Author Archives: Bruce

About Bruce

Bruce and Eva are long time Franklin residents. Eva Abbott Mullen www.evaabbottmullen.com has been at the same office, ERA Key Realty in Franklin for 35 years. Eva sells residential real estate in the greater Franklin area and is a member of both the (GREB) Greater Boston Real Estate Board and (MLS) the Multiple Listing Service. Our family roots are strong in the Franklin community where our children and grandchildren live, work and go to school. We welcome the opportunity to earn your business and trust. It would be a pleasure to apply my 44 years of experience to your specific tax situation and needs or have Eva find your new home for you.

Here’s how the IRS contacts taxpayers

Everyone should know how the IRS contacts taxpayers. This will help people avoid becoming a victim of scammers who pretend to be from the IRS with a goal of stealing personal information.
Here are some facts about how the IRS communicates with taxpayers:

  • The IRS doesn’t normally initiate contact with taxpayers by email.
  • The agency does not send text messages or contact people through social media.
  • When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service.  Fraudsters will send fake documents through the mail, and in some cases will claim they already notified a taxpayer by U.S. mail.
  • Depending on the situation, IRS employees may first call or visit with a taxpayer. In some instances, the IRS sends a letter or written notice to a taxpayer in advance, but not always.
  • IRS revenue agents or tax compliance officers may call a taxpayer or tax professional after mailing a notice to confirm an appointment or to discuss items for a scheduled audit.
  • Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice.
  • IRS revenue officers and agents routinely make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed, delinquent tax returns or a business falling behind on payroll tax deposits. IRS revenue officers will request payment of taxes owed by the taxpayer. However, taxpayers should remember that payment will never be requested to a source other than the U.S. Treasury.
  • When visited by someone from the IRS, the taxpayers should always ask for credentials. IRS representatives can always provide two forms of official credentials: a pocket commission and a Personal Identity Verification Credential.

More Information:

Taxpayers Can Choose to Itemize or Take Standard Deduction for Tax Year 2017

Most taxpayers claim the standard deduction when they file their federal tax return. However, some filers may be able to lower their tax bill by itemizing when they file their 2017 tax return. Before choosing to take the standard deduction or itemize, it’s a good idea to figure deductions using both methods and choose the method with the most benefit. The IRS offers the following tips to help taxpayers decide:

  • Figure Itemized Deductions. Taxpayers who itemize basically add up the year’s deductible expenses to arrive at their total deduction. Deductions include:   o Home mortgage interest
  • State and local income taxes or sales taxes – but not both
  • Real estate and personal property taxes
  • Gifts to charities
  • Casualty or theft losses
  • Unreimbursed medical and employee business expenses above certain amounts
  • Know the Standard Deduction. For taxpayers who don’t itemize, the standard deduction for 2017 depends on their filing status:   o Single — $6,350
  • Married Filing Jointly — $12,700
  • Head of Household — $9,350
  • Married Filing Separately — $6,350
  • Qualifying Widow(er) — $12,700

If a taxpayer is 65 or older, or blind, the standard deduction is more, but may be limited if another person claims that taxpayer as a dependent.

  • Use IRS Free File. Taxpayers who earned $66,000 or less in 2017 qualify to use free, brand-name software to prepare and file their federal tax returns electronically. IRS Free File software helps taxpayers determine if they should itemize. Taxpayers who can’t use Free File have other e-file options.
  • Check the Exceptions. There are some situations where the law doesn’t allow people to claim the standard deduction. This rule applies to married taxpayers who file separate returns, and either spouse itemizes. In this case, the standard deduction is zero and they should itemize any deductions.
  • Use IRS.gov Tool. Use the Interactive Tax Assistant on IRS.gov. There are several tools that can help people determine whether to itemize or take the standard deduction.
  • File the Right Forms. For taxpayers to itemize their deductions, they must file Form 1040 and Schedule A, Itemized Deductions. Filers can take the standard deduction on Forms 1040, 1040A or 1040EZ.

More Information:

IRS YouTube Videos:
Interactive Tax AssistantEnglish | ASL

Taxpayers Get Answers Faster by Visiting IRS.gov

WASHINGTON – The Internal Revenue Service alerted taxpayers the day after Presidents Day marks the busiest day of the year for calls to the toll-free help line. The IRS reminded taxpayers that most answers to their tax questions can be quickly found on IRS.gov.

Taxpayers who call the IRS the day after Presidents Day can expect longer than usual wait times. Those who need to call can avoid the rush by waiting a day or two or by using online options to get their tax questions answered immediately.

