Archive for January, 2015

Monthly Newsletter for February 2015

by in Newsletter on Jan. 27, 2015

IRS Information about Identity Theft at Tax Time

 

WASHINGTON — The Internal Revenue Service today issued a filing season alert warning taxpayers to watch out for identity theft at tax time, one of the year’s “Dirty Dozen” tax scams. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number.

 

“We remain dedicated to stopping tax-related identity theft and protecting taxpayers, and we are making important progress on that front. Taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim,” said IRS Commissioner John Koskinen.

 

The Dirty Dozen is compiled annually by the IRS and lists a variety of common scams taxpayers may encounter any time during the year. Many of these con games peak during filing season as people prepare their tax returns or hire someone to do so. This year for the first time, the IRS will issue the individual Dirty Dozen scams the next 12 business days to raise consumer awareness.

 

“Scams can be sophisticated and take many forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues,” Koskinen said. “Keep your personal information safe and secure. Taxpayers should protect their computers and only give out their Social Security numbers when absolutely necessary.”

 

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. While the IRS has made significant strides over the past several years to address this issue, it remains a top concern for the IRS, which is why identity theft remains on the Dirty Dozen again list this year as the IRS works to protect taxpayers and help victims.

For 2015, the IRS will continue to increase both the number and efficiency of the identity theft data models and filters that are used to identify potentially fraudulent returns. These pre-refund filters stop the vast majority of fraudulent returns. Additionally, the IRS continues to expand its partnerships with financial institutions to identity and stop fraudulent refunds.

 

Fighting identity theft is an ongoing battle as identity thieves continue to create new ways of stealing personal information and using it for their gain. Identity theft cases are among the most complex handled by the IRS. The IRS is continually reviewing processes and policies to minimize the incidence of identity theft and to help those who find themselves victimized. The IRS is working hard to streamline its internal process, but more work remains.

 

In an effort to help victims, the IRS has issued approximately 1.5 million Identity Protection PINs (IP PINs.) The IP PIN is a unique, six-digit number that is assigned annually to victims of identity theft with resolved cases for use when filing their federal tax return. The IP PIN will allow these individuals to avoid delays in filing returns and receiving refunds.

This year, the IRS will continue its IP PIN pilot program that allows taxpayers who filed tax returns last year from Florida, Georgia or the District of Columbia to opt into the IP PIN program. Additionally, the IRS is offering approximately 1.7 million taxpayers the opportunity to opt in to the IP PIN program in instances where the IRS has identified indications of identity theft on their accounts.

The IRS understands that identity theft is a frustrating, complex process for victims. While identity thieves steal information from sources outside the tax system, the IRS is often the first to inform a victim that identity theft has occurred. The IRS is working hard to resolve identity theft cases as quickly as possible.

 

The IRS offers the following tips as ways to protect you from becoming a victim of identity theft:

 

  • Don’t carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
  • Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
  • Protect your financial information.
  • Check your credit report every 12 months.
  • Review your Social Security Administration earnings statement annually.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.

Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

 

 

 

Use the Tax Form That’s Right for You

This tax filing season, get things off to a good start. Make it easy on yourself and let the software you use to e-file select the right form for you. Filing electronically is the easiest way to file a complete and accurate return. The software asks questions that guide you, minimizes errors and helps you get the tax credits and deductions that you are entitled to claim. Brand-name software’s also free when you use IRS Free File on IRS.gov.

If you do file a paper return, here are some tips to help you use the right forms.

You can generally use the 1040EZ if:

  • Your taxable income is below $100,000;
  • Your filing status is single or married filing jointly;
  • You don’t claim dependents; and
  • Your interest income is $1,500 or less.

Note: You can’t use Form 1040EZ to claim the new Premium Tax Credit. You also can’t use this form if you received advance payments of this credit in 2014.

The 1040A may be best for you if:

  • Your taxable income is below $100,000;
  • You have capital gain distributions;
  • You claim certain tax credits; and
  • You claim adjustments to income for IRA contributions and student loan interest.

You must use the 1040 if:

  • Your taxable income is $100,000 or more;
  • You claim itemized deductions;
  • You report self-employment income; or
  • You report income from sale of a property.

Remember, if you e-file your tax return you don’t need any paper forms to mail to the IRS. Go to IRS.gov and click on the ‘IRS e-file’ icon to review your options. If you still need a paper form you can visit IRS.gov/Forms to

 

Monthly Newsletter for January 2015

by in Newsletter on Jan. 2, 2015

Monthly Newsletter for January 2015

 

During January

 

All Employers:  Give your employees their copies of Form W-2 for 2014 by February 2, 2015.

All Businesses:  Give annual information statements to recipients of certain payments you made during 2014.  You can use the appropriate version of Form 1099 or other information return.  Payments that may be covered include the following:

Cash Payments for fish or other aquatic life purchased from anyone engaged in the trade or business of catching fish.

Compensation for workers who are not considered employees.

Dividends and other corporate distributions.

Interest, Rent, and Royalties.

Payments of Indian gaming profits to tribal members.

Profit-sharing distributions, Retirements plan distributions, Original issue discount, prizes and awards.

Medical and health care payments.

Debt cancellation (treated as payment to debtor).

Cash payments over $10,000.

 

  New Year, New Tax Guidelines

Every New Year brings at least a few new IRS guidelines and 2015 is no different.  Brown Jenkins & Oneyear, PA, has put together a list of the most noteworthy changes.  While this list is not comprehensive, it will help most businesses and individuals understand the major changes.

 

 2015 Tax Quick Reference Table

 

Mileage Rates:                                      2014                                                            2015

                Business                                   56.0                                                   57.5 cents per mile                          Charitable                                14.0                                                        14.0 cents per mile                                          Medical & Moving                23.5                                                   23.0 cents per mile

Child Tax Credit                                                                                                 $1.000

Estate Tax Applicable Credit Equivalent                                                  $5,430,000

Gift Tax Applicable Credit Equivalent                                                       $5,430,000

 

Gift Tax Annual Exclusion                                                                             $14,000

Social Security Withholding Tax Wage Base                                          $118,500.

Medicare Withholding Tax Wage Base                                                    Unlimited

Federal Unemployment Tax Wage Base                                                                $7,000

NC Unemployment Tax Wage Base                                                         $21,700

Threshold for Nanny Tax                                                                              $1,900

Maximum 401(k)/403(b) Salary Deferral                                                                $18,000; $24,000 if age 50

Maximum SIMPLE Plan Salary Deferral                                                   $12,500; $15,500 if age 50

Maximum IRA Annual Contribution Limitation                                    $5,500; $6,500 if age 50

Profit-Sharing Contribution Limitation                                                    $53,000

Annual Compensation Limitation                                                              $265,000

for Defined Contribution Plan

 

Social Security Cost of Living Adjustment                                              1.7%

(COLA) for Social Security Beneficiaries

Earning Ceilings for Social Security:

Below Full Retirement Age (FRA)                                              $15,720 Lose $1 for $2 earned

Year FRA is Attained                                                                       $41,880 Lose $1 for $3 earned

After FRA is Attained                                                                      Unlimited