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4 posts from January 2018

01/11/2018

2018 Income Tax Withholding Tables Now Confirmed

The IRS has now released the updated 2018 federal income tax withholding tables reflecting the recent tax reform.  This is the first of several updates that will be released in the next few weeks.

The updated withholding information, now posted online (click here to view the new tables), shows the new income tax rates for employers to use when computing employee payroll withholding amounts. Employers are requested to begin using the 2018 withholding tables as soon as possible, but not later than February 15, 2018. They should continue using the 2017 withholding tables until they have fully implemented the new 2018 withholding rules. Calculating pay and taxes

The time needed for employees to enjoy the changes in their paychecks will vary depending on how quickly the new withholding tables are implemented by their employers, and how frequently employees are paid — generally weekly, biweekly or monthly.  Most employees will begin to see increases in their paychecks in February.

The new withholding tables are designed to work with the Forms W-4 that workers should have already filed with their employers to claim withholding allowances.  Employees do not have to do anything at this time.

Acting IRS Commissioner David Kautter says the IRS will be providing more information in the next several weeks to help employers and individual taxpayers understand and review the withholding changes and the other tax reforms affecting payrolls and paychecks.  Kautter explains that the new tax withholding tables are developed to produce the correct amount of tax withholding appropriate for taxpayers with simpler tax situations.  He says the revisions are also intended to avoid tax over- and under-withholding as much as possible.  Soon the IRS will release more updated information for taxpayers with more complicated tax situations.

Meanwhile, the IRS is working on revising its online withholding tax calculator to reflect the new tax law, and expects the calculator will be available by the end of February.  The IRS is also developing a revised Form W-4. Both the Form W-4 and the online calculator will estimate the income tax consequences of law changes affecting itemized deductions, child tax credit increases, the new dependent credit, and the repeal of dependency exemptions. These tools may be used by employees who wish to update their withholding in response to new tax reform laws or changes in their personal circumstances in 2018, and by workers starting a new job.

If you have any questions, please don’t hesitate to contact us at McRuer CPAs online or call us at 816.741.7882.

Premium Tax Credit Forms Deadline Extended for Employers and Insurance Providers

If you're an individual who qualifies for the Premium Tax Credit you are required to file information on your tax return about your coverage in order to claim the credit. The Premium Tax Credit is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace. To get this credit, you must meet certain requirements and file a tax return. Health coverage tax credit

This year, employers and health coverage providers have been given an additional 30 days to send you health coverage information forms.  You do not have to submit these forms with your tax return, but you do need to make certain that the numbers you claim on your return match the numbers submitted by your employer and health coverage provider should your filing be questioned by the IRS.

The IRS has extended the 2018 due date for certain employers and health coverage providers to furnish 2017 health coverage information forms to individuals. The following organizations now have until March 2, 2018, to provide Forms 1095-B or 1095-C to individuals:

  • Insurers
  • Self-insuring employers
  • Other coverage providers
  • Applicable large employers

The March 2nd date is a 30-day extension from the original due date of January 31st. These organizations must furnish statements to employees or covered individuals. The statements have information about the health care coverage offered or provided to the employees or covered individuals. The recipients may use this information to determine if they can claim the Premium Tax Credit on their individual income tax returns.

This 30-day extension is automatic. Employers and providers don’t have to request it. The due dates for filing 2017 information returns with the IRS are not extended. For 2018, the due dates to file information returns with the IRS are:

  • February 28 for paper filers
  • April 2 for electronic filers

Because of these extensions, individuals may not receive their Forms 1095-B or 1095-C by the time they are ready to file their 2017 individual income tax return. To be clear, while information on these forms may assist in preparing a return, taxpayers who wish to claim the Premium Tax Credit are not required to have these forms to file. Taxpayers can prepare and file their returns using other information resources about their health coverage. So, taxpayers do not have to wait for Forms 1095-B or 1095-C to file.

If you have any questions about how the updated deadline may affect you or your business, please don't hesitate to contact one of tax preparation specialists at McRuer CPAs online or by calling 816.741.7882. 

01/05/2018

Tax Filing Season Starts January 29 for 2017 Tax Returns

Tax-DayThe IRS has announced that this year’s filing season will officially begin January 29th.  That is the first date that completed tax returns will be accepted by the IRS, though tax preparation may be completed before then so returns may be ready to submit on the first available day for processing.  The date is a bit later than the launch of the 2016 filing season, which began January 23rd.

The agency has been updating its systems since November to accommodate tax law changes for 2017.  Going forward, it's not yet clear how long it will take the IRS to adjust to the newly passed tax reform law that will implement major changes affecting individual and business income and other taxes in 2018.  Those tax reform changes do not affect your individual 2017 tax return.

The deadline to submit your 2017 individual federal and state income tax returns is April 17th this year.  The date is on the 17th of April because April 15th is a Sunday and April 16th is a holiday in the District of Columbia.

The IRS will not begin accepting federal income tax returns until January 29th.  It also reminds taxpayers that, by law, it cannot issue refunds related to claims for the earned income tax credit or the additional child tax credit until mid-February.

If you have any questions or need help with the preparation of your individual or business income tax returns, please contact us at McRuer CPAs online (click here) or by calling 816.741.7882.

01/03/2018

Withholding Guidance for Small Business Coming Soon

Hand and calculatorThe IRS has released a short update to answer questions from small businesses about how soon they should implement changes from the newly approved tax reform bill.

Currently, the IRS says it plans to "issue the withholding guidance some time in January, and employers and payroll service providers will be encouraged to implement the changes in February."  The updated information is supposed to be designed to work with the existing Forms W-4 that employees have already filed.  This is to make certain no additional action by taxpaying employees will be needed regarding the amount of taxes that should be withheld for each individual.

The 2018 withholding guidelines should enable taxpayers to see changes from the tax reform bill reflected in their paychecks as early as February.  Until the new tables are released, employers and payroll service providers are asked to continue to use the 2017 withholding tables and systems.

If you have any questions, please don't hesitate to contact McRuer CPAs online or call us at 816.741.7882. 

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