Thursday, November 15, 2018

NJ STATE TAX AMNESTY PROGRAM


This just in - the State of New Jersey’s latest Tax Amnesty Program has begun!    

Under the program you will only pay the amount of outstanding tax you owe and one-half of the balance of interest due (as of November 1, 2018).  You will not be charged any penalties, “Referral Cost Recovery Fees”, or cost of collection fees.  You also avoid a 5% amnesty penalty that will be assessed on all eligible tax balances remaining after the amnesty period ends.  This 5% amnesty penalty cannot be waived or abated.

The amnesty period begins November 15, 2018 and ends January 15, 2019.  If you have an outstanding tax balance you should be notified by mail on or about November 15th. This notice will provide instructions on how to participate in the program.

The program covers liabilities incurred for tax returns due on or after February 1, 2009 and prior to September 1, 2017 for all taxes administered and collected by the New Jersey Division of Taxation.  Amnesty is not available for local property taxes and payroll taxes owed to the New Jersey Department of Labor.   

NJ has created a special NJ Tax Amnesty website with information, guidelines, forms and FAQs.

The website tells us -

"All requests for amnesty must be filed electronically. To apply, log in to our Amnesty Processing Center using the Amnesty ID and PIN printed on your amnesty notice. Once you are logged in, you can:

·         View your balance(s) due;
·         View any delinquent tax returns;
·         Submit a payment.

If you have not received a notice and want to submit a payment or file delinquent returns, visit the Non-Outreach Portal. You will be prompted for the required information for identification purposes."

TTFN







ASK THE TAX PRO - FROM THE EMAIL BAG


I was surprised to get the following email question from a taxpayer -

I read your article on MSN stating that you can no longer deduct mileage for business.  

I reached out to the IRS and according to the website you still can.

Please let me know.”

FYI, the item the writer was referring to was “10 things you can't deduct from your taxes anymore”.

My response -

Employee business expenses, including business mileage by an employee, along with the other Miscellaneous Expenses that had been subject to the 2% of AGI limitation, are not deductible on Schedule A of Form 1040 for 2018 through 2025 as a result of the GOP Tax Act.

An employee who is not reimbursed for business mileage by his employer cannot deduct business mileage as a Miscellaneous Expense on Schedule A.

Self-employed taxpayers filing Schedule C or C-EZ can still deduct business mileage. 

Farmers filing Schedule F can still deduct business mileage. 

Landlords can still deduct business mileage related to rental properties on Schedule E. 

Employers can still reimburse employees for business mileage and claim a deduction on their business tax return.”

The bottom line – the deduction for using your car for business, whether you claim the Standard Mileage Allowance or the business use percentage of actual expenses, is still allowed as a business expense on business returns – Schedule C or C-EZ, Schedule E, Schedule F, Form 1120 and 1120-S, and Form 1065.  It is an ordinary and necessary expense of doing business. 

But employees can no longer deduct any unreimbursed business expenses on Schedule A.  This includes business mileage, union or professional dues, job-related education, tools and supplies, home-office expense, business use of a computer or cell-phone, etc, etc, etc.

Employee business expenses, and the other Miscellaneous itemized deductions that were temporarily done away with by the GOP Tax Act, including business mileage, are deductible on the 2017 Schedule A for those, like a couple of my clients, who have still not filed their 2017 Form 1040.

If an IRS employee is telling taxpayers anything otherwise then he or she is wrong.  I do believe that IRS employees, especially those who are answering questions from the public, have been trained in the new law.  I expect that the taxpayer probably did not ask the question of the IRS person correctly.

Are they any other aspects of the GOP Tax Act that you want clarified?

TTFN







Tuesday, November 13, 2018

WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’?


* Have you checked out the latest “issue” of THE LAKE REGION SOMETHING?

* Kay Bell explains “When health insurance premiums are tax deductible” at DON’T MESS WITH TAXES.

* And Kay continues her post medical procedure recovery with more discussion of medical itemized deductions in “Thumbing through the IRS' medical deduction (or not) list”.

* Another Kay Bell trifecta, with Kay's suggestions on “How to help California wildfire victims”.

* A good primer on “What Happens to a Joint Account When One of the Owners Dies?” by Julie Garber at THE BALANCE.  Julie reviews the income tax, estate tax, and other consequences.

* Tony Nitti is running a post series on “The Top Tax Court Cases Of 2018” at FORBES.COM.  He starts off with “Conner V. Commissioner Was A Real Estate Potpourri”.

* Friday’s “Ask The Taxgirl” post from Kelly Phillips Erb dealt with the “Standard Deduction Versus Itemized Deductions”.

THE LAST WORD

Part One -

Why do people assume that those who oppose and denounce Donald T Rump, and the Republicans who support and defend him, MUST be liberals?

1. Trump is a deplorable and despicable human being.

2. Trump is NOT a conservative.  Read this!

Part Two –

Do you know what Donald T Rump really believes?  Click here to find out.

