2016 Tax Highlights

How the IRS Taxpayer Bill of Rights Works

Taxpayers have fundamental rights under the law. The “Taxpayer Bill of Rights” presents these rights in 10 categories. This helps taxpayers when they interact with the IRS.
Your Rights as a Taxpayer highlights a list of taxpayer rights and the agency’s obligations to protect them. Here is a wrap-up of the Taxpayer Bill of Rights:
 
1. The Right to Be Informed.
Taxpayers have the right to know what is required to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to know about IRS decisions affecting their accounts and clear explanations of the outcomes.

2. The Right to Quality Service.
Taxpayers have the right to receive prompt, courteous and professional assistance in their dealings with the IRS and the freedom to speak to a supervisor about inadequate service. Communications from the IRS should be clear and easy to understand.

3. The Right to Pay No More than the Correct Amount of Tax.
Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties. They should also expect the IRS to apply for all tax payments properly.

4. The Right to Challenge the IRS’s Position and Be Heard.
Taxpayers have the right to object to formal IRS actions or proposed actions and provide justification with additional documentation. They should expect that the IRS will consider their timely objections and documentation promptly and fairly. If the IRS does not agree with their position, they should expect a response.

5. The Right to Appeal an IRS Decision in an Independent Forum.
Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including certain penalties. Taxpayers have the right to receive a written response regarding a decision from the Office of Appeals. Taxpayers generally have the right to take their cases to court.

6. The Right to Finality.
Taxpayers have the right to know the maximum amount of time they have to challenge an IRS position and the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS concludes an audit.

7. The Right to Privacy.
Taxpayers have the right to expect that any IRS inquiry, examination or enforcement action will comply with the law and be no more intrusive than necessary. They should expect such proceedings to respect all due process rights, including search and seizure protections. The IRS will provide, where applicable, a collection due process hearing.

8. The Right to Confidentiality.
Taxpayers have the right to expect that their tax information will remain confidential. The IRS will not disclose information unless authorized by the taxpayer or by law. Taxpayers should expect the IRS to take appropriate action against employees, return preparers and others who wrongfully use or disclose their return information.

9. The Right to Retain Representation.
Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.

10. The Right to a Fair and Just Tax System.
Taxpayers have the right to expect fairness from the tax system. This includes considering all facts and circumstances that might affect their underlying liabilities, ability to pay or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels.
All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity.


Source: Internal Revenue Service

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(858)247-1680

2017 Standard Mileage Rates for Business, Medical and Moving

Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 53.5 cents per mile for business miles driven, down from 54 cents for 2016
• 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
• 14 cents per mile driven in service of charitable organizations

The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged.   The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.




Source: Internal Revenue Service

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(858)247-1680

Many ITINs Expire Jan. 1; Renew Now to Avoid Refund Delays

Time is running out for many ITIN holders who need to file a federal income tax return in 2017 and want to avoid a long wait for a refund, according to the Internal Revenue Service.
An Individual Taxpayer Identification Number (ITIN) is used by anyone who has tax-filing or payment obligations under U.S. law but is not eligible for a Social Security number. Under a recent law change by Congress, any ITIN not used on a tax return at least once in the past three years will expire on Jan. 1, 2017. In addition, any ITIN with middle digits of either 78 or 79 (9NN-78-NNNN or 9NN-79-NNNN) will also expire on that date.
This means that anyone with an expiring ITIN should act now to make sure they have a renewed ITIN in time to file a return during the upcoming tax season. Failure to do so will result in refund delays and possible loss of eligibility for some tax benefits until the ITIN is renewed.
The IRS said that an ITIN renewal application filed now is expected to lengthen to 11 weeks during tax season.


Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680

Try electronic payment options if you owe taxes

If you find that you owe taxes when you’re filing your return, you’ll need to pay what you owe by April 18, 2017, to avoid interest and penalties. For a safe and easy way to pay, use an IRS electronic payment option and pay online, by phone or with your mobile device using the IRS2Go app.

Electronic Funds Withdrawal allows you to e-file and pay when you’re using tax preparation software or a tax professional. With EFW, you can set up a direct debit payment from your bank account for the taxes you owe and up to four estimated payments.

Another option is IRS Direct Pay; it’s free and lets you pay from your checking or savings account. With Direct Pay, you can change or cancel your payment using the Look Up a Payment feature up to two business days before the payment date. To access Direct Pay go to IRS.gov/payments or use the IRS2Go app.

If you prefer to pay by debit or credit card, you can pay online, by phone or with IRS2Go through authorized debit and credit card processors. Though the IRS does not charge a fee for this service, there is a fee from the card processors. Visit IRS.gov/payments for authorized card processors and their phone numbers.

If you need to pay with cash, PayNearMe may be the answer for you. You can make a payment without the need of a bank account or credit card at more than 7,000 7-Eleven stores nationwide. To pay with cash, first visit IRS.gov/paywithcash and follow the instructions.

Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680

The Health Care Law & Your Taxes: Not Too Early to Determine if You Qualify for Exemption

With the 2017 tax filing season approaching, it’s not too early to think about how the health care law affects your taxes. The Affordable Care Act requires you and each member of your family to do at least one of the following:

• Have qualifying health coverage called minimum essential coverage
• Qualify for a health coverage exemption
• Make a shared responsibility payment with your federal income tax return for the months that you did not have coverage or an exemption

If you meet certain criteria for the tax year, you may be exempt from the requirement to have minimum essential coverage. You will not have to make a shared responsibility payment for any month that you are exempt. Instead, you'll file Form 8965, Health Coverage Exemptions, with your federal income tax return. For any month that you do not qualify for a coverage exemption, you will need to have minimum essential coverage or make a shared responsibility payment.   You may be exempt if you meet one of the following:

• The lowest-cost coverage available to you is considered unaffordable
• You have a gap in coverage that is less than 3 consecutive months
• You qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage, or belonging to a group specifically exempt from the coverage requirement

The Federally-facilitated Marketplace is no longer granting exemptions for members of a health care sharing ministry, members of Indian Tribes, and incarceration. Eligible individuals can still claim these exemptions on a tax return. For a full list of exemptions and how to claim them, see our Individual Shared Responsibility Provision – Exemptions: Claiming or Reporting page on IRS.gov/aca.
Federal tax returns that do not reflect at least one of these options – reporting health care coverage, claiming a coverage exemption or reporting a shared responsibility payment -  will be rejected if the return is filed electronically. If filed on paper, tax returns that do not reflect at least one of these options will take longer to process and any refunds will be delayed.

Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680