The IRS has launched an easy-to-use webpage, IRS.gov/taxreform, with information about how the Tax Cuts and Jobs Act affects your taxes, with a special section focused on tax exempt entities.

The tax reform page features three areas designed specifically for:

• Individuals – For example, standard deduction increase, child tax credit, withholding. Use the Withholding Calculator to make sure you’re withholding enough tax from your paycheck.

• Businesses – For example, depreciation, expenses and qualified business income deductions.

• Tax Exempt Entities – For example, tax reform affecting retirement plans, tax-exempt organizations and governments.

Under the Tax Exempt Entities tab, you’ll find highlights of how tax reform affects retirement plans, tax-exempt organizations and tax-advantaged bonds.
 
Retirement plans

• Rollovers of retirement plan loan offsets – If your plan offsets an outstanding loan balance when you leave employment, you have until the due date of your individual tax return, plus extensions, to rollover those amounts to another plan or IRA.

• Roth re-characterizations – You can no longer re-characterize amounts rolled over to a Roth IRA from other retirement plans, such as 401(k) or 403(b) plans, or a conversion from a traditional IRA, SEP or SIMPLE to a Roth IRA.

Tax-exempt organizations

• Tax reform imposes a 1.4 percent excise tax on the investment income of certain educational institutions.

• An exempt organization with more than one unrelated trade or business must calculate unrelated business taxable income separately for each trade or business.

Tax-advantaged bonds

• Tax reform repealed the authority to issue tax-credit bonds and direct-pay bonds.

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• The IRS will not process applications for, or issue allocations of, the remaining unused authority to issue new clean renewable energy bonds.

​Visit IRS.gov/taxreform often for the latest updates, guidance and FAQs issued for the Tax Cuts and Jobs Act.

After a disaster, taxpayers might need to reconstruct records. This could help them prove their losses, which may be essential for tax purposes, getting federal assistance or insurance reimbursement.

Here are several things taxpayers can do to help reconstruct or get copies of specific types of records after a disaster:

Tax Return Transcripts

• Taxpayers can get free tax return transcripts by using the Get Transcript tool on IRS.gov. They can also call 800-908-9946 to order them by phone.

Proof of loss

• To establish the extent of the damage, taxpayers should take photographs or videos of affected property as soon as possible after the disaster.
• Taxpayers can look on their mobile phone for pictures that show the property before the disaster damaged it.
• If a taxpayer doesn’t have photographs or videos of their property, a simple method to help them remember what items they lost is to sketch pictures of each room that was affected.
• Taxpayers can support the valuation of property with photographs, videos, canceled checks, receipts, or other evidence.
• If they bought items using a credit card or debit card, they should gather past statements from their credit card company or bank. If the taxpayer didn’t keep these records or they were destroyed, statements may be available online or they can contact their financial institution.

Records about property

• Taxpayers can contact the title company, escrow company, or bank that handled the purchase of their home to get copies of appropriate documents.
• Taxpayers who made improvements to their home should contact the contractors who did the work to see if records are available. If possible, the home owner should get statements from the contractors to verify the work and cost. They can also get written accounts from friends and relatives who saw the house before and after any improvements.
• For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, the taxpayer can contact the attorney who handled the trust.
• When no other records are available, taxpayers can check the county assessor’s office for old records that might address the value of the property.
• There are several resources that can help someone determine the current fair-market value of most cars on the road. These resources are all available online and at most libraries. They include Kelley’s Blue Book, the National Automobile Dealers Association, and Edmunds.

​More Information:
Publication 547, Casualties, Disasters, and Thefts
Publication 584, Casualty, Disaster, and Theft Loss Workbook
Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook
Publication 2194, Disaster Resource Guide for Individuals and Businesses
Small Business Administration
Disasterassistance.gov
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The rehabilitation tax credit offers an incentive for owners to renovate and restore old or historic buildings. Tax reform legislation passed in December 2017 changed when the credit is claimed and provides a transition rule: 

• The credit is 20 percent of the taxpayer’s qualifying costs for rehabilitating a building.

