The Internal Revenue Service (IRS) recently announced the annual inflation adjustments for tax rate schedules and other tax provisions for 2019. Due to the Tax Cuts and Jobs Act, there are important changes to review concerning the standard deduction, rate tiers, minimum essential health coverage penalty, and other items. For the detailed announcement, click here.
A California resident pleaded guilty last week to conspiring to submit false claims for income tax refunds and to bank fraud, according to the Department of Justice Tax Division. The woman worked with others to file false returns and allegedly obtain over $9 million in improper tax refunds. Her co-conspirators pleaded guilty earlier this year to related charges.
The California Franchise Tax Board (FTB) recently released an update about the 2018 tax filing season. As of May 31, 2018, the FTB had processed over 17 million personal income tax (PIT) and business entity (BE) returns. Ninety-one percent of personal returns and 85 percent of business returns were e-filed. The FTB issued 10.9 million personal refunds totaling $10 billion and 76,000 business refunds totaling $363 million, averaging $917 and $4,776, respectively. Over 1.3 million California Earned Income Tax Credits were claimed, and $292 million in credits/refunds were allowed.
Virtual currency transactions, such as the purchase or sale of Bitcoin, are reportable transactions on your federal income tax returns, as a recent Internal Revenue Service (IRS) press release states. Failure to report digital currency transactions can lead to audit and possible penalty or interest assessments. The IRS has issued Notice 2014-21 (here) to provide guidance for taxpayers and tax return preparers regarding such transactions. To read the full IRS press release on this topic, click here.
The IRS Large Business and International division (LB&I) is rolling out a series of campaigns focused on specific compliance issues. The division analyzed extensive data as well as suggestions from IRS compliance employees and the tax community to improve large business compliance activities.
The Mobile Workforce State Income Tax Simplification Act of 2017, which aims to make a person's wages and other remuneration subject to income tax only in the employee's state of residence and the state where the employee was physically present and performed employment duties for more than 30 calendar days, was passed by the U.S. House of Representatives on June 20, 2017. Employers will not have state income tax withholding or reporting requirements for employees who do not fit these criteria. Certain classes of workers will not be considered employees for the purposes of this bill, including professional athletes and entertainers; film and video production employees; and prominent public figures providing services on a per-event basis. The U.S. Senate Committee on Finance currently has the proposed bill under review. Click here to track its progress.
California Senate Bill No. 807, introduced February 17, 2017, proposes various tax credits and exemptions aimed at attracting and retaining educators. Legislators hope to offer qualifying taxpayers a credit against their net tax equal to qualified costs paid or incurred in a given year to earn a full teaching credential. Taxpayers who have taught in a classroom for at least five years would be exempt from paying state taxes on that income.
The Internal Revenue Service (IRS) has released the inflation adjustments for specific tax figures for calendar year 2017. Highlights include:
The Treasury Inspector General for Tax Administration (TIGTA) recently issued a report on the IRS' strategy for addressing income produced through virtual currencies, such as bitcoin, litecoin, and dogecoin. Use of virtual currency has grown in recent years, due in part to service benefits such as faster turnaround and lower transaction fees, and in part due to the relative anonymity of the parties involved in such transactions.
The Internal Revenue Service (IRS) made Statistics of Income - 2014 Individual Income Tax Returns Complete Report (Publication 1304) available to the public on August 31, 2016. Highlights include: