Many Corporations Will Pay a Blended Federal Income Tax This Year Under the New Tax Reform Law
From the IRS | IR-2018-99 | April 16, 2018
Many U.S. corporations elect to use a fiscal year end and not a calendar year end for federal income tax reporting purposes. Due to a provision in the recently enacted Tax Cuts and Jobs Act (TCJA), a corporation with a fiscal year that includes January 1, 2018 will pay federal income tax using a blended tax rate and not the flat 21 percent tax rate under the TCJA that would generally apply to taxable years beginning after December 31, 2017.
Corporations determine their federal income tax for fiscal years that include January 1, 2018, by first calculating their tax for the entire taxable year using the tax rates in effect prior to TCJA and then calculating their tax using the new 21 percent rate, subsequently proportioning each tax amount based on the number of days in the taxable year when the different rates were in effect. The sum of these two amounts is the corporation’s federal income tax for the fiscal year.
IRS Urges ‘Paycheck Checkup’ for Key Groups; Tax Withholding May Need Adjustment
From the IRS | IR-2018-80 | April 2, 2018
The Internal Revenue Service encouraged several key groups of taxpayers to perform a “paycheck checkup” to check if they are having the right amount of tax withholding following recent tax-law changes.
The IRS emphasizes the new tax law changes make it especially important for specific groups of taxpayers to visit the Withholding Calculator on IRS.gov. This includes people in households with two or more jobs, who have children or dependents, who itemize their taxes, or who have high incomes or complex tax situations.
Inflation Adjustments Under Recently Enacted Tax Law
From the IRS | IR-2018-94 | April 13, 2018
The Internal Revenue Service has updated the tax year 2018 annual inflation adjustments to reflect changes from the Tax Cuts and Jobs Act (TCJA). The tax year 2018 adjustments are generally used on tax returns filed in 2019.
The tax items affected by TCJA for tax year 2018 of greatest interest to most taxpayers include the following dollar amounts:
"Where’s My Refund?" Online Tool Answers Commonly Asked Question
From the IRS | IR-2018-78 | March 29, 2018
The Internal Revenue Service said that most tax refunds are issued in less than 21 days, although some may take longer. As of March 16, the IRS had already issued more than 61 million refunds averaging $2,960. Taxpayers can check the status of their refund online at IRS.gov by visiting the “Where’s My Refund?” tool or through the IRS2Go mobile app.
There are many factors that can affect the timing of a tax refund. Some tax returns take longer to process because the return includes errors or is incomplete, is affected by identity theft or fraud or, in general, needs further review. The IRS will contact taxpayers by mail if more information is needed to process a return. Once a refund has been approved the time it takes a bank to post the refund to an account can also have an impact. If requesting a paper refund check, taxpayers should also take into consideration the time it takes for it to arrive in the mail.
Improved IRS Website: Best Way to Get Last-Minute Tax Help
From the IRS | IR-2018-91 | April 11, 2018
With just days remaining before the federal tax-filing deadline, the Internal Revenue Service said today that the new, mobile friendly website is available to help people who need last-minute tax information.
With more than 2.2 billion annual page views, IRS.gov offers online help for individual taxpayers as well as tax professionals. Based on website usage analytics, suggestions from the public, user testing and industry best practices, the IRS began updating the site last fall to address some of the issues that hindered the website’s usability.
IRS Reminds Taxpayers to Report Virtual Currency Transactions
From the IRS | IR-2018-71 | March 23, 2018
The Internal Revenue Service reminded taxpayers that income from virtual currency transactions is reportable on their income tax returns.
Virtual currency transactions are taxable by law just like transactions in any other property. The IRS has issued guidance in IRS Notice 2014-21 for use by taxpayers and their return preparers that addresses transactions in virtual currency, also known as digital currency.
Taxpayers who do not properly report the income tax consequences of virtual currency transactions can be audited for those transactions and, when appropriate, can be liable for penalties and interest.