Jewels Taxes and Bookkeeping

The 2018 tax filing season officially opens Today Monday, Jan. 29, and will close on Tuesday, April 17, when individual tax returns and payments are due to the IRS.

Regardless of your gross income, you are generally required to file an income tax return if any of the following are true:

You had net self-employment income of $400 or more
You had unemployment income
You owe Alternative Minimum Tax
You owe household employment taxes
You owe additional taxes on a retirement plan (an individual retirement arrangement (IRA) or other tax-favored account) or health savings account
You must repay the 2008 Homebuyer Credit (or any other recapture taxes)
You owe Social Security and Medicare taxes on unreported tip income
You earned $108.28 or more from a tax-exempt church or church-controlled organization
You received distributions from an MSA or Health Savings Account
You received an advance payment on the Premium Tax Credit.

Call Us to make your appointment 909-773-1863

Tip of the Week

• Who is Required to File. In most cases, income, filing status and age determine if a taxpayer must file a tax return. Other rules may apply if the taxpayer is self-employed or if they are a dependent of another person. For example, if a taxpayer is single and younger than age 65, they must file if their income was at least $10,400. There are other instances when a taxpayer must file

• Filing to get a refund. Even if a taxpayer doesn’t have to file, they should file a tax return if they can get money back. If your employer withhold federal income tax from your pay you may be due a refund.

Call today to make an appointment (909) 773-1863

Call us today to make an appointment (909) 773-1863

Tax Tip of the Week

Why you should change your withholding or make estimated tax payments
If you want to avoid a large tax bill, you may need to change your withholding. Changes in your life, such as marriage, divorce, working a second job, running a side business or receiving any other income without withholding can affect the amount of tax you owe. And if you work as an employee, you don’t have to make estimated tax payments if you have more tax withheld from your paycheck. This may be a convenient option if you also have a side job or a part-time business.

Some income is not subject to withholding. This includes some income from self-employment, the sharing economy or some rental activities. Be sure to make estimated tax payments on those sources of income throughout the year. You may also make estimated tax payments if the withholding from your salary, pension or other income doesn’t cover your income tax for the year.
You make your estimated payments based on the income you expect to earn and any credits you expect to receive in the year. You can use your prior year tax return as a guide and Form 1040-ES, Estimated Tax for Individuals has a worksheet to help you figure your estimated payments.
You can use estimated tax payments to pay both income tax and self-employment tax (Social Security and Medicare).
When to and how to change your withholding or pay estimated taxes
Check your withholding often and adjust it when your situation changes. To do this fill out a new Form W-4 and give it to your employer. The Withholding Calculator is a helpful tool.

Estimated tax payments are due as follows:
January 1 to March 31 – April 15
April 1 to May 31 – June 15
June 1 to August 31 - September 15
September 1 to December 31 – January 15 of the following year
Note: If these due dates fall on a Saturday, Sunday or legal holiday, the payments are due the next business day.

Tip of the Week

It’s important to gather documents

The IRS urges all taxpayers to file a complete and accurate tax return by making sure they have all the needed documents before they file. This includes:

Forms W-2 from all employers.
Forms 1099 from banks and other payers.
Forms 1095-A from the Marketplace for those claiming the Premium Tax Credit.
Forms 1098-T from Schools. (This form typically will be on the students school website.)

Typically, these forms start arriving by mail in January. Taxpayers should check them over carefully, and if any of the information shown is wrong, contact the payer right away for a correction.

Tip of the week!

What You Need to Know
Expecting a refund? Some refunds cannot be issued before mid-February.
By law, the IRS cannot issue refunds before mid-February for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit.

This applies to the entire refund, even the portion not associated with these credits.

While the IRS will process your return when it is received, it cannot issue related refunds before mid-February.

Tip of the week

Tax payers have Rights!!

The Right to Be Informed. Taxpayers have the right to know how to comply with tax laws. They are entitled to clear explanations of the laws and IRS procedures. Taxpayers have the right to know about IRS decisions affecting their accounts with clear explanations of the outcomes.

