Diamante Tax Tips

These ITINs expire on Dec/31/2019

Taxpayers with expiring individual taxpayer identification numbers should renew their number ASAP. There are nearly 2 million ITINs set to expire at the end of 2019. Taxpayers with an expiring number should renew before the end of this year. This will help avoid unnecessary delays related to their tax refunds next year.

ITINs are used by taxpayers required to file or pay taxes, but who aren’t eligible for a Social Security number.

Here’s info about which ITINs will expire and how taxpayers renew them.

• These ITINs expire on December 31, 2019:
  • Those not used on a federal tax return at least once in the last three consecutive years.
  • Numbers with middle digits 83, 84, 85, 86 or 87 not already renewed.
• ITINs with the middle digits 83, 84, 85 or 86, 87 need to be renewed, even if it was used it in the last three years..
• Taxpayers whose ITIN is expiring and who expect to have a filing requirement in 2020 must renew their number. Others don’t need to take any action.
• The IRS is sending notices to affected taxpayers. This is a CP48 Notice. It explains the steps to renew the ITIN.
• Taxpayers who receive the notice after renewing their ITIN don’t need to take further action unless another family member is affected.
• ITINs with middle digits of 70 through 82 have previously expired. Taxpayers with these ITINs can still renew at any time, if they haven’t already.
• Those who receive a renewal letter from the IRS can renew the family’s ITINs together. They can do so even if family members have an ITIN with middle digits that aren’t expiring. Family members include the tax filer, spouse and any dependents.
• To renew an ITIN (PDF), a taxpayer must complete a Form W-7 and submit all required documentation. They don’t need to attach a tax return. However, taxpayers must note why they need an ITIN on the W-7.
• There are three ways taxpayers submit the renewal application:
  • Mail the form to the IRS address listed on the Form W-7 instructions.
  • Work with a Certified Acceptance Agent authorized by the IRS to help taxpayers.
  • Make an appointment at an IRS Taxpayer Assistance Center to have each applicant’s identity authenticated in person.

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Small business owners or self-employed people

Here’s some information about estimated tax payments:

• Taxpayers generally must make estimated tax payments if they expect to owe $1,000 or more when they file their 2019 tax return.
• Whether or not they expect to owe next year, taxpayers may have to pay estimated tax for 2019 if their tax was more than zero in 2018.
• Wage earners who also have business income can often avoid having to pay estimated tax. They can do so by asking their employer to withhold more tax from their paychecks. The IRS urges anyone in this situation to do a Paycheck Checkup using the Tax Withholding Estimator on IRS.gov. If the estimator suggests a change, the taxpayer can submit a new Form W-4 (PDF) to their employer.
• Aside from business owners and self-employed individuals, people who need to make estimated payments also includes sole proprietors, partners and S corporation shareholders. It also often includes people involved in the sharing economy.
• Estimated tax requirements are different for farmers and fishermen. Corporations generally must make these payments if they expect to owe $500 or more on their 2019 tax return.
• Aside from income tax, taxpayers can pay other taxes through estimated tax payments. This includes self-employment tax and the alternative minimum tax.
• The final two deadlines for paying 2019 estimated payments are September 16, 2019 and January 15, 2020.
• Taxpayers can check out these forms for details on how to figure their payments: Form 1040-ES, Estimated Tax for Individuals , Form 1120-W, Estimated Tax for Corporations.
• Taxpayers can visit IRS.gov to find options for paying estimated taxes. These include:
  • Direct Pay from a bank account.
  • Paying by credit or debit card or the Electronic Federal Tax Payment System
  • Mailing a check or money order to the IRS.
  • Paying cash at a retail partner.
• Anyone who pays too little tax (PDF) through withholding, estimated tax payments, or a combination of the two may owe a penalty. In some cases, the penalty may apply if their estimated tax payments are late. The penalty may apply even if the taxpayer is due a refund.
• For tax year 2019, the penalty generally applies to anyone who pays less than 90 percent of the tax reported on their 2019 tax return.

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Is it Really the IRS Calling?

How the IRS initiates contact

The IRS initiates most contacts with taxpayers through regular mail delivered by the U.S. Postal Service. However, there are special circumstances in which the IRS will call or come to a home or business, such as:

• When a taxpayer has an overdue tax bill,
• To secure a delinquent tax return or a delinquent employment tax payment, or
• To tour a business, for example, as part of an audit or during criminal investigations.

To tour a business, for example, as part of an audit or during criminal investigations.Even then, taxpayers will generally first receive a letter or sometimes more than one letter, often called notices, from the IRS in the mail.

Avoid telephone scams

Criminals impersonate IRS employees and call taxpayers in aggressive and sophisticated ways. Imposters claim to be IRS employees and sound very convincing. They use fake names and phony IRS identification badge numbers. They’re demanding and threatening – and do not reflect how the IRS handles enforcement matters

.

