Tis the "season" when businesses get "warnings" about the federal and state labor law poster requirements.  Frequently we have clients who pay hundreds of dollars for these things.  You can download the posters you need for free; don't be scammed by these mailings.  https://labor.wv.gov/Pages/Required-Posters.aspx   https://www.dol.gov/general/topics/posters  http://workforcewv.org/workplace-posters.html.  Yes you do have to poster labor laws;  no you don't have to pay for them


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Recent changes to federal tax law allow funds to be used to pay tuition and expenses for children enrolled in K-12 private and religious schools. There are different options for West Virginia residents and Maryland:


Families with children enrolled in grades K – 12 at private and religious schools are eligible.


Parents/grandparents etc can pay for up to $10,000 annually of private and religious school expenses.
Qualified K – 12 distributions are tax exempt at the federal level.
Contributions to an account provide state tax advantages.

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It's never ending; and always evolving; TAX LAWS! ...... the IRS clarifies that despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labelled. The Tax Cuts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan.


Under the new law, for example, interest on a home equity loan used to build an addition to an existing home is typically deductible, while interest on the same loan used to pay personal living expenses, such as credit card debts, is not. As under prior law, the loan must be secured by the taxpayer’s main home or second home (known as a qualified residence), not exceed the cost of the home and meet other requirements.

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So here we go again. As a part of the Feb 9 budget; there are tax rules that have been RETROACTIVELY changed. (I don't do this; congress does!) Here is a major one that could affect any tax return already filed (or may force delay filing one immediately) that claimed or will claim education expenses. The provision extends through 2017 the above-the-line deduction for qualified tuition and related expenses for higher education. The deduction is capped at $4,000 for an individual whose adjusted gross income (AGI) does not exceed $65,000 ($130,000 for joint filers) or $2,000 for an individual whose AGI does not exceed $80,000 ($160,000 for joint filers).

Another retroactive change made Feb 9 in the budget is a 2017 credit for purchases of nonbusiness energy property. The provision allows a credit of 10 percent of the amount paid or incurred by the taxpayer for qualified energy improvements, up to $500. 


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This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. See Notice 2018-1. The FAST Act also requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may revoke their passport.


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Least you are confused on filing 1099's and the due dates; it is confusing. (if you are a do-it-yourself 1099 filer)
For tax year 2017, the IRS recommends the following: If any of your Forms 1099-MISC reporting NEC (Non Employee Compensation) will be filed after the January 31, 2018 due date, separate the submission of those Forms 1099-MISC from the submission of any Forms 1099-MISC that do not report NEC.
Filing on paper: separate submissions, each with its own Form 1096
Filing electronically: separate transmissions, each with its own Payer “A” Record


PLEASE NOTE: IF YOU FILE AFTER JAN 31 this year; that is the "recommended" procedure (i.e. if you don't you will probably get an IRS notice of late filing and have to "fight" with them why they are wrong. So, we recommend you file them all by 01/31/18.


Having said that for 2018's 1099's that will be the RULE and you won't be able to appeal to get out of the penalty.


FILE those 1099's by 01/31 and you won't have to worry about this.


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Tax Reform; A LOT has changed. Note some of these highlights!


Corporate rates change under the "reform." Lots of debate in the media about corporate tax rate cuts. However, let's set aside political views and stick with the FACTS. Did you know the US has the HIGHEST corporate income tax rates among (OEDC) the Organization of Economically Developed Countries? Why does this matter? A short lesson in US global income taxes; for the most part, corporations are taxed on worldwide income. The best way to avoid the high US rates is to source your income outside of the US. So, if a CPA is helping manage and minimize income taxes; the planning must focus on moving overseas to reduce the tax paid here in the US. Thus; your jobs go overseas with the headquarters and sourcing. With the new reform; corporations will be able to repatriate global income back into the US without being taxed (also lose a foreign tax credit that is currently allowed) but the hope is those corporations will bring money home. To incentive that process; corporations with a threshold of ownership overseas will have to pay a tax for untaxed earnings overseas. Thus the reason to move overseas will be minimized and hopefully eliminated. Most of the media doesn't understand this "cause and effect."