The Right to Quality Service. Taxpayers have the right to receive prompt, courteous and professional assistance when dealing with the IRS. They also have the right to speak with a supervisor about inadequate service. Communications from the IRS should be clear and easy to understand.

The Right to Pay No More Than the Correct Amount of Tax. Taxpayers must pay only the amount of tax legally due. This includes interest and penalties. The IRS must apply all tax payments properly.

The Right to Challenge the IRS’s Position and Be Heard. Taxpayers have the right to object to formal IRS actions or proposed actions. They can also provide justification with additional documentation. Taxpayers can expect the IRS to consider timely objections and documentation promptly and fairly. Taxpayers can expect a response when the IRS disagrees with the taxpayer’s position.

The Right to Appeal an IRS Decision in an Independent Forum. Taxpayers are entitled to a fair and impartial appeal of most IRS decisions. This includes appealing certain penalties. Taxpayers have the right to receive a written response regarding a decision from the IRS. Taxpayers generally have the right to take their case to court.

Tax tip of the week

Self-Employment Tax

Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Your payments of SE tax contribute to your coverage under the social security system. Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits.
Generally, you must pay SE tax and file Schedule SE (Form 1040) if either of the following applies.
1. If your net earnings from self-employment were $400 or more.
2. If you work for a church or a qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from social security and Medicare taxes, you are subject to SE tax if you receive $108.28 or more in wages from the church or organization.
Note: There are special rules and exceptions for aliens, fishing crew members, notary public, state or local government employees, foreign government or international organization employees, etc.

Tax Tip of the week

Individual Taxpayers: Seven Things to Do When an IRS Letter Arrives
The IRS mails millions of letters to taxpayers every year for many reasons. Here are seven simple suggestions on how individuals can handle a letter or notice from the IRS:
1. Don’t panic. Simply responding will take care of most IRS letters and notices.

2. Read the entire letter carefully. Most letters deal with a specific issue and provide specific instructions on what to do.
3. Compare it with the tax return. If a letter indicates a changed or corrected tax return, the taxpayer should review the information and compare it with their original return.
4. Only reply if necessary. There is usually no need to reply to a letter unless specifically instructed to do so, or to make a payment.
5. Respond timely. Taxpayers should respond to a letter with which they do not agree. They should mail a letter explaining why they disagree. They should mail their response to the address listed at the bottom of the letter. The taxpayer should include information and documents for the IRS to consider. The taxpayer should allow at least 30 days for a response.
When a specific date is listed in the letter, there are two main reasons taxpayers should respond by that date:
 To minimize additional interest and penalty charges.
 To preserve appeal rights if the taxpayers doesn’t agree.
6. Don’t call. For most letters, there is no need to call the IRS or make an appointment at a taxpayer assistance center. If a call seems necessary, the taxpayer can use the phone number in the upper right-hand corner of the letter. They should have a copy of the tax return and letter on hand when calling.
7. Keep the letter. A taxpayer should keep copies of any IRS letters or notices received with their tax records.

Happy Tuesday!! Tax tip of the week for those who have ITIN's

Taxpayers who use an Individual Taxpayer Identification Number should check to see if their number expires this year. If it does, and they need to file a return in 2018, they should submit an application now to renew their ITIN. Doing this helps avoid tax refund and processing delays next year. The IRS issues ITINs to people who are not eligible for a Social Security number, but who need to file a tax return.
Taxpayers who have not used their ITIN to file a federal return at least once in the last three years will see their number expire Dec. 31, 2017. ITINs with middle digits 70, 71, 72 or 80 will also expire at the end of the year. These taxpayers should renew their ITIN if they will have a filing requirement in 2018. Additionally, taxpayers whose ITINs have middle digits 78 or 79 that have expired should renew their ITIN if they will have a filing requirement. Other taxpayers with ITINs do not need to take any action.