​WASHINGTON - The Internal Revenue Service is reminding taxpayers to beware of criminals who continue using devious tactics to steal money and personal information from unsuspecting victims, especially as the fall season approaches.
 
The agency warns that scammers continue to pose as the IRS, making threatening phone calls and using email phishing schemes to lure taxpayers. The scams may be particularly prevalent ahead of the Oct. 15 tax-filing extension deadline. Another tax scam, where criminals pose as charity organizations, tends to peak during hurricane season or following a natural disaster. Taxpayers should learn about these ongoing tax scams and know what to do if they're targeted.
 
The IRS urges taxpayers to look out for suspicious calls, emails and donation requests and take appropriate action if they experience any of the following:
 
Telephone scams
How the scam works: Criminals pose as IRS employees and call victims, demanding immediate payment of a so-called tax debt. Payments are often requested via prepaid debit cards and/or money wires. The caller will ask to stay on the line or otherwise call repeatedly while the victim completes the transaction. The caller may use a condescending tone and will often threaten to file a lawsuit, call the police or involve federal law enforcement agencies if the victim doesn't comply. The call may appear to come from emergency services and/or a local/federal law enforcement agency but the fraudsters are faking, or "spoofing" the caller ID to only appear to come from a legitimate agency.
 
What taxpayers should do: Hang up the phone. Know that the IRS would never call to threaten or demand immediate tax payment. The agency offers taxpayers a chance to appeal any amount in question and offers numerous ways of resolving a tax liability.
 
Anyone wishing to check their account after receiving this type of call can visit the IRS website and register to view your account information online. The tool allows taxpayers to view up to 24 months of payment history and balance due for any given tax year. Taxpayers who want to report scam calls can visit the Treasury Inspector General for Tax Administration's website, TIGTA.gov, and also email [email protected] (Subject: IRS Phone Scam). Visit Report Phishing for more information.
 
Phishing emails
How the scam works: Criminals send an email to your personal or business account(s) appearing to be from the IRS. The email usually features the IRS logo, uses agency language and asks taxpayers to provide sensitive information. It may also ask recipients to open an attachment or click on a link embedded within the email to supposedly give the taxpayer account access. In a more recent variation called "spear phishing," the criminal, having done research on the victim ahead of time, will send an email posing as a trusted source. The email will make an urgent plea to click on a link and update an account immediately. The link will then direct the victim to what seems to be a trusted website but is in reality a phishing website controlled by the thief who can install malicious software.
 
What taxpayers should do: Do not provide personal information, click on links or open attachments from emails pretending to be from the IRS. Know that the IRS does not initiate contact by email or social media channels. The agency gets in touch with taxpayers through paper letters mailed by the U.S. Postal Service. IRS letters and notices are mailed to the taxpayer's most recent address on file. Forward the email as-is, preferably with the full email headers to [email protected].Delete the original email.
 
Fake charity donation requests
How the scam works: Criminals set up fake charities to attract donations from unsuspecting contributors. The scammers prey on well-intentioned taxpayers, especially during times of distress, such as following a natural disaster. They solicit money either by phone, email or even in person. The scammers may even contact disaster victims and claim to be working on behalf of the IRS with the goal of gaining access to personal information under the pretext of filing a casualty loss claim.
 
What taxpayers should do: Don't give out personal or financial information such as Social Security numbers. Be wary of charities with names that resemble nationally-known charity organizations. The IRS has an online search tool called the Tax Exempt Organization Search which allows people to find legitimate, qualified charities to whom a donation may be tax deductible. For security and tax record purposes, contribute by check or another way that provides documentation of the gift. Taxpayers who want to report suspected tax fraud activity can do so by completing Form 3949-A, Information Referral.

​​Eligible employers who provide paid family and medical leave to their employees during tax years 2018 and 2019 might qualify for a new business tax credit. This new employer credit for family and medical leave is part of tax reform legislation passed in December 2017. Here are some facts about the credit to help employers find out if they might be able to claim it.
 To be eligible, an employer must:

• Have a written policy that meets several requirements, as detailed in Notice 2018-71.
• Provide:
  • At least two weeks of paid family and medical leave to full-time employees.
  • A prorated amount of paid leave for part-time employees.
  • Provide pay for leave that is at least 50 percent of the wages normally paid to that employee.

