayers that fall in the following groups should contact their tax prepareer as soon as possible for a “Paycheck Checkup”:

• Taxpayers who got a big refund in 2018
• Taxpayers with high income or complex return
• Taxpayers who support dependents who can’t be claimed for the Child Tax Credit
• Taxpayers with children, other dependents

To schedule your “Paycheck Checkup” contact me today at 580.743.8118

 

For those of you that travel for work such welders, linemen, etc., I’m sure that you all are experiencing anxieties over what is going to happen concerning your reimbursed job expenses that are being eliminated with the Tax Reform & Jobs Act.

Well, I have an idea and I think and I can help you. Call me if you are interested in finding out more! 580.743.8118

 

The following article was written by Kelly Phillips Erb , FORBES STAFF   

https://www.forbes.com/sites/kellyphillipserb/2017/12/20/what-your-itemized-deductions-on-schedule-a-will-look-like-after-tax-reform/#14f8528e6334

 

With all of the focus on new tax rates after Congress green-lighted tax reform (you can see those new rates here), it’s easy to forget that some of the biggest changes don’t have anything to do with tax rates: They’re about deductions.

For 2018, the standard deduction amounts will increase from $6,500 for individuals, $9,550 for heads of households (HOH), and $13,000 for married couples filing jointly, to $12,000 for individuals, $18,000 for HOH, and $24,000 for married couples filing jointly. Most taxpayers will claim the standard deduction.

Initially, the change in the standard deduction amounts was meant to simplify the deduction scheme. In other words, most of the itemized deductions would have simply disappeared, leaving behind (initially) the charitable donation deduction and the home mortgage interest deduction. Over the past few weeks, however, those itemized deductions – those found on a Schedule A – have been tweaked.

Here’s how Schedule A will be affected for the 2018 tax year following tax reform (numbers correspond to the numbers in the blue circles on Schedule A – click on the image above to be taken to a larger version):

1. Medical and Dental Expenses. Medical and dental expenses remain in place with a lower floor. We call it the “floor” because you can only deduct expenses over that number. The floor – before tax reform – was 10% of your adjusted gross income (AGI). Here’s how it worked. Let’s say your AGI is $40,000 and your medical expenses were $5,000. Assuming you itemized, you could claim $1,000 as a deduction, or $5,000 in expenses less the floor (10% x $40,000 = $4,000).

Under tax reform, the 7.5% floor is back in place for two years beginning January 1, 2017 – that means that it applies to the 2017 tax year. So assuming the same facts above, you can claim $2,000 as a deduction, or $5,000 in expenses less the floor (7.5% x $40,000 = $3,000).

Again, unlike most of the provisions in the bill, the provision is effective retroactively to the beginning of this year – so you’ll see this change on your 2017 and your 2018 tax returns.

2. State and Local Taxes. Under tax reform, deductions for state and local sales, income, and property taxes normally deducted on a Schedule A remain in place but are limited (see #3 below). Foreign real property taxes may not be deducted under this exception.

3. SALT caps. While SALT deductions remain in place, there is a cap on the aggregate, meaning that the amount that you are claiming for all state and local sales, income, and property taxes together may not exceed $10,000 ($5,000 for married taxpayers filing separately).

State, local, and foreign property taxes, and sales taxes which are deductible on Schedule C, Schedule E, or Schedule F are not capped. This means that, for example, rental property – even if held individually and not in a separate entity – remains deductible and not subject to these limitations.

And yes, Congress already knows what you’re planning, so amounts paid in 2017 for state or local income tax which is imposed for the 2018 tax year will be treated as paid in 2018. In other words, you can’t pre-pay your 2018 state and local income taxes in 2017 to avoid the cap. There is not, to date, a similar restriction for property taxes.

4. Home Mortgage Interest. So, first, the home mortgage interest deduction didn’t disappear. But it did get modified. Here’s what you need to know. First, the definition of acquisition indebtedness is important: It’s indebtedness that is incurred in acquiring, constructing, or substantially improving a qualified residence of the taxpayer and which secures the residence. Home equity indebtedness is indebtedness other than acquisition indebtedness that is secured by a qualified residence. Those distinctions are important (more in a moment) no matter what they’re called by you or by the bank.

As of December 15, 2017, there’s a limit on acquisition indebtedness – your mortgage used to buy, build or improve your home – of $750,000 ($375,000 for married taxpayers filing separately). For mortgages taken out before December 15, 2017, the limit is $1,000,000 ($500,000 for married taxpayers filing separately). It’s even more complicated because beginning in 2026, the cap goes back up to $1,000,000, no matter when you took out the mortgage.

And here’s where that definition is super important: For tax years 2018 through 2025, there is no deduction available for interest on home equity indebtedness.

5. Charitable donations. Charitable donations remain deductible under tax reform. The rules are largely the same with a few changes. First, the percentage limit for charitable for cash donations by an individual taxpayer to public charities and certain other organizations increases from 50% to 60%. Two, taxpayers are no longer entitled to deduct payments made to a college or college athletic department (or similar) in exchange for college athletic event ticket or seating rights at a stadium. Those provisions are effective beginning in 2018.