• The credit doesn’t apply to the money spent on buying the structure.

• The legislation now requires taxpayers take the 20 percent credit spread out over five years beginning in the year they placed the building into service.

• The law eliminates the 10 percent rehabilitation credit for pre-1936 buildings.

• A transition rule provides relief to owners of either a certified historic structure or a pre-1936 building by allowing owners to use the prior law if the project meets these conditions:

• The taxpayer owned or leased the building on January 1, 2018, and the taxpayer continues to own or lease the building after that date.

• The 24- or 60-month period selected by the taxpayer for the substantial rehabilitation test begins by June 20, 2018.

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Taxpayers use Form 3468, Investment Credit, to claim the rehabilitation tax credit and a variety of other investment credits. Form 3468 instructions have detailed requirements for completing the form.

More information:
Rehabilitation Tax Credit - Real Estate Tax Tips
Internal Revenue Code Section 47

Don't forget - October is the month for preparing third-quarter 2018 payroll reports. As you begin gathering the information you'll send to federal, state and local governments, check your compliance in these four key areas:

• Wages. Federal and state laws spell out your responsibilities for meeting minimum wage and overtime pay, as well as what records you need to keep, like hours worked, pay periods and pay dates.

And if you have employees and independent contractors, make sure to know the difference so you can ensure your workers are classified correctly.

• Income tax withholding. As an employer, you're responsible for withholding the correct amount of income tax from your employees' wages and remitting the withholding on time as part of your payroll tax deposits. Maintain current Forms W-4 on file for each employee to be sure you're withholding the correct amount of tax.  

• FICA taxes. This tax is a set percentage of gross wages. The base rate is 7.65 percent for 2018 for both employees and employers.

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When you pay an employee more than $200,000 in a calendar year, you'll also withhold an additional Medicare tax of 0.9 percent from your employee's wages. Keep in mind, there is no employer match for the additional Medicare tax.

• Unemployment tax. Federal and state unemployment taxes are not withheld from employee wages. These taxes are paid solely by you, the employer. Make sure you're calculating your liability using the correct rate. (A credit reduction applies to some states.)

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Call if you have questions about your payroll taxes. We're here to help you stay up to date.

October 15 is the filing deadline for taxpayers who requested an extension for their 2017 tax return. However, those who have an extension should mark this coming Monday, Oct. 15 as the deadline to file.

While the deadline is just around the corner, there are still things these taxpayers can remember to make sure they file a complete and accurate return. Here are a few tips and reminders for taxpayers who have not yet filed:

Try IRS Free File or e-file. Taxpayers can e-file their tax return for free through IRS Free File. The program is available on IRS.gov through Oct. 15. IRS e-file is easy, safe and the most accurate way to file taxes.

File by Oct. 15. Taxpayers with extensions should file their tax returns by Monday, Oct. 15. If they owe, they should pay as much as possible to reduce interest and penalties. IRS Direct Pay allows individuals to securely pay from their checking or savings accounts. These taxpayers can consider an installment agreement, which allows them to pay over time.

There is more time for the military. Military members and those serving in a combat zone generally get more time to file. These taxpayers typically have until at least 180 days after they leave the combat zone to both file returns and pay any taxes due.

There is also more time in certain disaster areas. People who have an extension and live or work in a disaster area often have more time to file. The disaster relief page on IRS.gov has more information.

Taxpayers owed a refund should use Direct Deposit. The fastest way for taxpayers to get their refund is to combine direct deposit and e-file.

There are IRS online payment options for taxpayers who owe. Taxpayers who requested an extension should have paid the tax they owed by the deadline back in April. Taxpayers who find they still owe taxes can pay them with IRS Direct Pay. It’s the simple, quick and free way to pay from a checking or savings account. For other payment options, taxpayers can visit the Paying Your Taxes page on IRS.gov.
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Keep a copy of tax return. Taxpayers should keep a copy of their tax return and all supporting documents for at least three years.