To help taxpayers, the IRS has redesigned its website to make it easier to use, whether with a computer, smart phone or tablet. A good first stop is the IRS Services Guide, which provides an overview of the many IRS.gov tools available to taxpayers and tax professionals. For fast answers to general tax questions, taxpayers can search the Interactive Tax Assistant, Tax Topics, Frequently Asked Questions, Tax Trails and IRS Tax Map.

Those who have already filed can use the “Where’s My Refund?” tool to track their refund. Alternatively, they can call 800-829-1954 for automated refund information.

“Where’s My Refund?” is the best way to check the status of a refund. The application displays progress through three stages: (1) Return Received, (2) Refund Approved, and (3) Refund Sent. Taxpayers get personalized information based on the processing of their tax return. The tool provides an actual refund date after the IRS has approved a refund.

The IRS reminded taxpayers about a common misconception that requesting a tax transcript will help a taxpayer determine the status of their refund. The information included on a transcript does not necessarily reflect the amount or timing of a refund. Transcripts are best used to validate past income and tax filing status for loan applications and to help with tax preparation.

Taxpayers visiting IRS.gov will also find answers to tax questions about filing requirements and credits and deductions that may be available to them and can download forms and instructions. Taxpayers who owe additional tax can learn about payment options or what steps they can take online to create a payment agreement if they can’t pay what they owe all at once.

Employees who did not receive a Form W-2 from their employer should first contact their employer. If they receive no response by the end of February, they can call the IRS and the agency will contact the employer by mail. Taxpayers may have to use Form 4852, Substitute for Form W-2, and estimate wages and withholding by using their pay statements and other records.

Taxpayers must file their 2017 tax returns by April 17, 2018, or request a six-month extension. Extensions can be requested using Free File, by filing Form 4868 or by paying all or part of  the estimated income tax due and indicating that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS) or a credit or debit card. Taxpayers don’t have to file a separate extension form and they receive a confirmation number for their records.

The Right to Quality Service – Taxpayer Bill of Rights #2

All taxpayers have basic rights when filing taxes and dealing with the IRS. This tip is one in a series that outlines the Taxpayer Bill of Rights, which groups the multiple existing rights in the nation’s tax law into 10 categories. This makes it easier for taxpayers to find, understand and take advantage of their rights.

The right to quality service is the second provision highlighted in the Taxpayer Bill of Rights. Taxpayers have the right to:

  • Prompt, courteous and professional assistance when dealing with the IRS.
  • Be spoken to in a way they can easily understand.
  • Receive communications that are clear and easy to understand.
  • Speak to a supervisor about inadequate service.

To make sure taxpayers receive quality service, the IRS:

  • Posts answers to tax questions on IRS.gov, the best place to find answers to questions.
  • Employs representatives who care about the quality of the service they provide and listen objectively to taxpayers, considering all relevant information and answering questions promptly, accurately and thoroughly.
  • Is courteous to taxpayers when collecting taxes, and should:
    • Only contact taxpayers between 8 a.m. and 9 p.m.
    • Not contact taxpayers at their workplace if the IRS has reason to know that the employer doesn’t allow such contacts.
  • Provides information in all notices of deficiency letting taxpayers know how to get assistance from the Taxpayer Advocate Service.
  • May provide information to eligible taxpayers about how they can get legal help from a Low-income taxpayer clinic.

Starting January 2017 NEW MA State Tax deduction

MA State tax deduction or credit for contributions: Effective January 1, 2017 through the 2021 tax year, contributions to Massachusetts 529 plans of up to $1,000 per year by an individual, and up to $2,000 per year by a married couple filing jointly, are deductible in computing Massachusetts taxable income. U.fund College Investing Plan (massachusetts 529 College Savings …www.savingforcollege.com/529_plan_details/?page=plan_details&plan_id=24

 

 

Refund Delays

Refund Delays for tax year 2017 filings in 2018

The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or debit cards starting Feb. 27, 2018, if they chose direct deposit and there are no other issues with the tax return.

Taxpayers can go to Where’s My Refund?  to check on refunds.

Refund Schedule

IRS Refund Accepted IRS Refund Tax Refund Tax Refund NOTES
On or After Accepted Before Direct Deposit Check Mailed 1st day to e-file

Monday 1/23/17 Friday 1/27/17 Friday 2/03/17 Friday 2/03/17
Friday 2/03/17 Friday 2/10/17 Friday 2/17/17 Friday 2/17/17
Friday 2/10/17 Wednesday 2/15/17 Friday 2/24/17 Friday 2/24/17
Wednesday 2/15/17 Friday 2/24/17 Friday 3/03/17 Friday 3/03/17 Est. Payout for EITC & ACTC
Friday 2/24/17 Friday 3/03/17 Friday 3/10/17 Friday 3/10/17
Friday 3/03/17 Friday 3/10/17 Friday 3/17/17 Friday 3/17/17
Friday 3/10/17 Friday 3/17/17 Friday 3/24/17 Friday 3/24/17
Friday 3/17/17 Friday 3/24/17 Friday 3/31/17 Friday 3/31/17
Friday 3/24/17 Friday 3/31/17 Friday 4/07/17 Friday 4/07/17
Friday 3/31/17 Friday 4/07/17 Friday 4/14/17 Friday 4/14/17

