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Showing posts with label tax law. Show all posts
Showing posts with label tax law. Show all posts

Wednesday, January 22, 2014

Change to IRS Help Line for 2014 Filing Season

The IRS Help Line will be changing how they respond to tax law related questions beginning with the 2014 filing season. These changes are being made in an effort to persuade taxpayers to use the IRS website and other resources to get answers to their tax law related questions. Additionally, the changes would allow the IRS to save money and for the IRS Help Line to be utilized more effectively.
The changes will be as follows:
  • January 1 - April 15
    IRS will answer basic tax law questions when a taxpayer calls the IRS Help Line. Basic tax law questions are defined as questions pertaining to Forms 1040A, 1040EZ, and related area on Form 1040 such as filing status, dependents, exemptions and taxable income.
    More complex tax law questions will not be answered. Instead, the IRS help line will be referring taxpayers to other resources available on IRS.gov such as the Interactive Taxpayer AssistanceTax Trails, IRS tax publications, and other resources such as the tax software product they are using to get answers to these questions.
  • April 16 - December 31 
    Any tax law related questions (both basic and complex) asked by taxpayers will be referred to other resources available on IRS.gov, IRS tax publications, and other resources such as the tax software product they are using.
See Some IRS Assistance and Taxpayer Service Shift to Automated Resources on the IRS website for more details on this change and other changes the IRS is making to their website.

Wednesday, March 27, 2013

IRS Update: Safeguarding Taxpayer Data

The IRS requires all tax professionals to implement safeguards to protect taxpayer data. This includes paper data as well as electronic data. Read more

Under IRS Revenue Procedure 2007-40 (rules governing e-file providers and the overall IRS e-file program), Section 5.03 states:

The security of taxpayer accounts and personal information is a top priority for the Service. It is the responsibility of each Authorized IRS e-file Provider to have security systems in place to prevent unauthorized access to taxpayer accounts and personal information by third parties . . . Read more

The IRS has created publications to provide guidance to the tax professional community to help them meet their responsibilities for safeguarding taxpayer data. Read the publications here.

Click here to read the entire CrossLink Tax Update about safeguarding taxpayer data.

Tuesday, January 8, 2013

IRS Announcement: IRS Delays Start of the 2013 Tax Season

"January 8, 2013

WASHINGTON — Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on Jan. 30.

The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted Jan. 2. The announcement means that the vast majority of tax filers -- more than 120 million households -- should be able to start filing tax returns starting Jan 30.

The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.

“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”

The IRS will not process paper tax returns before the anticipated Jan. 30 opening date. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.

“The best option for taxpayers is to file electronically,” Miller said.

The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on Jan. 1, 2013, with many affecting tax returns for 2012. While the IRS worked to anticipate the late tax law changes as much as possible, the final law required that the IRS update forms and instructions as well as make critical processing system adjustments before it can begin accepting tax returns.

The IRS originally planned to open electronic filing this year on Jan. 22; more than 80 percent of taxpayers filed electronically last year.

Who Can File Starting Jan. 30?
The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.

Who Can’t File Until Later?
There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.

The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available on IRS.gov.

As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure as smooth a tax season as possible under the circumstances.

Updated information will be posted on IRS.gov."

(The above content is as it appeared in an official IRS press release distributed on January 8th, 2013.)

Thursday, January 3, 2013

IRS Update: Tax Relief Extension Act

Expired 2012 Federal Tax Provisions Extended by the Tax Relief Extension Act

Late on January 1, 2013, Congress passed HR 8 (Tax Relief Extension Act) which extended almost all of the Federal tax provisions that had expired at the end of 2011 and 2012.

Although the Tax Relief Extension Act contains many individual, business, and energy tax provisions that were extended or modified, the following are the ones that will have the most impact on taxpayers filing their 2012 Federal returns this coming filing season.

