May: 2018

The IRS encourages taxpayers who typically itemized their deductions on Schedule A of the Form 1040 to use the Withholding Calculator this year to perform a “paycheck checkup.” The IRS encourages everyone to use it as soon as possible. Waiting could have a bigger impact on each pay check. Even though the standard deduction has substantially increased, millions of taxpayers who previously itemized, will have considerable higher taxable income as a result of the tax law change. If you need to change your W-4 to have more tax withheld, ask your employer for a new W-4.

The 2018 tax law change limits the amount of state and local tax that can be deducted to $10,000 in a calendar year. In response to this some state legislatures have adopted or are considering legislative proposals to make payments to specified entities in exchange for a tax credit against state and local taxes owed. This would enable taxpayers to exceed the $10,000 limit in deductions by renaming some of the taxes that are paid. IRS Notice 2018-54 informs taxpayers that federal law controls the characterization of the payments. In other words, if the state tries to rename some of the tax to avoid the limit, the ITS has the right to characterize it as taxes, which would overrule the state.

The 2018 tax law change extended the time a taxpayer has to file a wrongful levy claim if the IRS has sold the levied property. The new law gives taxpayers two years. There’s no time limit on to file a claim if the IRS has levied property, such as a house or car.

Subscribe To Our Newsletter

Join our mailing list to receive the latest news, tax tips, and updates from our team. 

You have Successfully Subscribed!