The credit applies to these dates:

• It is available for wages paid in taxable years beginning after Dec. 31, 2017, and before Jan. 1, 2020.

​The amount of the credit:

• The credit is generally equal to 12.5 to 25 percent of paid family and medical leave for qualifying employees.

Here's what kind of leave qualifies:

• The leave can be for any or all of the reasons specified in the Family and Medical Leave Act:
  • Birth of an employee's child.
  • Care for the child.
  • Placement of a child with the employee for adoption or foster care.
  • To care for the employee's spouse, child, or parent who has a serious health condition.
  • A serious health condition that makes the employee unable to perform the functions of his or her position.
  • Any qualifying exigency due to an employee's spouse, child, or parent being on covered active duty - or having been notified of an impending call or order to covered active duty - in the Armed Forces.
  • To care for a service member who is the employee's spouse, child, parent, or next of kin.
    
  
  

However, leave paid by a state or local government, or that is required to be provided by state or local law, does not count toward the 50 percent.

Some employers are eligible to claim the credit retroactively to the beginning of their taxable year:

• Normally employers can only claim the credit based on eligible leave taken after their new or amended policy goes into effect.
• Read Notice 2018-71 for a description of special rules for when an employer can claim the credit retroactively.

To claim the credit, employers will:

• Attach Form 8994 to their return. The IRS expects to have this new form available later in 2018.

The Notice sets out special rules and limitations that apply:

• For example, only paid family and medical leave provided to employees whose prior-year compensation was at or below a certain amount qualify for the credit.
  
• Generally, for tax-year 2018, the employee's 2017 compensation from the employer must be $72,000 or less.

Under recent tax legislation, you can no longer claim personal exemptions, including ones for your children and other relatives (now through 2025). That means if you've been claiming an exemption for an elderly parent you support, you will no longer be able to. But you still may be able to salvage a tax benefit if a parent watches your kids so you and your spouse can work.
 
How to salvage a tax benefit
 
Consider turning your support into payment for child care. In other words, instead of giving your parent support, you may decide to pay him or her to look after the kids. This may entitle you to a Child and Dependent Care Credit.
 
The credit is generally equal to 20 percent of child care expenses of up to $3,000 for one child under 13 for the year, or $6,000 for two or more qualified children. So the maximum credit is $600 (or $1,200, respectively).
 
Here's an example: Say that you give your mother $1,000 a month to pay her rent. She watches your two kids after school while you and your spouse are working, but you don't pay for the child care.
 
Previously, you'd claim a dependency exemption for your mother if you provided more than half her annual support and she had less than the personal exemption amount in gross income ($4,050 for 2017).
 
Although there are no exemptions in 2018, you can qualify for the Child and Dependent Care Credit if you switch things around. Simply pay your mom $1,000 monthly for child care when the kids go back to school in September instead of giving the $1,000 to her landlord.
 
The payments for the three remaining months in 2018 qualify for the Child and Dependent Care Credit. As a result, you can claim a $600 credit (20 percent of $3,000). Of course, the payments are taxable to your mother, but it's likely she won't owe any tax, anyway.
 
Keep in mind that the recent tax legislation also authorizes a $500 credit for supporting non-children dependents. This special credit is nonrefundable.

​​Taxpayers who need tax help can simply pull out their phone and download the IRS mobile app. 
​IRS2Go is available to use for free on any iOS or Android device.

Taxpayers can use IRS2Go to:

• Check the status of their refund. Taxpayers can check the status of their federal tax refund within 24 hours after the IRS receives an an e-filed return, or about four weeks after the taxpayer mails a paper return.
• Make a payment. The app offers easy access to mobile-friendly payment options like IRS Direct Pay. This offers taxpayers a free, secure way to pay directly from their bank account. They can also make a debit or credit card payment through an approved payment processor.
• Find free tax preparation assistance. If a taxpayer is eligible, they can access free tax software from their mobile device using the Free File tool within IRS2Go. They can use this software to quickly prepare and file their taxes and get their refund. Taxpayers who received an extension of time to file their taxes can use the app to file through the October extended filing deadline.
• Get helpful tips and information. Taxpayers can use the app to access IRS accounts on social media, including links to helpful YouTube videos and the IRS Twitter accounts. Taxpayers can also use the app to sign up to receive IRS Tax Tips by email.

