The new tax law that was enacted on December 22, 2017 changes the rules for alimony. The deduction for alimony paid and the inclusion in gross income of alimony received is eliminated for new divorce or separation agreements executed after December 31, 2018 and for some agreements that are modified after that date. All agreements executed on or before that date will continue to follow the ol...
The new 2018 withholding tables that were issued by the IRS earlier this year often result in a substantial reduction in federal withholding. Planning for this is a vital issue. In advance of the due date for second quarter estimated tax payments, practitioners should consider warning clients about the potential need to adjust their withholding. In addition, clients that are making estimat...
As discussed in our post on February 13, 2018, the tax law enacted in February made a retroactive change resulting in certain previously-expired provisions becoming available for the 2017 tax year. The most significant of these extended provisions included: — The above-the-line deduction for higher education tuition/fees — The mortgage insurance premiums deduction on Schedule A —...
The IRS e-file system was having technical problems on the morning of April 17, 2018. Practitioners should continue to e-file returns as usual through their tax software, but they should expect delays in receiving acknowledgements for returns filed in the last day or so. This provides an interesting end to the tax season!
As was the case last year, the due date for filing the Report of Foreign Bank and Financial Accounts (FBAR) for foreign financial accounts is April 15, but for the 2017 tax year, the due date was moved to April 17, 2018. All taxpayers are granted an automatic six-month extension to October 15 to file the FBAR, and taxpayers do not need to file any request for an FBAR extension.
The new tax law, which was enacted on December 22, 2017, makes changes to the rules for the penalty for not having health insurance (line 61 on Form 1040), but those changes are not effective for the 2017 or 2018 tax years. Clients remain subject to the penalty for not having health insurance for themselves, their spouses and/or their dependents until the 2019 tax year. Beginning in 2019, th...
As was the case in prior years, some Forms W-2 for the 2017 tax year will contain a 16 character verification code in box 9 of the form. The IRS has requested that practitioners who see this code in box 9 of Form W-2 enter it into their tax preparation software for the applicable client recipient. However, entering the code is not required. This is a pilot program started by the IRS in ea...
A health savings account (HSA) allow taxpayers (or their employers) with high deductible health insurance plans to contribute funds on a pre-tax basis to the HSA for the purpose of paying future medical expenses. The dollar limit for contributions to HSAs for the 2018 tax year was announced in 2017. However, as part of the new tax law that was enacted on December 22, 2018, the inflation adju...
Important Reminder: 2017 Partnership Tax Returns are due on Thursday, March 15, 2018. Last year was the first year when partnership tax returns (Forms 1065) were due on March 15th, instead of the later due date that used to apply in earlier tax years. Some entities missed that due date for the 2016 tax year, and the IRS later provided special relief provisions for those who missed the new du...
The IRS has released its new withholding calculator, but tax professionals have likely already been using the withholding calculators available in their payroll and tax preparation software to estimate the withholding expected for clients during 2018. As discussed in an earlier post, it is essential for practitioners to project the 2018 tax liability for their clients using the new provisions ...
