IRS Waives Penalty for Many Whose Tax Withholding and Estimated Tax Payments Fell Short in 2018

The following article was published by the IRS.

algebra-1238600_1280The Internal Revenue Service has announced that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty. Continue reading

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Earned income tax credit – Do you qualify?

Do you qualify for the Earned Income Tax Credit? If you do, and you don’t claim it, you are leaving potentially thousands of dollars on the table. The EITC is designed to help those on a low to moderate income pay for their everyday expenses.

But not everyone can get this tax break. You must meet certain criteria to qualify. They are listed below: Continue reading

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Here’s What Taxpayers Should Consider When Determining If They Need to File

The following article was published by the IRS.

question-mark-1722865_1280As people prepare to file their taxes, there are things to consider. They will want to determine if they need to file and the best way to do so.

For tax year 2018, all individual taxpayers will file using the new Form 1040. Forms 1040A and 1040EZ are no longer available. Taxpayers who previously filed these forms will now file Form 1040. The new Form 1040 uses a “building block” approach allowing individuals to add only the schedules they need to their 2018 federal tax return. Taxpayers with more complicated returns will need to complete one or more of the new Form 1040 Schedules. This group of taxpayers includes those who claim certain deductions or credits, or who owe additional taxes. Continue reading

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Deductions You Probably Missed

Experienced tax pros are experts at knowing which deductions to look for when you file your taxes. Deductions are simply defined as subtractions from your income that can save anywhere from hundreds to thousands on your taxes.

Due to the new tax laws, everyone is going to get a much bigger standard deduction this year: $12,000 if you are filing single, and $24,000 for those filing jointly. Early estimates say that 90% of Americans won’t need to itemize due to the higher standard deduction. Continue reading

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401(k) Contribution Limit Increases to $19,000 for 2019; IRA Limit Increases to $6,000

The following article was published by the IRS.

profits-1953616_1280 (1).jpgThe Internal Revenue Service has announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019.

Highlights of Changes for 2019
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000.

The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the saver’s credit all increased for 2019. Continue reading

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Your Taxes in the Sharing Economy

What do social media gigs, driving for companies like Uber, and renting out spare bedrooms in your house to travelers all have in common? They are all different ways of participating in what has become known as the Sharing Economy. This is also known as the Gig, On-Demand, or Access Economy.

With the help of online platforms or mobile apps, people are able to discover jobs that cover a wide variety of skills. More and more people are participating by using more of their free time, and even using their personal cars, to make a few extra bucks on the side.

If you use your car or house through an online or mobile platform, or if you find jobs that way, it is important that you keep in mind the unique tax implications. Since it is such a new and emerging area, the IRS has set up some resources on their website to help you navigate your unique situation. Continue reading

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Individuals Can Find Answers to their Questions about Tax Reform on IRS.gov

The following article was published by the IRS.

ask-2341784_1280Tax reform legislation passed in December 2017 affects almost every taxpayer. The IRS is working closely with partners in the tax return preparation and tax software industries to prepare for tax reform affecting tax year 2018. This ongoing collaboration ensures that taxpayers can continue to rely on the IRS, tax professionals, and tax software programs when it’s time to file their returns.

As people prepare to file their 2018 tax returns in 2019, they can visit IRS.gov for answers to their questions about tax reform. Here are several of the resources that will help taxpayers find out how this law affects them: Continue reading

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