TTFN




















Friday, November 9, 2018

A LITTLE THIS-A AND A LITTLE THAT-A


A potpourri of tax “stuff” -

+ The IRS recently announced, in Notice 2018-83, the contribution limits for retirement plans for calendar year 2019.

The maximum contribution to a traditional or ROTH IRA, or a combination of the two, is increased from $5,500 to $6,000.  The catch-up contribution for individuals age 50 or older remains at $1,000.

The maximum contribution to a 401(k), 403(b) and 457 retirement plans is increased from $18,500 to $19,000.  The catch-up contribution remains at $6,000.

The maximum contribution to a SIMPLE retirement plan is increased from $12,500 to $13,000.  The catch-up contribution remains at $3,000.

The maximum contribution to a SEP or Solo401(k) plan is increased from $55,000 to $56,000.  SEP and Solo401(k) contributions are based on a % of “compensation” or adjusted net earnings from self-employment.

+ Usually you are given the option of having IRA administrative, custodial or management fees deducted from the account balance or paying them directly by personal check.  You should pay these fees directly by sending the trustee a check.

By doing this you increase the tax-deferred accumulation within the account, so more money is available at retirement.

A reminder – investment expenses like IRA administrative, custodial or management fees are no longer deductible on Schedule A.  

+ Beginning in 2018 job-related moving expenses are no longer deductible.  And reimbursements of these deductible job-related moving expenses are included in taxable wages reported on Form 1040.  For tax years 2018 through 2025 only moving expenses incurred by a member of the Armed Forces on active duty who moves due to a military order are deductible.

However, according to IRS Notice 2018-75, if you made a job-related move in calendar year 2017 any qualified moving expenses related to the move that you were reimbursed by your employer in calendar year 2018 are excluded from gross taxable wages, if the reimbursement would have been excludable from income if made in calendar year 2017.  

+ Now that the Democrats, thankfully, control the House the GOP Tax Act will not be made permanent. 

FYI, here is my take on what true “tax reform” should look like – THE TAX CODE MUST BE DESTROYED.

What do you think?

TTFN
















Wednesday, November 7, 2018

WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’?

 OH HAPPY DAY!

* Have you checked out the new “issue” of THE LAKE REGION SOMETHING?

* Tony Nitti is back posting at FORBES.COM with a new “Tax Geek Tuesday” on “Reaping The Benefits Of Investing In An Opportunity Zone”.

None of the GOP Tax Act explanatory sessions I have attended so far even mentioned this new tax benefit – which actually sounds pretty good.  It has only been mentioned recently because the IRS has released proposed regulations.  I look forward to hearing more about this, hopefully, at the NATP year-end tax update seminar in Atlantic City later this month.

* It’s back!  My TAX GUIDE FOR NEW HOMEOWNERS.  And it’s updated for the changes enacted by the GOP Tax Act.  A great gift for new homeowners at Christmas, or any time of the year,

* Kelly Phillips Erb, the internet’s TAXGIRL, provides us with “A Quick Comparison Of Tax Reform Changes” via some helpful visuals.

* Let me educate you on to pay the absolute least amount of federal income tax possible.  Join my special exclusive members-only Facebook Group THE NATIONAL TAX PLANNING NETWORK for only $9.95!

Subscribers can download for free such files as “What’s New for 2018”, “Comparison of Tax Law 2018 vs 2017”, “2017 Tax Calculation Using GOP Tax Act Rules”, “Preliminary Tax Return Worksheet”, and a compilation of Tax Forms, Schedules and Worksheets to help in preparing your returns.  And they receive a special discount on all my tax planning and preparation books and reports.

* Returning to TaxGirl Kelly Phillips Erb, has brought back her popular contest for tax students, which she explains in “Tax Student Writing Contest: Win An A” -

Write an article about a hot tax policy issue. I’m not looking for a news or legal summary, I want a policy post. Pick an issue, take a position, and explain why it matters in the tax world.

* And for the trifecta the TaxGirl brings back her “Getting To Know You Tuesday” series with a Q&A with “Manasa Nadig, EA”.

THE LAST WORD

A day of great celebration.  The Democrats now control the House!

This is a day to celebrate not because the programs and policies of the Democratic Party are superior to those of the Republican Party – although in most cases, since today’s Republican Party has truly become the Party of Trump, this is true. 

It is a day to celebrate because it is, hopefully, the beginning of the end of Donald T Rump and our national nightmare.  The arrogant idiot will finally begin to be properly investigated and held accountable for his unacceptable, indefensible, unethical, illegal and un-American actions and behavior.

Trump himself said, correctly for once in his life, that this election was about him (of course he did, because everything with Trump MUST be about him).  Trump lost!

It is disappointing that the Democrats lost some ground in the Senate.  But there were gains in Democratic governors.  And the Democratic victories resulted in more diversity. 

