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IRS Proposes Revised Fees for Installment Agreements
ACA and Employers: Understanding the Terms Affordable and Minimum Value Coverage
Check Your Tax Withholding this Summer to Prevent a Tax-Time Surprise
Maryland Power of Attorney for Tax Purposes
About Your IRS Notice or Letter
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IRS Proposes Revised Fees for Installment Agreements

The Internal Revenue Service is proposing a revised schedule of user fees that would take effect on Jan. 1, 2017, and apply to any taxpayer who enters into an installment agreement.


Installment Agreement Fees
The revised installment agreement fees of up to $225 would be higher for some taxpayers than those currently in effect, which can be up to $120. The top rate of $225 applies to taxpayers who enter into an installment agreement in person, over the phone, by mail or by filing Form 9465 with the IRS. But a taxpayer who establishes an agreement in this manner can substantially cut the fee to just $107 by choosing to make their monthly payments by direct debit from their bank account. Alternatively, a taxpayer who chooses to set up an installment agreement using the agency’s Online Payment Agreement application will pay a fee of $149. Similarly, they can cut this amount to just $31 by also choosing direct debit. Proposed Fees
Here is the proposed schedule of user fees: Regular installment agreement: $225 Regular direct debit installment agreement: $107 Online payment agreement: $149 Direct debit online payment agreement: $31 Restructured or reinstated installment agreement: $89 Low-income rate: $43

ACA and Employers: Understanding the Terms Affordable and Minimum Value Coverage

In general, under the employer shared responsibility provisions of the Affordable Care Act, an applicable large employer may either offer affordable minimum essential coverage that provides minimum value to its full-time employees and their dependents or potentially owe an employer shared responsibility payment to the IRS.
Here is information to help you understand affordable coverage and minimum value coverage.

Affordable coverage: If the lowest cost self-only only health plan is 9.5 percent or less of your full-time employee’s household income then the coverage is considered affordable. Because you likely will not know your employee’s household income, for purposes of the employer shared responsibility provisions, you can determine whether you offered affordable coverage under various safe harbors based on information available to you. Minimum value coverage: An employer-sponsored plan provides minimum value if it covers at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan.

Check Your Tax Withholding this Summer to Prevent a Tax-Time Surprise

Each year, many people get a larger refund than they expect. Some find they owe a lot more tax than they thought they would. If this has happened to you, review your situation to prevent a tax surprise. Did you marry? Have a child? Change in income? Life events can have a major impact on your taxes. Bring the taxes you pay closer to the amount you owe. Here are some tips to help you come up with a plan:


New Job. When you start a new job, you must fill out a Form W-4, Employee's Withholding Allowance Certificate, and give it to your employer. Your employer will use the form to figure the amount of federal income tax to withhold from your pay. Use the IRS Withholding Calculator on IRS Website to help you fill out the form. This tool is easy to use and it’s available 24/7.

Estimated Tax. If you earn income that is not subject to withholding you may need to pay estimated tax. This may include income such as self-employment, interest, dividends or rent. If you expect to owe $1,000 or more in tax, and meet other conditions, you may need to pay this tax. You normally pay it four times a year. Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to figure the tax.

Life Events. Check to see if you need to change your Form W-4 or change the amount of estimated tax you pay when certain life events take place. A change in your marital status, the birth of a child or the purchase of a new home can change the amount of taxes you owe. In most cases, you can submit a new Form W–4 to your employer anytime.

Changes in Circumstances. If you are receiving advance payments of the premium tax credit, it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

Maryland Power of Attorney for Tax Purposes

The Maryland Comptroller's Office has released the long-awaited Maryland Power of Attorney, Form 548 (POA) and Form 548P, Reporting Agent Authorization (RAA). Use of the new POA and RAA began on July 1, 2016. The Form 548P will replace the use of the Federal Form 8655, which will no longer be accepted. The Comptroller will still accept the Federal Form 2848, Power of Attorney and Declaration of Representative, or a Form 8821, Tax Information Authorization, until December 31, 2016. The new Maryland POA and RAA must be used beginning January 1, 2017 - the Comptroller will no longer accept the federal forms after that date.