Effective beginning in 2017, the provision which allows for an exception to the substantiation rule if the donee organization files a return is repealed. What this means to taxpayers: Always get a receipt.

And if you follow me on Twitter, you already know that for some inexplicable reason, the charitable standard mileage rate will not be adjusted for inflation under tax reform. It remains at a disappointing 14 cents per mile (for other mileage rates, click here).

6. Casualty and Theft Losses. The deduction for personal casualty and theft losses is repealed for the tax years 2018 through 2025 except for those losses attributable to a federal disaster as declared by the President (generally, this is meant to allow some relief for victims of Hurricanes Harvey, Irma, and Maria).

For more on casualty losses after a disaster, click here.

7. Job Expenses and Miscellaneous Deductions subject to 2% floor. Miscellaneous deductions which exceed 2% of your AGI will be eliminated for the tax years 2018 through 2025. This includes deductions for unreimbursed employee expenses and tax preparation expenses. To be clear, it includes expenses that you incur in your job that are not reimbursed, like tools and supplies; required uniforms not suitable for ordinary wear (like those ABBA costumes); dues and subscriptions; and job search expenses. These expenses also include unreimbursed travel and mileage, as well as the home office deduction.

Please note that the elimination of unreimbursed employee expenses only affects taxpayers who claim an employee-related deduction on Schedule A. If, as a business owner, you typically file a Schedule C, your business-related deductions are not affected by the elimination of Schedule A deductions.

8. Itemized Deductions. The overall limit on itemized deductions is suspended for the tax years 2018 through 2025.

Believe it or not, it’s that time again! There’s only 41 days left before the filing deadline for your Form 1099 and W2’s ( as well as Forms 1098). No need to sweat or search any farther. Let us help you! We handle both filing and mailing these forms for you, and have e-file capabilities. Read on for more details from the IRS about filing requirements or call us at 580.743.8118

Am I Required to File a Form 1099 or Other Information Return?

If you made or received a payment during the calendar year as a small business or self-employed (individual), you are most likely required to file an information return to the IRS. This page is applicable to specific and limited reporting requirements. For more detailed information, please see General Instructions for Certain Information Returns or specific form instructions.

Do not file Copy A of information returns downloaded from the IRS website. The official printed version of the IRS form is scannable, but the online version of it, printed from the website, is not. A penalty may be imposed for filing forms that cannot be scanned.

Made a Payment
Received a Payment and Other Reporting Situations
Not Required to File Information Returns

Made a Payment

If, as part of your trade or business, you made any of the following types of payments, use the link to be directed to information on filing the appropriate information return.

• Payments, in the course of your trade or business: (1099-MISC) (Note: It is important that you place the payment in the proper box on the form. Refer to the instructions for more information.)
  • Services performed by independent contractors or others (not employees of your business) (Box 7)
  • Prizes and awards and certain other payments (see Instructions for Form 1099-MISC, Box 3. Other Income, for more information)
  • Rent (Box 1)
  • Royalties (Box 2)
  • Backup withholding or federal income tax withheld (Box 4)
  • Crewmembers of your fishing boat (Box 5)
  • To physicians, physicians’ corporation or other supplier of health and medical services
    (Box 6)
  • For a purchase of fish from anyone engaged in the trade or business of catching fish (Box 7)
  • Substitute dividends or tax exempt interest payments and you are a broker (Box 8)
  • Crop insurance proceeds (Box 10)
  • Gross proceeds of $600 or more paid to an attorney (generally, Box 7, but see instructions as Box 14 may apply)
• Interest on a business debt to someone (excluding interest on an obligation issued by an individual) (1099-INT)
• Dividends or other distributions to a company shareholder (1099-DIV)
• Distribution from a retirement or profit plan or from an IRA or insurance contract (1099-R)
• Payments to merchants or other entities in settlement of reportable payment transactions, that is, any payment card or third party network transaction (1099-K)

Received a Payment and Other Reporting Situations

If, as part of your trade or business, you received any of the following types of payments, use the link to be directed to information on filing the appropriate information return.

• Payment of mortgage interest (including points) or reimbursements of overpaid interest from individuals (1098)
• Sale or exchange of real estate (1099-S)
• You are a broker and you sold a covered security belonging to your customer (1099-B)
• You are an issuer of a security taking a specified corporate action that affects the cost basis of the securities held by others (Form 8937)
• You released someone from paying a debt secured by property or someone abandoned property that was subject to the debt (1099-A) or otherwise forgave their debt to you (1099-C)
• You made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment (1099-MISC)

Not Required to File Information Returns

You are not required to file information return(s) if any of the following situations apply:

• You are not engaged in a trade or business.
• You are engaged in a trade or business and
  • the payment was made to another business that is incorporated, but was not for medical or legal services or
  • the sum of all payments made to the person or unincorporated business is less than $600 in one tax year

https://www.irs.gov/businesses/small-businesses-self-employed/am-i-required-to-file-a-form-1099-or-other-information-return

No…I didn’t think so. But the good news is:

I did.

So if you’re ready to get back to the business of your business, call me. 580.743.8118