440-989-2570 genesisacct@yahoo.com
Tax Cuts And Jobs Act

Tax Cuts And Jobs Act

As you know, the “Tax Cuts and Jobs Act” (ACT) was passed which affects every taxpayer for 2018 through 2025. This Act is the greatest tax cut in our lifetime with more than 130 new tax provisions which has changed the landscape of filing tax returns. We have incurred many hours studying and researching the new Act. A few important provisions of the Act affecting the majority of taxpayers are:

Taxpayers will see quite a different form “look.” The IRS and the Treasury Department implied 2018 returns will comprise of fewer pages and take less time to prepare. This is NOT the case! It will take longer to prepare with up to six (6) more pages added to the return. Where did the simplification go?;

Taxpayers who itemized in the past may find it advantageous to use the NEW standard deduction this year. The 2018 standard deduction for Married Filing Jointly and Surviving Spouses is $24,000 and a Single and Married Filing Separate taxpayer is $12,000. Personal exemptions are no longer available as this number, in theory, is included in the NEW standard deduction. However, you will need to provide us with any addition to the family OR removal of a dependent. If you itemized in the past, continue to gather those deductions this year (being a transition year) and we can determine which deduction is to your tax advantage…taking the new standard deduction or continue to itemize;

The tax rates were lowered for every taxpayer, including corporations;

Independent over-the-road truck drivers and traveling salespeople (as an employee) will no longer be permitted to deduct their meals, lodging, travel, and auto expenses. We would suggest to contact your employer and ask for financial consideration to cover some or all of the lost deductions;

IMPORTANT: Please bring your invoices on ALL equipment purchased. For an asset purchased from an individual, a copy of your check is needed. Equipment traded is no longer a “trade-in,” but is a “sale” and a gain/loss is calculated. However, the newly acquired asset receives a higher depreciable basis;

Larger tax credits for children, e.g., doubling the child tax credit from $1,000 to $2,000;

State and local income taxes and real estate taxes are still deductible, but are now limited to $10,000 for married taxpayers or $5,000 for married filing separate who itemize; and

Taxpayers who are engaged in a trade or business, including partnerships and S Corporations, with a profit are eligible for a NEW 20% DEDUCTION subtracted from your taxable income. The 20% deduction computation is complex; however the tax savings can be substantial. Since the 20% deduction calculation is complicated and requires additional time, you can anticipate some additional preparation costs.

Also, please bring your driver’s license and spouse’s, if applicable, (or copy) with you.

Annual Tax Meeting With Your Accountant

Annual Tax Meeting With Your Accountant

Courtesy of NATP

Annual Tax Meeting With Your Accountant

With the filing season quickly approaching, it is important for you to contact your tax professional early to reserve a convenient time for your appointment. Your tax return can be done more accurately and in a shorter period of  time if all of the information is available at the initial appointment, so being organized can help both you and your tax preparer. Start preparing early for your tax appointment by compiling a list of the documents you expect to receive based on last year’s statements and this year’s activities. If you are not sure of what documents you may need, call your tax preparer to discuss.

As you start receiving your documents in the mail (usually around the end of January), mark them off your list and put them in a tax folder with the list to stay organized. If employed, you will need to include your W-2. If you received income from interest, dividends, pensions, self-employment, government payments or the sale of property, you will receive a Form 1099. It is helpful to bring the actual statements to your appointment. Remember that not all forms will look alike; be sure to check the bottom of year-end statements that may be substitute 1099s. Also, don’t forget to include any Schedule K-1s you receive from a partnership, an S corporation, trust or estate. If you had any income not reported on the forms listed above, make a note for your tax preparer to include it.

If you sold stock during the year, you will receive a 1099-B as described above that includes the gross proceeds. However, the price you paid for the stock, the cost basis, may not listed on the1099-B. If the stock was received as a gift or inheritance, other means of determining the cost will be necessary. For every stock you sold, you should include the basis for your tax professional to calculate the net gain/loss. If you own a home, it is possible that you can itemize deductions. Each year, bring the property tax bill and the mortgage interest statement to your tax appointment. Medical expenses are deductible if they exceed 10% of your adjusted gross income (AGI). Prescription drugs, doctor, dental, hospital bills, and medical insurance premiums. Charitable contributions are a good source of deductions. Contributions can be cash, property or out-of-pocket expenses you paid to do volunteer work.

How Will You Be Contacted By The IRS…

How Will You Be Contacted By The IRS…

Courtesy of NATP

Don’t Be Fooled by Fake IRS Emails, Letters or Phone Calls

Every year, taxpayers are bombarded with emails, letters and phone calls claiming to be from the IRS and asking for personal information. The subject titles on many of these emails suggest the IRS is trying to contact you because they have a refund for you. These are commonly referred to as phishing scams. Phishing is a term used to describe emails that are “fishing for information” and “hooking” victims. The content of these messages “lure” readers into believing that the IRS needs information from them.

The IRS has issued several recent consumer warnings on the fraudulent use of the IRS name or logo by scammers trying to gain access to consumers’ financial information in order to steal their identity and assets through emails and letters. These scam messages are used to trick readers into providing sensitive information. Fraudsters typically request bank information or credit card numbers so readers can pay their tax due or receive their refunds. Unsuspecting persons are now victims of identity theft. What do you need to know to keep safe? The IRS will never request financial information, passwords, PINs or any other sensitive information from you via email.

The IRS sends paper notices to taxpayers to discuss tax account information. Never provide your bank information to someone via email. If you ever receive one of these phishing emails, do not reply. Do not open any attachments they might contain malicious code that could infect your computer. Also, do not click any links provided in the email. These websites could also give your computer a virus or malware. Additionally, the IRS will not contact you by telephone with threats to file a lawsuit against you. If the IRS has questions or concerns about your tax return (s), you will receive a letter explaining the matter. If you receive such a phone call, do not entertain a conversation with the scammer, simply hang up.

If you have any questions or concerns about any contact, feel free to reach out to us, and we will assist you in confirming whether it is legitimate or not.