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March: 2018

April 1 is the deadline for taxpayers who turned 70 ½ during 2017, for starting their minimum distribution (RMDs) from retirement account (IRA, 401K). A 50% penalty applies to any required amounts not received by April 1.

The IRS issued a notice that proposed regulations will be issued addressing the deductibility of state and local income tax purposes.

All C corporations will have a flat tax rate of 21%. Personal service corporations will have the 21% rate also.

The IRS is urging taxpayers to check their account balance by using the IRS.gov/account. In addition, taxpayers can:

View the amount they owe
Pay online or set up an online payment agreement.
Access their tax records.
Review the past 18 months of payment history.
View key tax information for the most recent tax return they filed.

The IRS encourages everyone to check the status of their refund by using “Where’s my refund” on the IRS website.

Avoid scams and inaccurate returns.

The penalty for filing a “frivolous tax return” is $5,000. A frivolous tax return is one that does not include enough information to figure the correct tax, or contains information clearly showing that the tax reported is substantially incorrect.

In addition to the full amount of tax owed, a taxpayer could be assessed a penalty of 75% of the amount owed if the underpayment on the tax returned resulted from fraud.

Tax payers who falsely add income to their tax return to get a larger refund from Earned Income Credit can face a large bill to repay the erroneous refunds, including penalties and interest, and may even face criminal prosecution.

The IRS granted many businesses affected by severe winter storms additional time to request a six-month extension to file their 2017 federal income tax returns. Taxpayers hit by storm Quinn and storm Skylar can file Form 7004 on or before March 20, 2018. Write “Winter Strom Quinn” or “Winter Storm Skylar” on the Form 7004 extension form.