Note that the IRS does not:

• Demand that people use a specific payment method, such as a prepaid debit card, gift card or wire transfer. The IRS will not ask for debit or credit card numbers over the phone. For people who owe taxes, make payments to the U.S. Treasury or review IRS.gov/payments for IRS online options.
• Demand immediate tax payment. Normal correspondence begins with a letter in the mail and taxpayers can appeal or question what they owe. All taxpayers are advised to know their rights as a taxpayer.
• Threaten to bring in local police, immigration officers or other law enforcement agencies to arrest people for not paying. The IRS also cannot revoke a license or immigration status. Threats like these are common tactics scam artists use to trick victims into believing their schemes.

IRS employees may make official, unannounced visits

IRS employees may make official and sometimes unannounced visits to discuss taxes owed or returns due as a part of an audit or investigation. Taxpayers generally will first receive a letter or notice from the IRS in the mail. If a taxpayer has an outstanding federal tax debt, IRS will request full payment but will provide a range of payment options.

Here are the facts:

• All IRS representatives will always provide their official credentials, called a pocket commission and a HSPD-12 card. The HSPD-12 card is a government-wide standard form of reliable identification for federal employees and contractors. Taxpayers have the right to see these credentials. IRS employees can provide an additional method to verify their identification. Upon request, they’re able to provide a toll-free employee verification telephone number.
• Collection employees won’t demand immediate payment to a source other than “U.S. Treasury.”
• IRS employees may call taxpayers to set up appointments or discuss audits but not without first attempting to notify taxpayers by mail.
• IRS employees conducting criminal investigations are federal law enforcement agents and will never demand money.

Find more information about Criminal Investigation and how to know it’s really the IRS calling or knocking on doors for audits and collection on IRS.gov.

Avoid email, phishing and malware schemes

Scammers send emails that trick businesses and taxpayers into thinking the messages are official communications from the IRS or others in the tax industry. As part of phishing schemes, scammers sometimes ask taxpayers about a wide-range of topics, such as refunds, filing status, confirming personal information, ordering transcripts and verifying personal identification numbers.

The IRS does not use email, text messages or social media to discuss tax debts or refunds with taxpayers.

Calls from IRS-contracted private collection agencies

The IRS assigns certain overdue tax debts to private debt collection agencies or PCAs. Here are the facts about this program:

• The IRS will send a letter to the taxpayer letting them know the IRS has turned their case over to one of the four PCAs. The PCA will also send the taxpayer a letter confirming assignment of the taxpayer’s account to the agency.
• The IRS will assign a taxpayer’s account to only one of these agencies, never to all four. The IRS authorizes no other private groups to represent the IRS.
• It’s important to know that PCA representatives:
  • Will identify themselves and will ask for payment to “U.S. Treasury,”
  • Will not ask for payment on a prepaid debit or gift card, and
  • Will not take enforcement action.

How to report scams

Taxpayers can use these options to report phone, email and other impersonation scams:

• Report impersonation scams to the Treasury Inspector General for Tax Administration. on the “IRS Impersonation Scam Reporting” webpage or call to 800-366-4484.
• Report phone scams to the Federal Trade Commission using the FTC Complaint Assistant. Add "IRS Telephone Scam" in the notes.
• Report an unsolicited email claiming to be from the IRS or an IRS-related system like the Electronic Federal Tax Payment System to the IRS at phishing@irs.gov.

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Tax Reform

See how tax reform affects your business

Changes in Tax Rates

For 2018, most tax rates have been reduced. This means most people will pay less tax starting this year. The 2018 tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

nearly doubled standard deductions

Starting in 2018, the standard deduction for each filing status is $12,000 Single, $18,000 Head of household y $24,000 Married filling jointly and Qualifying widow(er). The amounts are higher if you or your spouse are blind or over age 65. Many taxpayers will no longer itemize their deductions and have a simpler time in filing their taxes.

Limit on overall itemized deductions suspended.

Your deduction for mortgage interest is limited. Miscellaneous itemized deductions suspended. you can deduct state and local income, sales, and property taxes but only up to $10,000 ($5,000 if Married Filing Separate

Child tax credit and additional child tax credit

For 2018, the maximum credit increased to $2,000 per qualifying child. Up to $1,400 of the credit can be refundable for each qualifying child as the additional child tax credit. In addition, the income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly.

Credit for other dependents

A new credit of up to $500 is available for each of your qualifying dependents other than children who can be claimed for the child tax credit.

Deduction for personal exemptions suspended

For 2018, you can’t claim a personal exemption deduction for yourself, your spouse, or your dependents.