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 Do you wish you had more time, more money, or perhaps both? This will become reality for millions of workers come December 1, 2016.
The Department of Labor (DOL) sounded off on the final notice about the salary floor increasing from $455/week to $913/week. So, what does this mean for you? If you make less than $913/week and on a salary position with your employer you're now required to receive overtime compensation. All those hours of work you've invested over 40/week are about to become extra income for you. This law was passed in hopes to grow the middle class economically. The new law takes effect December 1, 2016. So, what exactly does this mean for employers? Well, employers will either need to adjust their paying positions (moving salary to hourly), raise your salary, or give you some much needed time off. This will effect approximately 4.2 million workers according to the DOL website. With this new law passed we will see automatic salary updates every 3 years. Does this mean your salary will increase every 3 years? Not exactly, the DOL will base the increases upon wage growth with overtime, and the increasing predictability of hours worked by the average American workforce. For more information about the salary increase and how it may affect you please feel free to call our office today (812)258-4002.  Do you have kids and file your return early? Do you receive the Earned Income Credit (EIC) or the Additional Child Tax Credit (ACTC)? If so, you can expect a delay in receiving your refund in 2017.
A new law, the Protecting Americans from Tax Hikes Act, passed December 18, 2015 states that, "no credit or refund for an over-payment for a taxable year shall be made to a taxpayer before February 15 if the taxpayer claimed the EIC or ACTC on the return." This new law is just one measurement that the IRS has made to protect the identity and ensure taxpayers only receive the refund they are owed. This law will become effective January 1, 2017. So, what does this mean for you? If you have a child under the age of 17 that qualifies you for the ACTC, $1,000.00 credit or if you receive EIC on your tax return you can still file when you have all of your documentation together. However, the IRS will not release your refund, or a partial refund until Feb. 15th. The IRS still stands that they will be honoring the refunds in less than 21 days if you do not have EIC or ACTC on your return. If you have any additional questions or if you think your return will be effected and you wish to speak with an Enrolled Agent about this, you can call our office at (812)258-4002 ext. 1. References: "no credit or refund for an over-payment for a taxable year shall be made to a taxpayer before February 15 if the taxpayer claimed the EIC or ACTC on the return." (2016, August 22) retrieved from https://www.irs.gov/for-tax-pros/new-federal-tax-law-may-affect-some-refunds-filed-in-early-2017 Many people in our local area our receiving phone calls claiming they are from the IRS. Stating they owe money and are being sued by the IRS. It's important to remember unless you have been dealing with a specific agent, the IRS will NEVER call you. The IRS does not e-mail either. The IRS WILL mail you documents, or show up on your door step. The IRS does NOT have the capability of taking payment over the phone. These are scams created to intimidate you into giving money over the phone. These phone calls come from local and long distant area codes. If you receive a phone call that states you are being sued, please pay a set amount of money please hang up immediately. You can report these incidents at phishing@irs.gov. Please provide as much detail information as possible so they IRS can follow up as diligently as they can. If you have experienced monetary losses due to these scams please report this to the Inspector General for Tax Administration at :
https://www.treasury.gov/tigta/contact_report_scam.shtml Many clients have reported that after engaging with these scam artists that they have become very rude, used profanity, and became very belligerent. It's important to record the information they offer directly and hang up. Do NOT give ANY information such as bank account info or social security number over the phone! Many people choose to hire a professional to prepare their tax returns. Even if a professional prepares your return, you are still legally responsible for the accuracy of what is reported. It's very important to choose your tax preparer carefully. Here are some tips that you should look for when making your decision.
Check the preparer's qualifications: Be sure to ask the preparer if they attend continuing education classes, and if they are affiliated with a professional organization. Check on the preparer's history: Check to see if he/she has a questionable history with the Better Business Bureau. Go to the IRS Office of Enrollment and check to see if they have any disciplinary actions and/or licensure status. Service Fees: Be sure to avoid preparers who base their fee on a percentage of your refund, or those who claim they can get you a larger refund than other preparers. Also, be sure that any refund due is sent to you or deposited into an account in your name. Under no circumstances should all or part of your refund be directly deposited into a preparer's bank account. Accessibility: Make sure that you will be able to contact the tax preparer after your return has been filed, even after the April due date. Documentation: Reputable preparers will ask to see your records and receipts and will ask multiple questions to determine accuracy in income and deductions. Do not use a preparer who will is willing to electronically file your return before you receive your W2. The IRS does not allow tax preparation based on your last pay check stub. Blank Returns: NEVER sign a blank return. Review your return, and ask questions as you are legally responsible for what is reported. Copies: Be sure to always receive a copy of the return before it is filed. If you do not receive a copy be sure to request one. Top tips to help you avoid becoming a victim of identity theft:
The IRS will not initiate contact with taxpayers by email, social media channels, text messages or phone calls. If you receive any of these claiming to be from the IRS, forward it to the IRS at phishing@irs.gov. Identity thieves can access your personal information by many means, including stealing your wallet or purse, posing as someone who needs information about you through a phone call or email and accessing information your provide to an unsecured internet site. If your SSN is stolen, someone else can use it to get a job. The employer may report that income earned to the IRS, making it appear that you didn't report all of your income on your tax return. If you receive a letter from the IRS stating that more than one tax return was filed for you, or that you received wages for an employer you don't know, your identity may have been compromised. If this occurs, respond immediately to the phone number on the IRS notice. The alternative minimum tax, also known as the AMT tax, is an extra tax some people have to pay in addition to the regular income tax. The AMT now applies to some people who don't have very high income or who don't claim lots of special tax benefits. This tax provides alternative sets of rules for calculating your income tax. These rules help to determine the minimum amount of tax that you will be required to pay. If your regular tax falls below this minimum rate, you will have to make up the difference by paying alternative minimum tax.
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Photo used under Creative Commons from PhilWolff