A message has been sent to the Republicans in Washington that their despicable and deplorable acceptance and defense of Trump and his behavior has consequences.  

It is proof that there are more intelligent Americans with a conscience than there are ignorant and racist Americans like Trump himself.  Although the margin is disappointing, with 46% of the voters choosing Republican candidates.  

And now we work toward the day when America finally says to Trump, "You're fired"! 

TTFN








Tuesday, November 6, 2018

VOTE!



NO BUZZ TODAY.

BE SURE TO VOTE TODAY 
AGAINST 
ALL REPUBLICAN CANDIDATES - 

THE FUTURE OF AMERICA 
DEPENDS ON IT!

COME BACK TOMORROW FOR BUZZ.













Monday, November 5, 2018

VOTE AS IF AMERICA’S FUTURE DEPENDS ON IT – BECAUSE IT DOES!


It is absolutely vital for the future of America and the world that Americans vote tomorrow AGAINST all Republican candidates for Congress.  No election in recent history has been more important.

A vote FOR Republicans is a vote of support and defense for the Presidency of Donald Trump.  The Republicans in Congress have irresponsibly chosen to blindly support and defend indefensible Donald Trump.  Trump is a delusional, ignorant, immature, incompetent, totally self-absorbed and self-important mentally unstable narcissist and sociopath.  His Presidency emboldens and empowers bigotry, racism, and misogyny.  Every day he is in office Trump demeans and degrades American democracy, values and credibility and the office of the President of the United States.   

A vote AGAINST Republicans is a vote for a Congress that will oppose and denounce Donald Trump, work to minimize the damage of his Presidency, and hold him accountable for his many unethical and illegal behaviors.

The list of reasons to oppose and denounce Trump is almost endless.   What is most troubling, dangerous, inappropriate, indefensible and unacceptable is the proven fact that every single thing he says, “tweets” and does is based SOLELY on his self-interests and his delusional self-importance.  His need to feed his undeservedly enormous ego and maintain his perception of perfection and infallibility is his ONLY motivating factor. What is good for America, Americans, the Republican Party, and the world NEVER enters into any of his thinking and action.

This is not about voting for Democratic candidates because Democratic and liberal politics and policies are better than traditional Republican and conservative politics and policies.  It is about defending America, Americans and the world from the most dangerous and unfit person ever to occupy the White House.

Before the 2016 Presidential election America WAS great.  But under the Presidency of Donald Trump, and the irresponsible and hypocritical blind support of the Republican controlled Congress, America is NO LONGER great.  To truly make America great again we must remove control of Congress from the Republican Party and ultimately remove Donald Trump from the White House.














Friday, November 2, 2018

DEPENDENTS AND THE 2018 TAX RETURN


Here are some things that taxpayers with dependent children need to know when planning for and preparing their 2018 federal income tax returns.

* For 2018 your dependent children can make up to $12,000 in “earned income” – W-2 wages and net earnings from self-employment - without having to pay any federal income tax.  This is based on the new Standard Deduction amount for a Single individual.  They will still need to file a federal tax return to get a refund of any federal income tax return or if they had “unearned income” such as interest, dividends and capital gains.

* The “Kiddie Tax” is no longer dependent on the income of the parents.  The taxable income of a child attributable to net unearned income is taxed according to the brackets applicable to trusts and estates.

The 2018 Tax Rate Schedule for Trusts and Estates are -

Taxable Income of:
Tax Due is:
$0 - $2,550
10%
$2,551 - $9,150
$255 plus 24% of amount over $2,550
$9,151 - $12,500
$1,839 plus 35% of amount over $9,150
$12,501 +
$3,011.50 plus 37% of amount over $12,500

The lower tax rates for qualified dividends and capital gains for Trusts and Estates apply as follows:

 0% =  $        0 - $  2,600
15% = $  2,601 - $12,700
20% = $12,701 and higher

Here is a basic example A dependent child has no earned income and $7,000 of interest and short-term capital gains – so none of the income is taxed at the special lower rate.  The Standard Deduction allowed is $1,050, so net taxable income is $5,950.  The amount of income subject to the Kiddie Tax is $4,900 ($7,000 less $2,100 threshold).  $2,550 is taxed at 10% = $255.  $2,350 is taxed at 24% = $564.  The remaining $1,050 is taxed at 10% under the table for a Single taxpayer = $105.  The total tax on $5,950 of net taxable income is $924 – an effective rate of 15.53%.  Under the “old” rules, with the income taxed at the parents’ rate, the Kiddie Tax would probably have been higher. 

* There has been no change to the rules for determining if a person can be claimed as a dependent on your 2018 Form 1040.

* While there no longer exists a Personal Exemption deduction amount, the amount of gross income used in determining if a person can be claimed as a dependent as a “qualifying relative” is what this amount would have been if it still existed – which is $4,150.

* There has also been no change to the rules for the Child and Dependent Care Credit.

Any questions?

TTFN