Tax

Updated income-tax withholding tables for 2014 have been released by the IRS and supersede withholding tables issued in December 2013. The newly revised version contains percentage method income-tax withholding tables and related information that employers need to implement these changes.

In addition, employers should continue withholding Social Security tax at the rate of 6.2 percent of wages paid. The Social Security wage base limit increases to $117,000. The Medicare tax rate remains at 1.45 percent each for the employee and employer.

The additional Medicare tax of .09 percent for employees (not employers) remains in effect and should be withheld from employee wages that exceed $200,000 in a calendar year, at the beginning in the pay period in which the employee’s wages exceed $200,000.

Employers should start using the revised withholding tables and correct the amount of Social Security tax withheld as soon as possible in 2014, but not later than February 15, 2014. For any Social Security tax under-withheld before that date, employers should make the appropriate adjustment in workers’ pay as soon as possible, but not later than March 31, 2014.

Employers and payroll companies will handle the withholding changes, so workers typically won’t need to take any additional action, such as filling out a new W-4 withholding form. Individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms.

As always, it’s prudent for workers to review their withholding every year and, if necessary, fill out a new W-4 and give it to their employer. For example, individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms.

Give us a call if you have any questions about income tax withholding in 2014. We’re here to help.

• By Leon Clinton
• February 17, 2014

You should receive a Form W-2, Wage and Tax Statement, from each of your employers for use in preparing your federal tax return. Employers must furnish this record of 2013 earnings and withheld taxes no later than January 31, 2014 (if mailed, allow a few days for delivery).

If you do not receive your Form W-2, contact your employer to find out if and when the W-2 was mailed. If it was mailed, it may have been returned to your employer because of an incorrect address. After contacting your employer, allow a reasonable amount of time for your employer to resend or to issue the W-2.

If you still do not receive your W-2 by February 15th, contact the IRS for assistance at 1-800-829-1040. When you call, have the following information handy:

• the employer’s name and complete address, including zip code, and the employer’s telephone number;
• the employer’s identification number (if known);
• your name and address, including zip code, Social Security number, and telephone number; and
• an estimate of the wages you earned, the federal income tax withheld, and the dates you began and ended employment.

If you misplaced your W-2, contact your employer. Your employer can replace the lost form with a “reissued statement.” Be aware that your employer is allowed to charge you a fee for providing you with a new W-2.

You still must file your tax return on time even if you do not receive your Form W-2. If you cannot get a W-2 by the tax filing deadline, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement (available on the IRS website), but it will delay any refund due while the information is verified.

If you receive a corrected W-2 after your return is filed and the information it contains does not match the income or withheld tax that you reported on your return, you must file an amended return on Form 1040X, Amended U.S. Individual Income Tax Return.

If you have questions about your Forms W-2 and 1099 or any other tax-related materials, please call or email our office.

• By Leon Clinton
• February 14, 2014

Refund fraud caused by identity theft is one of the fastest growing crimes nationwide. Learn more about what the IRS is doing to protect your identity.

Stopping refund fraud related to identity theft is a top priority for the IRS. With more than 3,000 employees working on identity theft cases, the IRS is focused on preventing, detecting and resolving identity theft cases as soon as possible and has trained more than 35,000 employees to work with taxpayers to recognize and provide assistance when identity theft occurs.

Taxpayers might encounter identity theft involving their tax returns in several ways. One possible scenario is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen.

Here are some tips to protect you from becoming a victim, and steps to take if you think someone may have filed a tax return using your name:

Tips to protect you from becoming a victim of identity theft

If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 (Monday – Friday, 7 a.m. – 7 p.m. local time; Alaska and Hawaii follow Pacific time).

Be alert to possible identity theft if you receive a notice from the IRS, if you believe you’re a victim of identity theft, or if you learn from your tax professional that:

If you receive a notice from the IRS and suspect your identity has been used fraudulently, respond immediately by calling the number on the notice. Please call us if you’re not sure what to do or would like assistance with this.

If you did not receive an IRS notice but believe you’ve been the victim of identity theft, contact us or contact the IRS Identity Protection Specialized Unit directly at 800-908-4490, extension 245.

Also, you will need to fill out the IRS Identity Theft Affidavit, Form 14039. Please write legibly and follow the directions on the back of the form that relate to your specific circumstances. If you need help filling out this form, don’t hesitate to give us a call.

We also recommend that you take additional steps with agencies outside the IRS such as:

If you have reported an identity theft case to the IRS and are waiting for your federal tax refund, be assured that the IRS is working to speed up and further streamline identity theft case resolution to help innocent taxpayers.

In many instances, these are extremely complex cases to resolve, frequently touching on multiple issues and multiple tax years and cases of resolving identity can be complicated by the thieves themselves contacting the IRS.

Due to the complexity of the situation, this is a time-consuming process. Taxpayers are likely to see their refunds delayed for an extended period of time while we take the necessary actions to resolve the matter. A typical case can take about 180 days to resolve, and the IRS is working to reduce that time period.

Also, please note that even if you have an open identity theft case that is being worked by the IRS, you need to continue to file your tax returns during this period.

For victims of identity theft who have previously been in contact with the IRS and have not achieved a resolution to their case, you may contact the IRS Identity Protection Specialized Unit, toll-free, at 800-908-4490. If you are unable to get your issue resolved and are experiencing financial difficulties, contact the Taxpayer Advocate Service toll-free at 877-777-4778.

Identity theft is an issue that we, as tax professionals, take very seriously. If you have any questions or concerns, please do not think twice about calling us. We are here to help you.

• By Leon Clinton
• February 7, 2014