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File Without 1095-B or 1095-C
6-Month Extension Period for Calendar Year C Corporations
Early Withdrawals from Retirement Plans
The State of Pennsylvania has released their 2017 tax due date reference guide.
Warning: QuickBooks Phishing Scam
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File Without 1095-B or 1095-C

According to Question 14 on the IRS Health Care Information Forms FAQ, you do not have to wait for either Form 1095-B or 1095-C from your client’s coverage provider or employer to file the individual income tax return. You can use other forms of documentation in lieu of the Form 1095 information returns to prepare the tax return. Other forms of documentation that would provide proof of a taxpayer’s insurance coverage include:
  Insurance cards
  Explanation of benefits statements from the insurer.
  W-2 or payroll statements reflecting health insurance deductions.
  Records of advance payments of the premium tax credit.
  Other statements indicating that the family had health care coverage.

6-Month Extension Period for Calendar Year C Corporations

The IRS revised the Instructions for Form 7004 allowing calendar year C corporations an automatic 6-month extension.

Previously §6081(b) granted a five-month extension for corporate returns. Section 6081(a) has been updated to allow a 6-month automatic extension. The extended due date will move to October 15 instead of the original September 15 due date.



Early Withdrawals from Retirement Plans

Many people find it necessary to take out money early from their IRA or retirement plan. Doing so, however, can trigger an additional tax on top of income tax taxpayers may have to pay. Here are a few key points to know about taking an early distribution:

  1. Early Withdrawals. An early withdrawal normally is taking cash out of a retirement plan before the taxpayer is 59½ years old.

  2. Additional Tax. If a taxpayer took an early withdrawal from a plan last year, they must report it to the IRS. They may have to pay income tax on the amount taken out. If it was an early withdrawal, they may have to pay an additional 10 percent tax.

  3. Nontaxable Withdrawals. The additional 10 percent tax does not apply to nontaxable withdrawals. These include withdrawals of contributions that taxpayers paid tax on before they put them into the plan. A rollover is a form of nontaxable withdrawal. A rollover occurs when people take cash or other assets from one plan and put the money in another plan. They normally have 60 days to complete a rollover to make it tax-free.

  4. Check Exceptions. There are many exceptions to the additional 10 percent tax. Some of the rules for retirement plans are different from the rules for IRAs.

  5. File Form 5329. If someone took an early withdrawal last year, they may have to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return. Form 5329 has more details.

The State of Pennsylvania has released their 2017 tax due date reference guide.

Warning: QuickBooks Phishing Scam


The Better Business Bureau has issued a warning about a new phishing scam targeting small businesses. The message looks like an email alert from accounting software QuickBooks with the subject line “QuickBooks Support: Change Request.”
The email is worded to “confirm” that you have changed your business name with Intuit, QuickBooks’ manufacturer. Though you haven’t made such a request, the email contains a link to cancel. Do not click this “cancel” link. It is used as bait. When clicked, the link will download malware onto your device, which scammers use to capture passwords or hunt for sensitive information on your machine. This can ultimately open you up to identity theft.

PENNSYLVANIANS CAN NOW SEND STATE TAX REFUNDS DIRECTLY TO A PA 529 COLLEGE SAVINGS ACCOUNT

PA Treasurer Joe Torsella announced that, for the first time, Pennsylvanians can deposit their state income tax refund directly into an existing, tax-exempt Pennsylvania 529 College Savings Program account. With the new option, all or a portion of a refund can be sent to one or multiple accounts. The process is simple. When completing your PA-40, Personal Income Tax Return, enter code H and the amount in the donation section between lines 32-36. Additionally, submit a PA-Schedule P with your return when donating to one or more Pennsylvania 529 College Savings Program accounts.

Refund Transfers

As Tax Season has officially started we are excited to offer once again refund transfers through Santa Barbara Bank. Our fees are the lowest in the region.

IRS, States and Tax Industry Renew Alert about Form W-2 Scam Targeting Payroll, Human Resource Departments

The Internal Revenue Service, state tax agencies and the tax industry today renewed their warning about an email scam that uses a corporate officer’s name to request employee Forms W-2 from company payroll or human resources departments.
This week, the IRS already has received new notifications that the email scam is making its way across the nation for a second time. The IRS urges company payroll officials to double check any executive-level or unusual requests for lists of Forms W-2 or Social Security number.


The W-2 scam first appeared last year. Cybercriminals tricked payroll and human resource officials into disclosing employee names, SSNs and income information. The thieves then attempted to file fraudulent tax returns for tax refunds. This phishing variation is known as a “spoofing” e-mail. It will contain, for example, the actual name of the company chief executive officer. In this variation, the “CEO” sends an email to a company payroll office or human resource employee and requests a list of employees and information including SSNs. The following are some of the details that may be contained in the emails:

Kindly send me the individual 2016 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review.
Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary).
I want you to send me the list of W-2 copy of employees wage and tax statement for 2016, I need them in PDF file type, you can send it as an attachment. Kindly prepare the lists and email them to me asap.

Five Reasons to Choose Direct Deposit

Easy, safe and fast — that’s direct deposit. It’s the best way to get a tax refund. Eighty percent of taxpayers choose it every year. The IRS knows taxpayers have a choice of how to receive their refunds.


IRS Direct Deposit:

1. Is Fast. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit. Use IRS Free File to prepare and e-file federal returns for free. Use direct deposit for paper tax returns, too.

2. Is Secure. Since refunds go right into a bank account, there’s no risk of having a paper check stolen or lost in the mail. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.


3. Is Convenient. There’s no need to wait for a refund check to come in the mail.


4. Is Easy. Choosing direct deposit is easy. With e-file, just follow the instructions in the tax software. For paper returns, the tax form instructions serve as a guide. Make sure to enter the correct bank account and routing number.

5. Has Options. Taxpayers can split a refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts. The U.S. Treasury Department offers a retirement account. It’s called a MyRA account. Designate all or a part of a refund to a new MyRA account. Simply mark the “savings” box in the refund section of the return. Use IRS Form 8888, Allocation of Refund (including Savings Bond Purchases), to deposit a refund in up to three accounts. Do not use Form 8888 to designate part of a refund to pay tax preparers. Taxpayers should deposit refunds into accounts in their own name, their spouse’s name or both. Avoid making a deposit into accounts owned by others. Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Taxpayers should check with their bank for direct deposit rules. There is a limit of three electronic direct deposit refunds made into a single financial account or pre-paid debit card. The IRS will send a notice and a refund check in the mail to taxpayers who exceed the limit.

February 1st through February 7th Enrolled Agents Week in the Commonwealth of Pennsylvania

February 1st through February 7th Enrolled Agents Week official proclamation from Governor Tom Wolf Commonwealth of Pennsylvania.