Categories for Tax News

Divorce or separation may have an effect on taxes | Internal Revenue Service http://bit.ly/2l4H9In 

If your kids are off to day camp, you may be eligible for a tax break

Now that most schools are out for the summer, you might be sending your children to day camp. The good news: You might be eligible for a tax break for the cost. Day camp is a qualified expense under the child and dependent care credit, which is worth 20% to 35% of qualifying expenses, up to a maximum of $3,000 for one qualifying child and $6,000 for two or more. Note: Sleep-away camp doesn’t qualify.

Is an HSA right for you?

A Health Savings Account (HSA) offers tax-advantaged funding of health care costs. If you have a qualified high-deductible health plan, you can contribute to an HSA sponsored by your employer or set up by you. You own the account, which can bear interest or be invested. It can grow tax-deferred, similar to an IRA. Withdrawals for qualified medical expenses are tax-free, and you can carry over a balance from year to year.

New W-4 for 2020

IRS, Treasury unveil proposed W-4 design for 2020 | Internal Revenue Service http://bit.ly/2Z67TXs 

Tax Transcript Tips

Tax transcript tips for those filing a FAFSA for the 2019-2020 college semesters | Internal Revenue Service http://bit.ly/2X6ZK40

Employers: Be aware (or beware) of a harsh payroll tax penalty

If payroll taxes withheld from employees’ paychecks aren’t remitted to the IRS, a severe tax penalty can be personally imposed on “responsible” individuals. The IRS can assess a penalty of 100% of the unpaid tax amount on shareholders, owners, directors, officers, employees and others. The Trust Fund Recovery Penalty (or “100% Penalty”) is assessed when there’s a willful failure to collect and pay over to the IRS taxes that are withheld from employees.

Paycheck Checkup

IRS continues campaign to encourage taxpayers to do a Paycheck Checkup; use Withholding Calculator to help get right amount for 2019 | Internal Revenue Service http://bit.ly/2X91o90

The chances of IRS audit are down but you should still be prepared

The IRS just released its audit statistics for the 2018 fiscal year, and fewer taxpayers had their returns examined compared with prior years. Overall, just 0.59% of individual tax returns were audited (down from 0.62% in 2017). This was the smallest number of audits conducted since 2002. However, even though a small percentage of returns are being chosen for audit these days, that will be little consolation if yours is one of them. The easiest way to survive an IRS audit is to prepare.

IRS reminder: Tax scams continue year-round

IRS reminder: Tax scams continue year-round | Internal Revenue Service http://bit.ly/2Z6qyCE

Thinking about moving to another state in retirement? Don’t forget about taxes

If you’re thinking about relocating to another state in retirement, consider the impact of state and local taxes. It may seem like a state with no income tax is a smart choice, but you also have to factor in property and sales taxes, as well as any state estate tax. If you make a move to a new state and want to escape taxes in the state you came from, it’s important to establish legal domicile in the new location.