Choose your Tax Preparer wisely – IRS Tax Tip 2016-06

Choose Your Tax Preparer Wisely

If someone helps you do your taxes, you’re not alone. The IRS asks you to choose your tax return preparer wisely – for good reason. You are responsible for the information on your income tax return. That’s true no matter who prepares your return. Here are ten tips to keep in mind when choosing a tax preparer:

  1. Check the Preparer’s Qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications on IRS.gov. This tool can help you find a tax return preparer with the qualifications that you prefer. The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:
  • Attorneys.
  • CPAs.
  • Enrolled Agents.
  • Enrolled Retirement Plan Agents.
  • Enrolled Actuaries.
  • Annual Filing Season Program participants.

Attorneys, CPAs and (EA) enrolled agents can represent any client before the IRS in any situation. However, new rules apply to the rights of non-credentialed tax preparers to represent their clients before the IRS. Non-credentialed preparers without an Annual Filing Season Program – Record of Completion – may only prepare tax returns. The new rules do not allow them to represent clients before the IRS on any returns prepared and filed after December 31, 2015. Annual Filing Season Program participants can represent clients in limited situations. For more, visit IRS.gov and see the Understanding Tax Return Preparer Credentials and Qualifications page.

  1. Check the Preparer’s History. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory.
  2. Ask about Service Fees. Avoid preparers who base fees on a percentage of their client’s refund. Also avoid those who boast bigger refunds than their competition. Make sure that your refund goes directly to you – not into your preparer’s bank account.
  3. Ask to E-file Your Return. Make sure your preparer offers IRS e-file. Paid preparers who do taxes for more than 10 clients generally must file electronically. The IRS has safely processed more than 1.5 billion e-filed tax returns.
  4. Make Sure the Preparer is Available. You may want to contact your preparer after this year’s April 18 due date. Avoid fly-by-night preparers.
  5. Provide Records and Receipts. Good preparers will ask to see your records and receipts. They’ll ask questions to figure your total income, tax deductions, credits, etc. Do not use a preparer who will e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
  6. Never Sign a Blank Return. Don’t use a tax preparer that asks you to sign a blank tax form.
  7. Review Your Return Before Signing. Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.
  8. Ensure the Preparer Signs and Includes Their PTIN. All paid tax preparers must have a Preparer Tax Identification Number, or PTIN. By law, paid preparers must sign returns and include their PTIN. Be sure you get a copy of your return.
  9. Report Abusive Tax Preparers to the IRS. Most tax return preparers are honest and provide great service to their clients; however, some preparers are dishonest. Report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms on IRS.gov at any time.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Additional IRS Resources:

Identity theft a major concern on the IRS “Dirty Dozen” list

WASHINGTON — The Internal Revenue Service today issued a filing season alert warning taxpayers to watch out for identity theft at tax time, one of the year’s “Dirty Dozen” tax scams. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number.

“We remain dedicated to stopping tax-related identity theft and protecting taxpayers, and we are making important progress on that front. Taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim,” said IRS Commissioner John Koskinen.

The Dirty Dozen is compiled annually by the IRS and lists a variety of common scams taxpayers may encounter any time during the year. Many of these con games peak during filing season as people prepare their tax returns or hire someone to do so. This year for the first time, the IRS will issue the individual Dirty Dozen scams the next 12 business days to raise consumer awareness.

“Scams can be sophisticated and take many forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues,” Koskinen said. “Keep your personal information safe and secure. Taxpayers should protect their computers and only give out their Social Security numbers when absolutely necessary.”

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. While the IRS has made significant strides over the past several years to address this issue, it remains a top concern for the IRS, which is why identity theft remains on the Dirty Dozen again list this year as the IRS works to protect taxpayers and help victims.

As a result of these aggressive efforts to combat identity theft from 2011 through October 2014, the IRS has stopped 19 million suspicious returns and protected over $63 billion in fraudulent refunds.

For 2015, the IRS will continue to increase both the number and efficiency of the identity theft data models and filters that are used to identify potentially fraudulent returns. These pre-refund filters stop the vast majority of fraudulent returns. Additionally, the IRS continues to expand its partnerships with financial institutions to identity and stop fraudulent refunds.

