Tax-Payroll TAX

12/22/2018

Hello Everyone,

The Internal Revenue Service issued Revenue Procedure 2019-08 today to provide guidance on deducting expenses under Section 179(a) and on deducting depreciation under Section 168(g). These rules, as amended by the Tax Cuts and Jobs Act (TCJA) in December 2017, generally apply to tax years beginning after 2017.

Section 179 allows taxpayers to deduct the cost of certain property as an expense when the property is placed in service. For tax years beginning after 2017, the TCJA increased the maximum Section 179 expense deduction from $500,000 to $1 million. The phase-out limit increased from $2 million to $2.5 million. These amounts are indexed for inflation for tax years beginning after 2018.

The Section 179 deduction applies to tangible personal property such as machinery and equipment purchased for use in a trade or business, and if the taxpayer elects, qualified real property. The TCJA amended the definition of qualified real property to mean qualified improvement property and some improvements to nonresidential real property, such as roofs; heating, ventilation and air-conditioning property; fire protection and alarm systems; and security systems. Revenue Procedure 2019-08 explains how taxpayers can elect to treat qualified real property as Section 179 property.

For tax years beginning after 2017, the TCJA also expanded the businesses that must use the alternative depreciation system under Section 168(g) (ADS). A farming business can elect out of the interest deduction limit of Section 163(j). If it does, the business must use the ADS for property with a recovery period of 10 years or more. A real property trade or business can also elect out of the Section 163(j) limit. If it does, the business must use the ADS for nonresidential real property, residential rental property, and qualified improvement property. Revenue Procedure 2019-08 explains how electing real property trades or businesses or farming businesses change to the ADS for property placed in service before 2018, and provides that it is not a change in accounting method.

Finally, the TCJA changed the ADS recovery period of residential rental property. For property placed in service after 2017, the recovery period is 30 years. It was formerly 40 years. Revenue Procedure 2019-08 provides an optional depreciation table for residential rental property depreciated under the ADS with a 30-year recovery period.

P.S. IRS SOURSE

PDO SERVICES

11/23/2017

Select your number of dependents below to see how much you may qualify for:

Number of Qualifying Children CA Maximum Income Cal EITC (up to) IRS EITC (up to)
None $15,008 $223 $510
1 $22,322 $1,495 $3,400
2 $22,309 $2,467 $5,616
3 or more $22,302 $2,775 $6,318

Press enter to show or hide content forWho qualifies?
For the 2017 tax year, this credit is available to California households with adjusted gross incomes of up to $15,008 if there are no qualifying children, up to $22,322 if there is one qualifying child, up to $22,309 if there are two qualifying children, and up to $22,302 if there are three or more qualifying children.
You qualify for Cal EITC for the 2017 tax year if:
• You have wages, self-employment income and adjusted gross income within certain limits, AND
• You, your spouse, and any qualifying children each have a Social Security Number issued by the Social Security Administration that is valid for employment, AND
• You do not use the “married/RDP filing separately” filing status, AND
• You lived in California for more than half the tax year.
Qualification Description
Earned Income Eligible sources of earned income from:
• W-2 wages.
• Self-employment
• Salaries, tips.
• Other employee compensation subject to California withholding.
Note: The 2017 tax year is the first time self-employment income can be used to qualify for CalEITC.
Maximum Income Limit Both your adjusted gross income and earned income (defined above) may be up to:
• $15,008 if there are no qualifying children.
• $22,322 if there is one qualifying child.
• $22,309 if there are two or more qualifying children.
• $22,302 if there are three or more qualifying children.
Your investment income, such as interest, dividends, royalties, and capital gains cannot exceed $3,561 for the entire tax year.
Filing Status You may file as:
• Single.
• Married/Registered Domestic Partner (RDP) filing jointly.
• Head of Household (HOH).
Note: Married/RDP Filing Separately status may not be used.
Qualifying Child Your qualifying child must meet three criteria:
• Relationship - Is the taxpayer’s child, stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of any of them.
• Residence - Had the same principal residence as the taxpayer in California for more than half the tax year. Certain exceptions apply.
• Age - Child must be younger than the taxpayer and either a) under the age of 19 at the end of the tax year, or b) under the age of 24 if a full-time student for at least five months of the year. A permanently and totally disabled child may be included at any age.
The child only qualifies for one return. If the child can be claimed by more than one taxpayer, the child’s qualification goes to:
• The parent.
• If more than 1 taxpayer is the child’s parent, the parent with whom the child lived for the longest time during the year, or if the time was equal, the parent with the highest adjusted gross income (AGI).
• If no eligible parent claims the child, the individual claiming the child, if the individual's AGI exceeds the AGI of any parent eligible to claim the child.
If no taxpayer is the child’s parent, the taxpayer with the highest AGI.
Residency Your principal residence must be in California for more than half the tax year.
Age If you do not have a qualifying child, you (or your spouse if you file a joint return) must be between 25 and 65 years old at the end of the tax year.