Taxpayers can view their account information. Individual taxpayers can go to IRS.gov/account and login to view their balance, payment history, pay their taxes and access tax records through Get Transcript. Before setting up an account, taxpayers should review Secure Access: How to Register for Certain Online Self-Help Tools to make sure they have the information needed to verify their identities.

 
Health savings accounts (HSAs) have been around a long time, and little has changed since they were first introduced in 2003. They offer tax benefits, many of which you can benefit from if you know how. Here's a refresher on how HSAs work:
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• An HSA has two parts. These parts include a high-deductible health insurance policy and a savings account. The idea is simple: You buy a health plan with a high deductible, and you deposit cash into a savings or investment account to pay the policy deductible and other qualified out-of-pocket medical expenses.

 

• Contributions are tax-deductible. The tax benefit comes from the way the savings account part of the HSA works, which is similar to a traditional individual retirement account. For example, you can claim a federal income tax deduction for contributions to your HSA, and the deduction is above the line, meaning you can benefit without having to itemize.

 

• Contribution amounts change. For 2018, the maximum tax-deductible contribution is $3,450 when the insurance plan covers only you, or $6,900 when you purchase an insurance plan for your family. When you're age 55 or older, you can contribute (and deduct) an extra $1,000.

 

• There are rules around withdrawals. Interest, dividends or other growth in the account is tax-free as long as you use withdrawals for qualified medical expenses. But what happens if you use the money for other purposes? The withdrawals are included in income, taxed at your regular rate, and subject to a 20-percent penalty. If you are 65 or older, you can withdraw money from your account for any reason without paying a penalty.

Keep in mind that other rules apply, including the opportunity to fund an HSA with a tax-free rollover from your individual retirement account.

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Call if you have questions about how you can make the most tax-savvy choices with your HSA.

​WASHINGTON - The Internal Revenue Service issued guidance today on the business expense deduction for meals and entertainment following law changes in the Tax Cuts and Jobs Act (TCJA).

The 2017 TCJA eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation.

Taxpayers may continue to deduct 50 percent of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact.

Food and beverages that are provided during entertainment events will not be considered entertainment if purchased separately from the event.

Prior to 2018, a business could deduct up to 50 percent of entertainment expenses directly related to the active conduct of a trade or business or, if incurred immediately before or after a bona fide business discussion, associated with the active conduct of a trade or business.

The Department of the Treasury and the IRS expect to publish proposed regulations clarifying when business meal expenses are deductible and what constitutes entertainment. Until the proposed regulations are effective, taxpayers can rely on guidance in Notice 2018-76.

Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov

​Are you up to your ears in tax debt or at odds with the IRS over your tax liability? You may have more payment options than you think.
 
Offer in compromise (OIC)
 
Essentially, an OIC is an agreement with the IRS to settle your tax liability for less than the full amount owed. Usually, the IRS won't accept an OIC unless the amount you offer is equal to or greater than the "reasonable collection potential" (RCP) from assets you own - including real estate, autos, bank accounts and future earnings.

The IRS may accept an OIC for one of three reasons:

1. There is doubt as to the tax liability
2. There is doubt that the full amount owed can be collected
3. The compromise is based on effective tax administration (In other words, requiring full payment would create an economic hardship or otherwise be inequitable)

The application fee for an OIC is generally $186, although there are certain exceptions.
 
Installment agreement
 
You may end up deciding to apply for an installment agreement instead if you can't pay the full amount of tax you owe within the OIC payment parameters. An installment agreement allows you to make a series of monthly payments over time.

The IRS offers various options for making these payments, including:
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• Direct debit from your bank account
• Payroll deduction from your employer
• Payment by the Electronic Federal Tax Payment System (EFTPS)
• Payment by credit card
• Payment via check or money order
• Payment with cash at a retail partner

​The user fee for installment agreements varies, depending on the type of payment, but the maximum fee is $225. Interest and possibly penalties will also be added to the amount owed.
 
Which option is better? It depends on your personal situation. Call to discuss what option is right for you.