Tax Cuts and Jobs Act amends I.R.C. § 170(l) to provide that, starting in 2018, contributions to a college or university that entitle the donor to purchase tickets or seating at an athletic event are not deductible. Under current law, 80% of such donations are deductible


Denial of deduction for settlements subject to nondisclosure agreements paid in connection with sexual harassment or sexual abuse: Under current law (Internal Revenue Code (“Code”) Section 162(a)), a taxpayer is generally allowed a deduction for ordinary and necessary expenses paid or incurred in carrying on any trade or business. Under the Tax Bill, no deduction is allowed for any settlement, payout, or attorney fees related to sexual harassment or sexual abuse if such payments are subject to a nondisclosure agreement.


1. Exemptions (for yourself/spouse and dependents) will be eliminated after the 2017 income tax return.
2. Standard deduction, however, will almost DOUBLE after 2017; will make itemizing more of a challenge especially with the cap on state taxes
3. Child Credit doubles from $1,000 to $2,000 in 2018
4. Added a credit for other non-child family members for 2018 $500
5. Remaining as an S –Corp may be more appealing than the media is portraying. However, it is a very complicated, challenging decision and the risk of C Corp rates raising back to higher levels has to be seriously considered. (when the parties in power change; anything can change)
6. Student loan forgiveness due to death or disability will not be taxable income
7. Charitable donations previously limited to 50% increases to 60%
8. Extended the 7.5% of AGI medical expenses for another 2 years; then goes to 10%
9. Alimony deduction (and taxability) will be repealed for any agreement entered into after 12/31/18
10. For tax years 2018-2025, the deduction for moving expenses and the income exclusion for qualified moving expense reimbursements is eliminated, except for members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station.
11. Casualty losses repealed in 2018 (personal)
12. State and local tax deductions limited to $10,000 annually in 2018 and thereafter
13. 100% bonus depreciation is back effective 09/27/17 until 2022 and includes USED property; (used was not previously allowed for bonus depreciation.)
14. Section 179 property doubles from $500,000 annually to $1,000,0000
15. Expanded 179 property to include: roofs, heating and AC, alarm systems and security
16. Like kind exchanges now limited to real property; not personal property as previously allowed
17. The rumor about business interest deduction limit does NOT affect businesses that do NOT exceed $25 MILLION in gross receipts
18. NOL’s will not be carried back, but can be carried forward indefinitely (previously limited to 20 years)
19. Active business losses will be limited to $500K
20. Previously partnerships were technically terminated when 50% or more of the partnership ownership changed within 12 months; this has been repealed
21. Home equity interest is gone and home mortgage is limited to $750,000 of debt
22. Estates now have options on selecting year end dates
23. Charitable Contribution Deduction for College Athletic Seating Rights Eliminated. For tax years after 2017, no charitable deduction will be allowed for any payment to an institution of higher education in exchange for the right to purchase tickets or seating at an athletic event.
24. For tax years 2018-2025, the limitation on wagering) is modified to provide that all deductions for expenses incurred in carrying out wagering transactions, and not just gambling losses, are limited to the extent of gambling winnings
25. Affordable Care Act Individual Mandate Repealed. 
26. Shortened Recovery Period for New Farming Equipment. The recovery period of new machinery or equipment placed in service after 12/31/17 and used in a farming business from seven to five years. In addition, use of the 150% declining balance depreciation method for these assets will no longer be required.
27. Domestic Production deduction is eliminated in 2018
28. Disallows deductions for entertainment expenses after 2017


The Tax Bill suspends all miscellaneous itemized deductions that are subject to the 2% floor under present law. This includes the following deductions that an employee had been permitted to deduct under current law: DON"T be confused; these relate to non reimbursed employee expenses NOT to business deductions!