P.S: source from FTB

11/18/2017

Hello Everyone,
Tax 2017 season is around corner. It's also the time for taxpayers to prepare some steps for smooth processing of their 2017 tax return and avoid a delay in getting their refund next year.

Taxpayers should gather all the documents before they file their returns, including their 2016 tax return. This includes Forms W-2 from employers, Forms 1099 from banks and other payers, and Forms 1095-A from the Marketplace for those claiming the Premium Tax Credit.
Doing so will help avoid refund delays and the need to file an amended return later. Confirm that each employer, bank or other payer has a current mailing address. These forms start arriving by mail in January. Check them over carefully, and if any of the information shown is inaccurate, please contract the payer right away for a correction.

In addition, for all the taxpayers using a software production for the first time may need the ADJUSTED GROSS INCOME (AGI) amount from their 2016 tax return to properly e-file their 2017 tax return.

11/13/2017

Just knock each door and delivery!

11/04/2017

TABLE SUMMARIES THE BASIS 2017 FILING THRESHOLDS

PERSONAL EXEMPTION BASIS STANDARD DEDUCTION FILING THRESHOLD
SINGLE $4,050.00 $6,350.00 $10,400.00
MARRIED-JOINT $8,100.00 $12,700.00 $20,800.00
MARRIED-SEPARATE $4,050.00 $6,350.00 $10,400.00
HEAD OF HOUSEHOLD $4,050.00 $9,350.00 $13,400.00

11/04/2017

IRS Statement on 2018 Filing Season Start Date
The IRS has not yet announced a date that it will begin accepting individual tax returns for the 2018 tax filing season. At the present time, the IRS is continuing to update its programming and processing systems for 2018. In addition, the IRS continues to closely monitor potential legislation that could affect the 2018 tax season, including a number of “extender” tax provisions that expired at the end of 2016 that could potentially be renewed for tax year 2017 by Congress.

The IRS anticipates it will not be at a point to announce a filing season start date until later in the calendar year. The IRS will continue to work closely with the nation’s tax professionals and software community as preparations continue for the 2018 tax filing season.

Speculation on the Internet that the IRS will begin accepting tax returns on Jan. 22 or after the Martin Luther King Jr. Day holiday in January is inaccurate and misleading; no such date has been set.

09/27/2017

Ready for Q3 payroll tax!

09/02/2017

Learn about Tax Benefits for Education

The beginning of the school year is a good time for a reminder of the tax benefits for education. These benefits can help offset qualifying education costs.

Here is information about two tax credits available to those who pay higher education costs for themselves, a spouse or a dependent.

The American Opportunity Tax Credit (AOTC) is:

Worth a maximum benefit up to $2,500 per eligible student.
Only available for the first four years at an eligible educational or vocational school.
For students pursuing a degree or other recognized education credential.
Partially refundable. Eligible taxpayers can get up to $1,000 of the credit as a refund, even if they do not owe any tax.
The Lifetime Learning Credit (LLC) is:

Worth up to $2,000 per tax return, per year, no matter how many students qualify.
Available for all years of postsecondary education and for courses to acquire or improve job skills.
Available for an unlimited number of tax years
Taxpayers should use Form 8863, Education Credits, to claim these education credits.

Additionally:

A student is required to have Form 1098-T, Tuition Statement, to be eligible for an education benefit. They receive this form from the school attended.
Taxpayers may use only qualified expenses paid to figure a tax credit. These include tuition and fees and other related expenses for an eligible student.
Eligible educational schools are those that offer education beyond high school. This includes most colleges and universities.
Taxpayers may only claim qualified expenses in the year paid.
Taxpayers can’t claim either credit if someone else claims them as a dependent.
Income limits could reduce the amount of credits.
Taxpayers can’t claim either the AOTC or LLC for the same student or for the same expense in the same year.
The Interactive Tax Assistant tool on IRS.gov can help determine eligibility for certain educational credits including the American Opportunity Credit and the Lifetime Learning Credit.
See IRS Publication 970, Tax Benefits for Education, for details, rules, examples and a complete explanation of benefits.

Avoid scams. The IRS does not initiate contact using social media or text message. The first contact normally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

08/26/2017

Insurance company

08/26/2017

Job Search Expenses Can be Tax Deductible

Taxpayers who are looking for a new job that is in the same line of work may be able to deduct some job-hunting expenses on their federal income tax return, even if they don’t get a new job.

