Interest on Home Equity Loans Often Still Deductible Under New Law

The following article was published by the IRS.

mortgageThe Internal Revenue Service today advised taxpayers that in many cases they can continue to deduct interest paid on home equity loans.

Responding to many questions received from taxpayers and tax professionals, the IRS said that despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labelled. The Tax Cuts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan. Continue reading

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Estate Planning You Need to Do Today

When it comes to financial planning, it is common for many prepared individuals to have their ducks in a row, especially as they age. This includes having an emergency fund, retirement plan, and the proper insurance, just to name a few. After all, you’ve worked hard much of your life; you’d hate to see it all go to waste if the unimaginable happens.

But what about the imaginable, the likely — that uncomfortable topic we all try to avoid: death. Are you prepared financially for what will happen to your hard-earned assets when you eventually pass away? Continue reading

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Tax Filing Season is Here – Things for Taxpayers to Consider

The following article was published by the IRS.

The IRS is now accepting tax returns as the annual tax filing season is underway. The IRS expects taxpayers to file more than 155 million returns this year. Here are some things for taxpayers to consider as they are filing:

  • People have until Tuesday, April 17, 2018, to file their 2017 returns and pay any taxes due.
  • Choosing e-file and direct deposit is the fastest and safest way to file an accurate income tax return and receive a refund.
  • By law, the IRS cannot issue some refunds before mid-February. These refunds are for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit. The IRS expects the earliest refunds related to EITC and ACTC to be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2018.
  • The best way for taxpayers to check the status of a refund is to use “Where’s My Refund?” ‎on IRS.gov or the IRS2Go mobile app.
  • Taxpayers should have their year-end statements in hand before filing. This includes Forms W-2 from employers and Forms 1099 from banks and other payers. Doing this helps avoid refund delays and the need to file an amended return.
  • IRS.gov is the place to go online for tools that help people as they prepare and file their tax return. This includes:
  • Many Individual Taxpayer Identification Numbers expired on Dec. 31, 2017. This includes any ITIN not used on a tax return at least once in the past three years. Also, any ITIN with middle digits of 70, 71, 72 or 80 is now expired. Affected taxpayers should act soon to renew their number.
  • Some taxpayers using a tax filing software product for the first time may need their Adjusted Gross Income amount from their prior-year tax return. They need this to verify their identity. Taxpayers using the same tax software they used last year will not need to enter this information.
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Earned Income Tax Credit-Get It Right

If you are one of many Americans who earn a low to moderate income, you may be eligible for a tax credit that can increase your tax refund. This credit is known as the Earned Income Tax Credit, or more simply the EITC.

The credit is variable and depends on several factors, including your income and family size. Families with at least one qualifying child may receive up to several thousand dollars towards their refund. Even some single taxpayers without children may be eligible.

You must meet certain requirements to be eligible for the EITC. In order to find out, visit irs.gov/eitc and click on “EITC Assistant” to see if you are eligible. Continue reading

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Five Things to Remember About Exemptions and Dependents for Tax Year 2017

The following article was published by the IRS.

Most taxpayers can claim one personal exemption for themselves and, if married, one for their spouse. This helps reduce their taxable income on their 2017 tax return. They may also be able to claim an exemption for each of their dependents. Each exemption normally allows them to deduct $4,050 on their 2017 tax return. While each is worth the same amount, different rules apply to each type.

Here are five key points for taxpayers to keep in mind on exemptions and dependents when filing their 2017 tax return:

  1. Claiming Personal Exemptions.  On a joint return, taxpayers can claim one exemption for themselves and one for their spouse. If a married taxpayer files a separate return, they can only claim an exemption for their spouse if their spouse meets all of these requirements. The spouse:

Continue reading

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Claiming EITC or ACTC? Your Refund May Be Delayed

If you are one of the millions who plan to claim the Earned Income Tax Credit or the Additional Child Tax Credit, there are some things that are important to know.

Regardless of when you file your taxes, the IRS is restricted by law from issuing any refunds to those claiming either of these credits until mid-February at the earliest. The reason for this delay is to give the IRS time to screen fraudulent filings attempting to illegally claim these credits. Continue reading

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IRS Urges Travelers Requiring Passports to Pay Their Back Taxes or Enter into Payment Agreements; People Owing $51,000 or More Covered

The following article was published by the IRS.

passportThe Internal Revenue Service recently encouraged taxpayers who are seriously behind on their taxes to pay what they owe or enter into a payment agreement with the IRS to avoid putting their passports in jeopardy.

This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. See Notice 2018-1. The FAST Act also requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may revoke their passport. Continue reading

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