If a taxpayer currently has a Power Of Attorney on file with the Comptroller's office, the taxpayer is not required to submit a new Maryland POA. The Power of Attorney on file will remain effective until it is revoked by the taxpayer or a new Power of Attorney is filed.

About Your IRS Notice or Letter

The IRS normally sends correspondence in the mail. We mail millions of letters to taxpayers every year. Keep these important points in mind if you get a letter or notice:

 Don’t Ignore It. You can respond to most IRS notices quickly and easily.  Follow Instructions.

 Read the notice carefully. It will tell you if you need to take any action. Be sure to follow the instructions. The letter will also have contact information if you have questions. Focus on the Issue. IRS notices usually deal with a specific issue about your tax return or tax account. Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. You can learn more about your notice or letter on IRS Website  

Correction Notice. If the IRS corrected your tax return, you should review the information provided and compare it to your tax return.

If you agree, you don’t need to reply unless a payment is due. If you don’t agree, it’s important that you respond. Follow the instructions on the notice for the best way to respond to us. You may be able to call us to resolve the issue. Have a copy of your tax return and the notice with you when you call.

If you choose to write to the IRS, be sure to include information and any documents you want us to consider. Also, write your taxpayer identification number (Social Security number, employer identification number or individual taxpayer identification number) on each page of the letter you send. Mail your reply to the address shown on the notice.

Allow at least 30 days for a response. Respond to Requests about the Premium Tax Credit. The IRS may send you a letter asking you to clarify or verify your premium tax credit information. You should follow the instructions on the letter. For more information about these letters, see the Understanding Your Letter 0012C page on IRS Website. You Don’t Need to Visit the IRS. You can handle most notices without visiting the IRS. If you have questions, call the phone number in the upper right corner of the notice. Have a copy of your tax return and the notice when you call. Keep the Notice. Keep a copy of the IRS notice with your tax records.

Watch Out for Scams. Don’t fall for phone and phishing email scams that use the IRS as a lure. We will contact you about unpaid taxes by mail first – not by phone. Be aware that the IRS does not initiate contact with taxpayers by email, text or social media.

IRS Says be Alert for Tax Scams

Tax scammers work year-round; they don’t take the summer off. The IRS urges you to stay vigilant against calls from scammers impersonating the IRS. Here are several tips from the IRS to help you avoid being a victim:

Scams use scare tactics. These aggressive and sophisticated scammers try to scare people into making an immediate payment. They make threats, often threaten arrest or deportation, or they say they’ll take away your driver’s or pro...fessional license if you don’t pay. They may also leave “urgent” callback requests, sometimes through “robo-calls.” Emails will often contain a fake IRS document with a phone number or an email address for you to reply.

Scams spoof caller ID. Scammers often alter caller ID to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legit. They may use online resources to get your name, address and other details about your life to make the call sound official. 

Scams use phishing email and regular mail. Scammers copy official IRS letterhead to use in email or regular mail they send to victims. In another new variation, schemers provide an actual IRS address where they tell the victim to mail a receipt for the payment they make. This makes the scheme look official.

Scams cost victims over $38 million. The Treasury Inspector General for Tax Administration, or TIGTA, has received reports of more than one million contacts since October 2013. TIGTA is also aware of more than 6,700 victims who have collectively reported over $38 million in financial losses as a result of tax scams.

The real IRS will not:
The IRS will not call you about your tax bill without first sending you a bill in the mail.
Demand that you pay taxes and not allow you to question or appeal the amount that you owe.
Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card or any specific type of tender.
Ask for credit or debit card numbers over the phone.
Threaten to bring in police or other agencies to arrest you for not paying.
Threaten you with a lawsuit.

Keep in Mind the Child and Dependent Care Credit this Summer

Day camps are common during the summer months. Many parents enroll their children in a day camp or pay for day care so they can work or look for work. If this applies to you, your costs may qualify for a federal tax credit. Here are 10 things to know about the Child and Dependent Care Credit:

1. Care for Qualifying Persons. Your expenses must be for the care of one or more qualifying persons. Your dependent child or children under age 13 generally qualify.