Casualty and theft losses from property used in performing services as an employee;
Business bad debt of an employee;
Business liability insurance premiums;
Damages paid to a former employer for breach of an employment contract;
Depreciation on a computer a employee’s employer requires him or her to use in his or her work;
Dues to a chamber of commerce if membership helps the employee perform his or her job;
Dues to professional societies;
Educator expenses;
Home office or part of a employee’s home used regularly and exclusively in his or her work;
Job search expenses in the employee’s present occupation;
Legal fees related to the employee’s job;
Licenses and regulatory fees;
Malpractice insurance premiums;
Medical examinations required by an employer;
Occupational taxes;
Passport fees for a business trip;
Research expenses of a college professor;
Subscriptions to professional journals and trade magazines related to the employee’s work;
Tools and supplies used in the employee’s work;
Costs for travel, transportation, meals, entertainment, gifts, and local lodging related to the employee’s work;
Union dues and expenses;
Work clothes and uniforms if required and not suitable for everyday use; and
Work-related education.
Thus, under the provision, employees may not claim the above-listed items as itemized deductions for taxable years 2018 through 2025.


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If you make estimated payments at the state level for your personal income taxes you should make your 4th Qtr payment in Dec of 2017 to get the best tax effect after the new tax bill has passed.  Also if you have unpaid property taxes please make sure to pay those in 2017 if possible.

For further information on what is known regarding the tax bill see:

https://www.journalofaccountancy.com/news/2017/dec/tax-reform-bill-changes-for-individuals-201718070.html


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IRS now requires we obtain your Drivers License and your spouse to e-file your tax returns.  Please bring in when you come or send us a copy if you mail or email your return to us.  


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West Virginia employers will be required to pay wages earned to a resigning or terminated employee on or before the next regular payday in the cycle. Previously, different time limits for final pay applied where an employee was terminated or resigned with no notice, and where an employee resigned with adequate notice.


An employee who gave notice equal to the length of at least one pay period would have been entitled to receive a paycheck on their last day of work. An employee who resigned without notice or was terminated would have been entitled to payment either by the next pay date or within four business days, whichever came first.


Employers are now required to pay employees at least twice a month, with no more than 19 days between payments. The law previously required payment every two weeks.​

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Every Halloween, children knock on doors pretending they are everything from superheroes to movie stars. Scammers, on the other hand, don’t leave their impersonations to one day. They can happen any time of the year.

People can avoid taking the bait and falling victim to a scam by knowing how and when the IRS does contact a taxpayer in person. This can help someone determine whether an individual is truly an IRS employee.

Here are eight things to know about in-person contacts from the IRS.

The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

There are special circumstances when the IRS will come to a home or business. This includes:

When a taxpayer has an overdue tax bill
When the IRS needs to secure a delinquent tax return or a delinquent employment tax payment
To tour a business as part of an audit
As part of a criminal investigation

Revenue officers are IRS employees who work cases that involve an amount owed by a taxpayer or a delinquent tax return. Generally, home or business visits are unannounced.

IRS revenue officers carry two forms of official identification.  Both forms of ID have serial numbers. Taxpayers can ask to see both IDs.

The IRS can assign certain cases to private debt collectors. The IRS does this only after giving written notice to the taxpayer and any appointed representative. Private collection agencies will never visit a taxpayer at their home or business.

The IRS will not ask that a taxpayer makes a payment to anyone other than the U.S. Department of the Treasury.

IRS employees conducting audits may call taxpayers to set up appointments, but not without having first notified them by mail. Therefore, by the time the IRS visits a taxpayer at home, the taxpayer would be well aware of the audit.   

IRS criminal investigators may visit a taxpayer’s home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment.

Taxpayers who believe they were visited by someone impersonating the IRS can visit IRS.gov for information about how to report it.


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If you receive an unexpected call from someone claiming to be from the IRS, here are some of the telltale signs to help protect yourself.

The IRS Will Never:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
Ask for credit or debit card numbers over the phone.

If you get a suspicious phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

Do not give out any information. Hang up immediately.
Search the web for telephone numbers scammers leave in your voicemail asking you to call back. Some of the phone numbers may be published online and linked to criminal activity.
Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page or call 800-366-4484.
Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
If you think you might owe taxes, call the IRS directly at 800-829-1040.


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Keep up with the latest changes that may affect your business!

How to make your grandchildren's crafts tax deductible by DK CPA:


All Matters of Accounting and Taxation

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