IRS Criminal Investigation continues its robust efforts, and in Fiscal Year 2014, the IRS initiated 1,063 identity theft-related investigations. Criminal Investigation enforcement efforts resulted in 748 sentencings as compared to 438 in FY 2013, an increase of 75 percent. Our incarceration rate rose to 87.7 percent as compared to 80.6 percent in FY 2013. The courts imposed significant jail time with the average months to serve in FY 2014 at 43 months as compared to 38 months in FY 2013 with the longest sentencing being 27 years.

Fighting identity theft is an ongoing battle as identity thieves continue to create new ways of stealing personal information and using it for their gain. Identity theft cases are among the most complex handled by the IRS. The IRS is continually reviewing processes and policies to minimize the incidence of identity theft and to help those who find themselves victimized. The IRS is working hard to streamline its internal process, but more work remains.

In an effort to help victims, the IRS has issued approximately 1.5 million Identity Protection PINs (IP PINs.) The IP PIN is a unique, six-digit number that is assigned annually to victims of identity theft with resolved cases for use when filing their federal tax return. The IP PIN will allow these individuals to avoid delays in filing returns and receiving refunds.

This year, the IRS will continue its IP PIN pilot program that allows taxpayers who filed tax returns last year from Florida, Georgia or the District of Columbia to opt into the IP PIN program. Additionally, the IRS is offering approximately 1.7 million taxpayers the opportunity to opt in to the IP PIN program in instances where the IRS has identified indications of identity theft on their accounts.

The IRS understands that identity theft is a frustrating, complex process for victims. While identity thieves steal information from sources outside the tax system, the IRS is often the first to inform a victim that identity theft has occurred. The IRS is working hard to resolve identity theft cases as quickly as possible.

The IRS offers the following tips as ways to protect you from becoming a victim of identity theft:

  • Don’t carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
  • Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
  • Protect your financial information.
  • Check your credit report every 12 months.
  • Review your Social Security Administration earnings statement annually.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
  • Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

For more information, see the special identity theft section on IRS.gov, as well as IRS Fact Sheet 2015-1, IRS Combats Identity Theft and Refund Fraud on Many Fronts, and IRS Fact Sheet 2015-2, Identity Theft Information for Taxpayers and Victims.

Top 10 Tax Facts about Exemptions and Dependents

Nearly everyone can claim an exemption on their tax return. It usually lowers your taxable income. In most cases, that reduces the amount of tax you owe for the year. Here are the top 10 tax facts about exemptions to help you file your tax return.

  1. E-file your tax return. Filing electronically is the easiest way to file a complete and accurate tax return. The software that you use to e-file will help you determine the number of exemptions that you can claim. E-file options include free Volunteer Assistance, IRS Free File, commercial software and professional assistance.
  2. Exemptions cut income.  There are two types of exemptions. The first type is a personal exemption. The second type is an exemption for a dependent. You can usually deduct $3,950 for each exemption you claim on your 2014 tax return.
  3. Personal exemptions.  You can usually claim an exemption for yourself. If you’re married and file a joint return, you can claim one for your spouse, too. If you file a separate return, you can claim an exemption for your spouse only if your spouse:
  • had no gross income,
  • is not filing a tax return, and
  • was not the dependent of another taxpayer.
  1. Exemptions for dependents. You can usually claim an exemption for each of your dependents. A dependent is either your child or a relative who meets a set of tests. You can’t claim your spouse as a dependent. You must list the Social Security number of each dependent you claim on your tax return. For more on these rules, see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information. You can get Publication 501 on IRS.gov. Just click on the “Forms & Pubs” tab on the home page.
  2. Report health care coverage. The health care law requires you to report certain health insurance information for you and your family. The individual shared responsibility provision requires you and each member of your family to either:

Visit IRS.gov/ACA for more on these rules.

  1. Some people don’t qualify.  You normally may not claim married persons as dependents if they file a joint return with their spouse. There are some exceptions to this rule.
  2. Dependents may have to file. A person who you can claim as your dependent may have to file their own tax return. This depends on certain factors, like the amount of their income, whether they are married and if they owe certain taxes.
  3. No exemption on dependent’s return. If you can claim a person as a dependent, that person can’t claim a personal exemption on his or her own tax return. This is true even if you don’t actually claim that person on your tax return. This rule applies because you can claim that person is your dependent.
  4. Exemption phase-out.  The $3,950 per exemption is subject to income limits. This rule may reduce or eliminate the amount you can claim based on the amount of your income. See Publication 501 for details.
  5. Try the IRS online tool. Use the Interactive Tax Assistant tool on IRS.gov to see if a person qualifies as your dependent.