2. Work-related Expenses. Your expenses for care must be work-related. In other words, you must pay for the care so you can work or look for work. This rule also applies to your spouse if you file a joint return. Your spouse meets this rule during any month they are a full-time student. They also meet it if they are physically or mentally incapable of self-care.

3. Earned Income Required. You must have earned income. Earned income includes wages, salaries and tips. It also includes net earnings from self-employment. Your spouse must also have earned income if you file jointly. Your spouse is treated as having earned income for any month that they are a full-time student or incapable of self-care.

4. Joint Return if Married. Generally, married couples must file a joint return. You can still take the credit, however, if you are legally separated or living apart from your spouse.

5. Type of Care. You may qualify for the credit whether you pay for care at home, at a daycare facility or at a day camp.

6. Credit Amount. The credit is worth between 20 and 35 percent of your allowable expenses. The percentage depends on your income.

7. Expense Limits. The total expense that you can use in a year is limited. The limit is $3,000 for one qualifying person or $6,000 for two or more.

8. Certain Care Does Not Qualify. You may not include the cost of certain types of care for the tax credit, including:
Overnight camps or summer school tutoring costs.
Care provided by your spouse or your child who is under age 19 at the end of the year.
Care given by a person you can claim as your dependent.

9. Keep Records and Receipts. Keep all your receipts and records for when you file taxes next year. You will need the name, address and taxpayer identification number of the care provider. You must report this information when you claim the credit on Form 2441, Child and Dependent Care Expenses.

10. Dependent Care Benefits. Special rules apply if you get dependent care benefits from your employer.

Tax Tips for Students Working this Summer

Many students get summer jobs. It’s a great way to earn extra spending money or to save for later. Here are some tips for students with summer jobs:

1. Withholding and Estimated Tax. If you are an employee, your employer normally withholds tax from your paychecks. If you are self-employed, you may be responsible for paying taxes directly to the IRS. One way to do that is by making estimated tax payments on set dates during the year. This is essentially how our pay-as-you-go tax system works.

2. New Employees. When you get a new job, you need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from your pay. The IRS Withholding Calculator tool on IRS Website can help you fill out the form.

3. Self-Employment. Money you earn working for others is taxable. Some work you do may count as self-employment. These can be jobs like baby-sitting or lawn care. Keep good records of your income and expenses related to your work. You may be able to deduct those costs. A tax deduction generally reduces the taxes you pay.

4. Tip Income. All tip income is taxable. Keep a daily log to report your tips. You must report $20 or more in cash tips received in any single month to your employer. And you must report all of your yearly tips on your tax return.

5. Payroll Taxes. You may earn too little from your summer job to owe income tax. But your employer usually must withhold social security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count for your coverage under the Social Security system.

6. Newspaper Carriers. Special rules apply to a newspaper carrier or distributor. If you meet certain conditions, you are self-employed. If you do not meet those conditions, and are under age 18, you may be exempt from Social Security and Medicare taxes.

7. ROTC Pay. If you’re in ROTC, active duty pay, such as pay you get for summer advanced camp, is taxable. Other allowances you may receive may not be taxable, see Publication 3 for details.

Form 8850 Filing Deadline Extended

Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, must be signed by you and the individual you hired, then submitted to the state employment security agency (SESA) of the state in which your business is located (where the employee works) by the 28th calendar day after the date the individual begins work.
For individuals who began working for you on or after January 1, 2015 (January 1, 2016, for qualified long-term unemployment recipients), and on or before August 31, 2016, you now have until September 28, 2016, to complete, sign and submit Form 8850 to the SESA.

Here are some facts to know about next year tax filing season

W-2's are due to Social Security Administration January 31 instead of February 28th

No automatic extensions to file W-2's is gone.

1099-MISC that have box 7 non-employee compensation will be due to the IRS January 31

EITC and Additional Child Tax Credit Tax Return refunds will be held up by the IRS until February 15th

Partnership Tax Returns are due March 15th and C-Corp Tax Returns due April 15th