Tax

Tax

There’s Still Time to Make a 2017 IRA Contribution

If you haven’t contributed funds to an Individual Retirement Arrangement (IRA) for tax year 2017, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 17 due date, not including extensions.

Be sure to tell the IRA trustee that the contribution is for 2017. Otherwise, the trustee may report the contribution as being for 2018 when they get your funds.

Generally, you can contribute up to $5,500 of your earnings for tax year 2017 (up to $6,500 if you are age 50 or older in 2017). You can fund a traditional IRA, a Roth IRA (if you qualify), or both, but your total contributions cannot be more than these amounts.

Traditional IRA: You may be able to take a tax deduction for the contributions to a traditional IRA, depending on your income and whether you or your spouse, if filing jointly, are covered by an employer’s pension plan.

Roth IRA: You cannot deduct Roth IRA contributions, but the earnings on a Roth IRA may be tax-free if you meet the conditions for a qualified distribution.

Saving for retirement should be part of everyone’s financial plan and it’s important to review your retirement goals every year in order to maximize savings. If you need help figuring out which retirement strategies are best for your situation, give the office a call.

Tax

IRS Phone Scam Intensifies During Filing Season

IRS Phone Scam Intensifies During Filing Season

As taxpayers are working to file their taxes, criminals are also hard at work — attempting to steal their money. While there are several versions of tax scams, the classic telephone con continues to thrive, especially during filing season. As a reminder, here’s how the scam works:

  • Scammers call taxpayers telling them they owe taxes and face arrest if they don’t pay. Sometimes, the first call is a recording, asking taxpayers to call back to clear up a tax matter or face arrest.
  • When taxpayers call back, the scammers often use threatening and hostile language. The thief claims the taxpayers may pay their debts using a gift card, other pre-paid cards or wire transfers.
  • Taxpayers who comply lose their money to the scammers.

Taxpayers should remember that the IRS does not:

  • Call taxpayers demanding immediate payment using a specific payment method, but will first mail a bill.
  • Threaten to have taxpayers arrested for not paying taxes.
  • Demand payment without giving taxpayers an opportunity to question or appeal the amount the IRS believes they owe.
  • Ask for credit or debit card numbers over the phone.

Taxpayers who receive these phone calls should:

More Information:
How to know it’s really the IRS calling or knocking on your door

Tax

Revised Form W-4: Check your Withholding

The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets. As such, a new version of Form W-4, Employee’s Withholding Allowance Certificate, was released on February 28.

Taxpayers with less complex tax situations–single, married couples with only one job, or those who have no dependents, and who have not claimed itemized deductions, adjustments to income or tax credits–might not need to make any changes to their withholding or revise their Forms W-4.

Taxpayers with more complicated financial situations, however, might need to revise their W-4. Among the groups who should check their withholding are:

  • Two-income families.
  • People with two or more jobs at the same time or who only work for part of the year.
  • People with children who claim credits such as the Child Tax Credit.
  • People who itemized deductions in 2017.
  • People with high incomes and more complex tax returns.

To determine whether changes to withholding should be made for 2018, taxpayers should first check the updated IRS Withholding Calculator to make sure they have the right amount of tax taken out of their paychecks. If a taxpayer needs to fill out a new Form W-4, they should do so and then submit the new Form W-4 to their employer.

The withholding changes do not affect 2017 tax returns due this April. However, having a completed 2017 tax return can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year.

If you have any questions about the amount you should be withholding on Form W-4, please call.