Alternative Minimum Tax (AMT)
The Alternative Minimum Tax (AMT) provisions were permanently extended as follows:
  • The exemption amount will be indexed for inflation each year. For 2012 the exemption amounts are:
    • Single/Head of Household: $50,600
    • Married Filing Joint: $78,750
    • Married Filing Separate: $39,375
  • All personal nonrefundable credits may be used in calculating the AMT. This also means that the order these credits are taken against regular tax will remain as they currently are.

Individual and Business Provisions
The following individual and business provisions were extended and will apply to Tax Years 2012 and 2013:
  • $250 Educator Expense Deduction – Form 1040, line 23
  • Tuition and Fees Deduction – Form 8917 and Form 1040, line 34
  • Read more

Section 179 Expense
The following Section 179 provisions were extended and will apply to tax years 2012 and 2013:
  • Maximum deduction: $500,000
  • Maximum cost before the limit is reduced: $2,000,000
  • Read more

Click here to read the entire CrossLink Tax Update that includes further information on the Tax Relief Extension Act and Federal tax provisions that were and were not extended.

Wednesday, December 12, 2012

IRS Update: Reminders for Year End and the Upcoming Filing Season

As we approach the end of 2012 and the start of the 2013 Filing Season, here are some reminders and things to know:

Start of Filing Season

The 2013 Filing Season will open on Tuesday, January 22, 2013. This is the day after Martin Luther King Jr.’s Birthday.

Renewing Your PTIN

If you have not already done so, you must renew your PTIN for 2013 before you begin to prepare 2012 returns. Click here to read more.

Continuing Education for Registered Return Preparers

It is very important to remember that all registered tax return preparers and return preparers with provisional PTINs must complete 15 hours of continuing education by the end of 2012. Click here to read more.

Increased Emphasis on Fraud by IRS

Due to the significant increase in the filing of fraudulent returns and identity theft, the IRS will be increasing their fraud filters for the upcoming filing season. Click here to read more.

Click here to read the entire CrossLink Tax Update that includes further information on reminders for year end and the 2013 Filing Season.

Wednesday, November 14, 2012

IRS Update: Small Business Health Care Tax Credit

This is a reminder that the small business health care tax credit is available to businesses with 25 or fewer employees and who offer health insurance to their employees. Eligible small employers may claim this credit when they file their 2012 Federal return using Form 8941 (Credit for Small Employer Health Insurance Premiums).

This credit has been available since 2010 and its purpose is to help eligible small businesses pay for their health insurance premiums for their employees.

Here is how the credit works:
  • The credit is available to employers with 25 or fewer full-time equivalent employees whose average annual salaries are not more than $50,000.
  • The credit is calculated on a sliding scale with a maximum credit of 35% of the employer’s contribution toward their employees’ health insurance premiums.
  • Read more
Click here to read the entire CrossLink Tax Update that includes further information on the Small Business Health Care Tax Credit.

Wednesday, October 31, 2012

Status of Federal Tax Provisions Not Applicable for 2012 Tax Returns

As we informed you in May 2012, the “Extender” tax provisions expired at the end of 2011 and, as of right now, they are not applicable to 2012 Federal returns.

At the present time it is not clear when Congress will take action on the expired provisions. Since the Extender provisions are closely tied to “Bush Era Tax Cut” provisions (which expire at the end of 2012) including the automatic budget cuts (Sequestration) and the extension of the debt limit, it appears that the earliest they will be acted upon is late December 2012.

A total of 58 individual and business Federal tax provisions expired at the end of 2011. What follows is a list of the expired or changed provisions that will have the most impact to taxpayers on their 2012 Federal returns if they are not extended.

Provisions no longer applicable for Tax Year 2012 returns:
  • $250 Educator Expense Deduction – Form 1040, line 23
  • Tuition and Fees Deduction – Form 8917 and Form 1040, line 34
  • Read more
Provisions that changed significantly for Tax Year 2012 returns:
  • Alternative Minimum Tax (AMT) exemption amounts revert to what they were in Tax Year 2000
  • Maximum Section 179 Deduction amount has been reduced to $139,000 for 2012
  • Read more
Click here to read the entire CrossLink Tax Update that includes further information on Federal Tax Provisions not applicable for 2012 tax returns.
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