​IRS2Go is available in both English and Spanish and available to download from Google Play, the Apple App Store or the Amazon Appstore.

​WASHINGTON  In the wake of Hurricane Florence, the Internal Revenue Service is reminding taxpayers that criminals and scammers try to take advantage of the generosity of taxpayers who want to help victims of major disasters.

Fraudulent schemes normally start with unsolicited contact by telephone, social media, e-mail or in-person using a variety of tactics.

• Some impersonate charities to get money or private information from well-intentioned taxpayers.
• Bogus websites use names that are similar to legitimate charities to trick people to send money or provide personal financial information.
• They even claim to be working for, or on behalf of, the IRS to help victims file casualty loss claims and get tax refunds.
• Others operate bogus charities and solicit money or financial information by telephone or email.

Help for disaster victims
 
Comprehensive information on disaster-related tax issues, including provisions for tax relief, can be found on the disaster relief page on IRS.gov.
 
In the case of a federally declared disaster, affected taxpayers may also call the IRS Special Services Help Line, 866-562-5227, with disaster-related tax questions. Details on available relief can be found on the disaster relief page on IRS.gov.
 
Donate to real charities
 
To help taxpayers donate to legitimate charities, the IRS website, IRS.gov, has a search feature, Tax Exempt Organization Search, that helps users find or verify qualified charities. Donations to these charities may be tax-deductible.

• Contribute by check or credit card. Never give or send cash.
• Don't give out personal financial information - such as Social Security numbers or credit card and bank account numbers and passwords - to anyone who solicits a contribution.

​One type of retirement plan that often fits the needs of small business owners is the Simplified Employee Pension (SEP). ​Typically, accounts are set up as SEP IRAs, much like traditional IRAs.
 
What to know about SEPs
 
As the name implies, it's relatively simple to establish and operate a SEP plan. Unlike some other qualified plans - including 401(k)s - you don't have to file annual reports with the IRS. Here are some other key aspects of SEPs:

• The contribution limit is generous. For 2018, the maximum deductible contribution is generally equal to the lesser of 25 percent of compensation (20 percent of earned income of a self-employed individual) or $55,000. In comparison, the annual contribution limit for a traditional IRA is only $5,500 ($6,500 if you're age 50 or older).

 

• Employers make contributions. A potential downside for employers is that you generally have to make contributions on behalf of all full-time employees who are 21 and older and have worked for the business at least three of the last five years. Part-time employees are included if each earns more than $600 in 2018.

• Contributions are discretionary. For instance, you can boost them in good years, cut them or even skip them in bad years, as long as you contribute the same percentage of compensation for all participants. This gives small business owners flexibility.

• MDs are necessary. As with other qualified plans, you must begin taking required minimum distributions (RMDs) after you reach 70 1/2. And, if you make withdrawals prior to 59 1/2, you could be hit with a 10 percent penalty tax on top of the regular income tax (unless a special exception applies).

Of course, you have other options. The qualified SIMPLE plan is similar to the SEP, but offers a lower contribution limit. For 2018, the limit is $12,500 ($15,500 if you're 50 or older). Finally, you have until your tax return due date, plus extensions, to set up and fund a SEP for the tax year.

​Although recent tax legislation has eliminated or scaled back many prized deductions for 2018 through 2025, it didn't touch the deduction for student loan interest. So the usual questions remain: Who can claim the deduction and for how much?
​ 
Student loan interest deduction basics
 
For starters, the deduction for student loan interest is claimed "above the line," so it's available to both itemizers and taxpayers who take a standard deduction. The annual deduction is limited to no more than $2,500 of the interest paid for qualified expenses like tuition and fees, room and board, books, supplies and equipment, and other necessary expenses (e.g., transportation).
 
The loan can be for your own education, as well as for your spouse or a dependent. Whoever pays the loan is eligible to deduct the interest, subject to the following rules.
 
Most importantly, the IRS says that student loan interest may be deductible only if all of the following apply:

• You paid interest on a qualified student loan in the tax year of the tax return
• You're legally obligated to pay interest on a qualified student loan
• Your filing status is not married filing separately
• Your modified adjusted gross income (MAGI) is less than the specified annual amount
• You or your spouse (if filing jointly) could not be claimed as dependents on someone else's tax return. (Under recent legislation, dependency exemptions are eliminated for 2018-2025.)

