IRS does not call you! Phone Calls from IRS is a new Scam

The new scam is that you get a very official sounding phone call from the Internal Revenue Service or the Untied State Treasury of America.  Please do not talk or give any information to the person on the other side of the phone. The best thing is to hang up or write the number down and report it to the IRS. Usually these phone calls are about your refund, bank account error, taxes due, or error in your return.

IRS does not call anyone, if there is an issue with your taxes, you will be receiving a letter from the Treasury or your State. Even then, you need to examine the letter and make sure it is a legitimate correspondence.

 

2nd payment of your Property Taxes – Due on or before 4/10/2018

Pay your property taxes on or before April 10 to avoid any penalties. The penalties are 10% of the taxes due if paid after the due date and the penalties increase as the unpaid balance becomes older.  These taxes can be paid on-line by going to the county tax collector site of where your property is located. The taxes can also be paid thru the mail and no penalties will occur if the payment is postmarked on or before the dead-line.

How new tax laws can affect your education plans

When the talk of tax reform first began last year, there was a lot of theory about the implications for educational loans and debt. Because students seeking loans, and those already paying on student loans worried that the changes would mean money out of their pockets.

Here is what is left intact:

  • American Opportunities Credit (AOC), a credit of up to $2,500 per eligible student.
  • Lifelong Learner credit, a credit of up to $2,000 for qualified education expenses.
  • Student loan interest deduction.  The student loan interest deduction of up to $2,500 stays intact. This benefit still gets phased out the more you earn. E.g. single tax filers earning more than $80,000 and couples earning over $165,000 no longer qualify for this deduction.
  • Employer tuition assisted remains nontaxable. Employers can contribute up to $5,250 a year to your qualifying continuing education.

Changes related to the Section 529 accounts:

Use of Section 529 accounts is expanded. Per US Security and Exchange Commission, A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

Contributions to a 529 plan aren’t deductible, but amounts deposited in the plan can grow tax free until distributed

Starting in 2018

  • “Qualifying distributions” will include tuition at public, private or religious schools.
  • In addition to college tuition, section 529 also applies to elementary or secondary schools.
  • Section 529 will be limited to $10,000 per student during any taxable year

The new legislation only affects the federal tax treatment.  Each state is to review the impact to determine if they will adopt a similar approach at a state income tax level.

There is a $2,000 annual contribution limit to Coverdell Education Savings Accounts (Contributions to a Coverdell ESA aren’t deductible, but amounts deposited in the account can grow tax free until distributed).  The ability to contribute is phased out when income exceeds the phaseout limit.

Note: For people who are just starting to get educational funding in 2018, it will be important to understand the different types of student loans available and what the tax consequences will be when 2018 taxes get filed.  Obtaining all of the information you can and planning accordingly will give you the best tool to minimize the tax impacts and alleviate any unintentional impact to your credit score. To leave yourself in the best shape in terms of both taxes and credit, plan for your tax liability and use different strategies to repay your student loans.

Still time to contribute to your IRA for 2017

The deadline for 2017 IRA contributions is on or before April 17th. Individuals under 50 years old can contribute up to $5,500 per year. Individuals over 50 years old can contribute up to $6,500. Make sure to let your investment company know that your contribution is for tax year 2017.

Mileage Rates for 2018

According to IRS, the standard mileage rates for 2018 for the use of a car, vans, pickups or panel trucks is as follows:
* 54.5 cents for every mile of business travel driven.
* 18 cents per mile driven for medical or moving purposes.
* 14 cents per mile driven in service of charitable organizations.