Archives for May 2018

IRS Form W-4 – How Many Allowances to Claim?

May 30, 2018 by Frank

IRS Form W-4

How Many Allowances to Claim?

2017 Tax Cuts & Jobs Act

Impacts Federal Tax Withholdings

Beginning in 2018, many taxpayers are concerned that they may be having their federal income taxes over-withheld as a result of the 2017 Tax Cuts and Jobs Act (TCJA) which reduced income tax rates and increased the standard deduction.

The trick with estimated taxes is to pay a sufficient amount of estimated tax to avoid a penalty, but not to overpay. That’s because while the IRS will refund the overpayment when you file your return, it won’t pay you interest on it. If you receive a substantial refund from the IRS, that is comparable to giving the IRS an interest-free loan. That obviously is not good financial planning.

Planning Alert:

Due to the significant changes made by the TCJA, the IRS has updated its Tax Withholding Calculator to better enable taxpayers to compute the proper amount of taxes to withhold from their paychecks. If you are a wage earner (W-2 employee), you should consider using the IRS’s Tax Withholding Calculator to determine if your federal income tax withholdings are sufficient to avoid substantially over-withholding your taxes, and also to avoid under withholding issues which may be subject to underpayment penalties.

With respect to under withholding, keep in mind that the IRS wants to collect the taxes due it as early as possible during the year. Taxpayers who underpay income taxes during the tax year and pay the balance due on April 15 (or later) may find themselves subject to a penalty in the form of interest on the amount underpaid.

To avoid underpaying taxes during the year, [Read more…] about IRS Form W-4 – How Many Allowances to Claim?

NEW TWIST TO IRS PHONE SCAM

May 22, 2018 by Frank

NEW TWIST TO IRS PHONE SCAM

SPOOFERS MIMIC IRS PHONE NUMBER

In this scam scenario, the taxpayer receives a phone call from a scammer impersonating the IRS and informs you that a balance is due the IRS and that the caller is prepared to process the payment over the phone. In some instances, the scammer is calling a parent informing him/her that their child owes the IRS. Keep in mind that scammers know much about you due to Facebook and other social media venues.

Assuming you are aware of such scams, you share your reluctance with the caller to provide your banking information. Here is the new twist! The scammer (criminal) uses telephone numbers that mimic IRS Taxpayer Assistance Centers (TACs) to lure victims into paying nonexistent tax bills. The criminals have programmed their computers to display the TAC telephone number and claim to be calling from a local TAC office. To convince taxpayers, scammers would further direct them to a page on IRS.gov to verify the local TAC office telephone number and hang up and then call back a second time, therefore faking the Caller ID to appear to be the IRS office calling. After the taxpayer has “verified” the call number, the fraudsters would resume their demands for money.

The IRS reminds taxpayers [Read more…] about NEW TWIST TO IRS PHONE SCAM

DIVORCED SPOUSE INHERITS WINDFALL OR HOW TO “DISINHERIT” CURRENT SPOUSE AND CHILDREN

May 15, 2018 by Frank

DIVORCED SPOUSE INHERITS WINDFALL

OR HOW TO “DISINHERIT” CURRENT SPOUSE AND CHILDREN

Let’s assume the following facts, which in reality, are not that uncommon. After years of marriage, it is decided that a divorce is the best course of action for both parties. Unfortunately, the split up was very acrimonious.

Let’s assume that the wife gave up her career to care for the children and the husband was the breadwinner. Husband remarries and the second marriage produces another two children. The husband has now fathered four children; two by each marriage.

The divorce decree stated that the husband must pay his ex-wife alimony. Second wife detests seeing that alimony payment being made every month and detests the first wife.

Husband dies [Read more…] about DIVORCED SPOUSE INHERITS WINDFALL OR HOW TO “DISINHERIT” CURRENT SPOUSE AND CHILDREN

IF YOUR BUSINESS CONDUCTS INTERNET OR WEB-BASED SALES

May 8, 2018 by Frank

IF YOUR BUSINESS CONDUCTS INTERNET OR WEB-BASED SALES

Market Place Sales by Sellers Not Maintaining a PA Location

If you are a PA business owner and use an out-of-state vendor for Internet or web-based sales, you may notice that the vendor is charging you a PA use tax due to a recent PA tax law change.

Marketplace Sales: Sellers of products on the internet not maintaining a place of business in the Commonwealth of PA and not collecting PA sales tax on sales to PA businesses, making sales of at least $10,000 into PA in the previous calendar year, were required to file an election by March 1, 2018 opting either to begin to collect sales and use tax by April 1, or commit to sending use tax notices with each sale. Additionally, sellers sending notices must also send an annual summary of purchases both to the customer and to the PA Department of Revenue.

Affected entities are: marketplace facilitators, persons who list or advertise property for sale in any forum and who either directly or indirectly collect the payment from the purchaser and transmit the payment to the person selling the property; remote sellers, persons that do not maintain a place of business in PA and sell at retail into PA; and referrers, persons who provide a forum for interaction between buyers and sellers but do not directly participate in the sale. Marketplace facilitators and referrers are required to file an election on behalf of all the sellers participating in their system. If the election is made to collect sales tax, then the marketplace facilitator or referrer is required to collect and remit sales tax on all of its taxable marketplace sales from sellers that do not maintain a place of business in PA

For those opting to collect sales tax, the new provisions required collection to begin by April 1, 2018 for tangible personal property. The effective date was delayed until April 1, 2019 for digital goods such as electronic copies of books, canned software, music and similar items.

If you would like to discuss your business or personal tax planning, tax preparation and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601 today to make an appointment at our Exton PA CPA office to discuss your situation. You can also schedule a consultation at Click Here.

Copyright © 2018 Keystone Financial Solutions, P.C. All rights reserved. BE SURE TO READ THE DISCLAIMER PAGE: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.

Customer Needs Analysis

May 2, 2018 by Frank

Research, Research & Research – And Adapt

This list of companies is quite impressive: Blockbuster Video, Xerox, Kodak, U.S. Steel, Polaroid, Borders Books, Sears, Pan-Am, Hummer, Blackberry, Abercrombie & Fitch, JC Penny, and many other major brand-name companies. These companies used to be considered some of the brightest and best in their industry. However, their failure to assimilate and adapt led to their ultimate or eventual demise. Tunnel vision is common today. When one has a successful business, the assumption is often made to just keep doing what has always been done and those profits will continue to pour in.

Successful companies (and individuals) need [Read more…] about Customer Needs Analysis