MAGI limit for deductions
 
The MAGI limit is indexed for inflation, although increases the last few years have been small or nonexistent. For 2018, the deduction is phased out for a MAGI between $65,000 and $80,000 for single filers or $135,000 and $165,000 of MAGI for joint filers. Once you exceed the upper threshold of this range, you can't claim any deduction.
 
Due to the MAGI limits, students may have a better chance than their parents of salvaging some tax benefit for paying off student loan payments.
 
Call today with questions about the student loan interest deduction, or other tax deductions for your situation.

​​
​Questions about taxes could come up any time of the year. Whether it's about tracking a refund or paying a bill, taxpayers can find answers to their questions on IRS.gov. Here are some of the most popular IRS tools:

• IRS Free File. Taxpayers who filed an extension can use IRS Free File to prepare and e-file a federal tax return. Free File is available at no cost for anyone with income below $66,000. Free File is available through Oct. 15 to file a 2017 tax return. IRS Free File is available through IRS.gov or the IRS2Go mobile app.
• Direct Deposit. Direct Deposit is the best and fastest way for taxpayers to get their tax refund electronically deposited for free into their financial account. Combining direct deposit with electronic filing is the fastest way for a taxpayer to receive their refund.
• Where's My Refund? Taxpayers can use "Where's My Refund?" at IRS.gov or the IRS2Go mobile app to check the status of a refund within 24 hours after the IRS receives the e-filed return or four weeks after a mailed paper return. The IRS2Go app is free and available on Google Play, the Apple App Store or Amazon App Store.
• Paying a Tax Bill. IRS Direct Pay is free and taxpayers can pay directly from a checking or savings account. They can choose to receive email notifications about their payments each time they use Direct Pay There are five simple steps to pay in a single online session and it's also available with the IRS2Go mobile app. Other payment options are available at IRS.gov/payments.
• Tax Account Information Online. At IRS.gov/account individual taxpayers can view their balance and payment history. They can also pay with their bank account, a debit or credit card or apply for an installment agreement. They can view, print or download tax records, and view their most current tax return information as originally filed. First time users must authenticate their identity through the Secure Access process. Taxpayers who already have a user name and password from Secure Access for their tax account, Get Transcript Online or Identity Protection PIN, may use the same username and password.
• Online Payment Agreement. Taxpayers who can't pay their taxes in full can apply for an Online Payment Agreement. Using the Direct Debit payment plan option is a lower-cost, hassle-free way to make monthly payments.
• Interactive Tax Assistant. Taxpayers can use this tool to find answers to their tax questions. This tax law resource asks a series of questions and provides instant answers on a variety of tax topics, including general filing questions, deductions, credits and income.
• Tax Map. The IRS Tax Map integrates web links, tax forms, instructions and publications into one search result. Taxpayers can quickly find forms, publications, frequently asked questions and news by topic.

​ 
With college football season kicking off soon, you might contribute to a booster club for your alma mater or a favorite in-state school.
 
In the past, you could claim a limited charitable deduction if your contributions provided you with preferred seating in the stadium or some other comparable benefit. But that's no longer the case.
​
Tax laws change for college charitable contributions
 
Previously, the deduction for booster club donations was equal to 80 percent of the payment if you were given the rights to buy tickets on the 50-yard-line or some other desirable location in the sporting venue.
 
For example, if you paid $10,000, you could write off $8,000. But the cost of the tickets you actually purchased was nondeductible.
 
Under recent tax legislation, the deduction for contributions to a college or university made in return for seating rights at athletic events has been eliminated. And, unlike many of the other tax law changes for individuals, this provision is permanent.
 
Nevertheless, you can still deduct donations that support a school if you don't receive any benefits in exchange, assuming you itemize on your return.
 
Now, if you contribute the same $10,000 to a booster club, you're not entitled to any preferred seating. Even though you might have to pay more to get the seats that you want, you can write off the entire $10,000 contribution (subject to the usual tax rules for charitable donations).
 
Keep in mind that new tax law provisions essentially double the standard deduction, while reducing certain tax benefits of itemized deductions. As a result, you may no longer itemize deductions during these years. Schedule an appointment with us if you have questions about itemizing for 2018.