Here are some important facts to know about deducting costs related to job searches:

Same Occupation. Expenses are tax deductible when the job search is in a taxpayer’s current line of work.
Résumé Costs. Costs associated in preparing and mailing a résumé are tax deductible.
Travel Expenses. Travel costs to look for a new job are deductible. Expenses including transportation, meals and lodging are deductible if the trip is mainly to look for a new job. Some costs are still deductible even if looking for a job is not the main purpose of the trip.
Placement Agency. Job placement or employment agency fees are deductible.
Reimbursed Costs. If an employer or other party reimburses search related expenses, like agency fees, they are not deductible.
Schedule A. Report job search expenses on Schedule A of a 1040 tax return and claim them as miscellaneous deductions. The total miscellaneous deductions cannot be more than two percent of adjusted gross income.
Taxpayers can’t deduct these expenses if they:

Are looking for a job in a new occupation,
Had a substantial break between the ending of their last job and looking for a new one, or
Are looking for a job for the first time.
For more on job hunting, refer to Publication 529, Miscellaneous Deductions. IRS tax forms and publications are available any time on IRS.gov/forms.

Avoid scams. The IRS does not initiate contact using social media or text message. The first contact normally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

Insurance company

08/26/2017

Job Search Expenses Can be Tax Deductible

Taxpayers who are looking for a new job that is in the same line of work may be able to deduct some job-hunting expenses on their federal income tax return, even if they don’t get a new job.

Here are some important facts to know about deducting costs related to job searches:

Same Occupation. Expenses are tax deductible when the job search is in a taxpayer’s current line of work.
Résumé Costs. Costs associated in preparing and mailing a résumé are tax deductible.
Travel Expenses. Travel costs to look for a new job are deductible. Expenses including transportation, meals and lodging are deductible if the trip is mainly to look for a new job. Some costs are still deductible even if looking for a job is not the main purpose of the trip.
Placement Agency. Job placement or employment agency fees are deductible.
Reimbursed Costs. If an employer or other party reimburses search related expenses, like agency fees, they are not deductible.
Schedule A. Report job search expenses on Schedule A of a 1040 tax return and claim them as miscellaneous deductions. The total miscellaneous deductions cannot be more than two percent of adjusted gross income.
Taxpayers can’t deduct these expenses if they:

Are looking for a job in a new occupation,
Had a substantial break between the ending of their last job and looking for a new one, or
Are looking for a job for the first time.
For more on job hunting, refer to Publication 529, Miscellaneous Deductions. IRS tax forms and publications are available any time on IRS.gov/forms.

Avoid scams. The IRS does not initiate contact using social media or text message. The first contact normally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

Annual income tax return filed by citizens or residents of the United States.Related: Instructions for Form 1040, Instructions for 1040 Tax Table, Schedule A (Form 1040), Schedule C (Form 1040)

08/26/2017

File Form 1040X to Amend a Tax Return
Mistakes happen and tax returns are no exception. Filing an amended tax return corrects information that changes tax calculations. This includes making changes to filing status and dependents, or correcting income credits or deductions. Don’t file an amended return to fix math errors because the IRS will correct those.

The IRS offers tips on how to amend a tax return:

File using paper form. Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct errors to an original tax return the taxpayer has already filed. Taxpayers can’t file amended returns electronically. Mail the Form 1040X to the address listed in the form’s instructions.

Preparing Form 1040X. Many taxpayers find the easiest way to figure the entries for Form 1040X is to make the changes in the margin of the original tax return and then transfer the numbers to their Form 1040X. Taxpayers should be sure to check a box at the top to show the year they are amending. Form 1040X will be the taxpayer’s new tax return, changing the original entries to include new information. Taxpayers should explain what they are changing and why on the second page of Form 1040X in Part III.

Know when to amend. Taxpayers should amend a tax return to correct their filing status, the number of dependents or total income. They should also amend to claim deductions or credits not claimed or to remove deductions and credits they are not entitled to on the original return. The instructions for Form 1040X, Amended U.S. Individual Income Tax Return, list more reasons to amend a return.

Know when NOT to amend. In some cases, it is not necessary to amend a tax return. Taxpayers should not worry about math errors because the IRS will make the correction. Taxpayers do not need to amend their return if they forgot to include a required form or schedule. The IRS will mail a request to the taxpayer, if needed.

Use separate forms for each tax year. Taxpayers amending tax returns for more than one year will need a separate 1040X for each tax year. Mail each tax year’s Form 1040X in separate envelopes. See "Where to File" in the instructions for Form 1040X for the correct address.

Include other forms or schedules. If a taxpayer makes changes to any form or schedule, they should attach them to the Form 1040X when filing. Not doing so could cause a delay in processing.

Wait to file for corrected refund for tax year 2016. Taxpayers should wait for the refund from their original tax return before filing an amended return. It is okay to cash the refund check from the original return before receiving any additional refund. Amended returns can take up to 16 weeks to process.

Pay additional tax. Taxpayers filing an amended return because they owe more tax should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges.

File within three-year time limit. Generally, to claim a refund, taxpayers must file a Form 1040X within three years from the date they timely filed their original tax return or within two years from the date the person pays the tax, whichever is later. For taxpayers who filed their original return early (for example, March 1 for a calendar year return), their return is considered filed on the due date (generally April 15).

Track your amended return. Taxpayers can track the status of an amended return three weeks after filing. Go to “Where’s My Amended Return?” or call 866-464-2050.