2019 Tax Season To Begin January 28th

The 2019 tax season begins on January 28, 2018.


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Yesterday, the IRS announced the 2019 Tax Filing Season will begin on Monday, January 28, 2018. This means individual tax returns can be filed beginning on that date. The IRS News Release can be found here.

Do you need help filing your 2018 taxes?  Please fill out the following form and we can discuss your situation.

Cheers!

Thomas C. Hodge, CPA

President

Hodge Group, LLC

Taxes in the Sharing Economy


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The “Sharing Economy” is a term that loosely covers things like Uber/Lyft drivers, making money on eBay/Amazon or other online sources, as well as bartering. The tax implications of the sharing economy are sometimes hard to determine but the IRS recently released a video with general explanations. A link is below.

Please feel free to leave me your thoughts:

Cheers!

Thomas C. Hodge
Founder

Hodge Group LLC
3943 N. Austin Avenue
Chicago, IL 60634

773.237.6369

First e-mail scam of the tax season


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First new IRS Scam e-mail popped into my inbox. Says there’s been an identity theft indicator on my account and references a CP01 Notice (this is an actual notice ID from the IRS about identity theft.

So, how do I know it’s bogus? First off, the IRS NEVER uses e-mail as a contact method – always postal service with signature or delivery confirmation. 2nd, it was sent to info@(my website), not a name, and lastly, the email to click on is forccis.com.br and the BR portion means Brazil…

I’m about to report this to the IRS as a phising scam. If you don’t know how to respond to scams like this, please check my blog post at: https://tomhodgecpa.wordpress.com/…/gotten-a-suspicious-ca…/

Please share this far & wide! There’s too many scams out there. Protect yourself as well as friends & family.

Please feel free to leave your thoughts below:

Cheers!

Thomas C. Hodge
Founder

Hodge Group LLC
3943 N. Austin Avenue
Chicago, IL 60634

773.237.6369

Earned Income Credit – Some Documents You May Need


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Taxpayers who claim the Earned Income Credit (EIC) can now claim up to 3 children and get additional monies for these dependents.  This is a change starting in 2016; in prior years there was a limit of 2 dependent children to determine the credit amount.

A key item to claiming the children is the ‘Residency Test’ to prove the child lived with the taxpayer(s) for more than half of the year in the United States (children who live in US Territories such as Guam or Puerto Rico do not count).  A question that often comes up is ‘How Do I Prove My Child Lives With Me?’.

Since this test is a requirement of getting the EIC, you’ll need to bring documents to your tax preparer.  The IRS has recommended as many of the following as you can provide, if the backup document(s) include the child’s name and address:

  • Health Provider Statement
  • Medical Records, including records obtained when going to a doctor/dentist
  • School Records or Statements
  • Landlord or Property Management Statement
  • Employer Statement (taxpayers sometimes need to fill out insurance forms stating the names/ages of people living within the household)
  • Child Care Providers annual statements
  • Statements from a Place of Worship (listing family members and their annual donation amount)
  • Placement Agency Statement

Other documents have been used – I’ve personally seen the following:7K0A0079

  1. Collection of envelopes addressed to the children, especially Christmas, Birthday and/or Holiday cards
  2. Photographs of children in front of their home
  3. Bank statements
  4. Statements showing balances in Education Fund plans

Be sure to bring as many documents as you can as backup and remember this is for each child claimed!

Please feel free to leave your thoughts below:

Cheers!

Thomas C. Hodge
Founder

Hodge Group LLC
3943 N. Austin Avenue
Chicago, IL 60634

773.237.6369

Some 2016 Federal Tax Refunds Will Be Delayed


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If you are claiming the Earned Income Credit (EIC) or the Additional Child Tax Credit (ACTC), your refund will be delayed until after February 15, 2017.

Part of the Protecting Americans from Tax Hikes (PATH) Act of 2015 requires the IRS to allow more time to review returns with these credits and verify information, including but not limited to:

  • Income
  • Social Security Number(s)
  • Names (must match the Social Security Database)
  • Historical information (did taxpayer claim the same individuals in prior years)

Anyone claiming these credits should note the IRS has cautioned taxpayers not to expect their refunds until at least the week of February 27, 2017.  Also the delay applies to your entire refund, not only the portions associated with the EIC and/or the ACTC.

If you are expecting a refund including either or both of these credits, you should take the delay into account especially if you normally use your refund to pay bills, make a major purchase, etc.  You can check the status of your federal refund online here.

Some tax changes (including the delays mentioned above) can be seen below:

2016 Tax Highlights Video

Thoughts or questions?  Please let me know using the form below.

Cheers!

Thomas C. Hodge
Founder

Hodge Group LLC
3943 N. Austin Avenue
Chicago, IL 60634

773.237.6369

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2016 Individual Income Tax Returns Can Be Filed Starting January 23, 2017


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The IRS announced today that tax returns for 2016 (filed in 2017) will be accepted starting Monday, January 23, 2017.  You may file returns before that date but the IRS will not be processing returns until January 23rd.

Returns claiming the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) will be reviewed more closely and any refunds claiming these credits will not be issued until at least February 15, 2017 and the IRS cautions taxpayers with these credits may not get refunds until February 27, 2017, at the earliest.

Normally Individual Income Tax returns are due by April 15th but that day falls on a Saturday so the deadline will be Tuesday, April 18, 2017 due to the preceding day, April 17, being a legal holiday (Emancipation Day) in the District of Columbia and the IRS will not process returns on that day, even in offices outside of DC.

Your tax preparer can begin tax preparation in January but remember your returns will not be accepted by the IRS until January 23rd and some refunds may be delayed so please keep this in mind when preparing your taxes this year.

Thoughts or questions?  Please let me know using the form below.

Cheers!

Thomas C. Hodge
Founder

Hodge Group LLC
3943 N. Austin Avenue
Chicago, IL 60634

773.237.6369

www.thehodgegroup.com

www.taxbillappeals.com – Property Tax Bill Appeals for Cook County IL

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Has the IRS contacted you to update your financial information? This may be why.

The IRS is starting to require updated annual financial information for payment plans.


Recently I called the Internal Revenue Service (IRS) in response to a letter asking a client for updated financial information while they (IRS) review her payment plan.  A very helpful agent took the time to explain why this is happening to a few of my clients.

As the IRS Agent explained, the IRS will no longer keep financial information on file for more than 1 year (instead of 2 or 3 years as had been done) and anyone (individual or business) who submitted financial information to process a payment plan will received a letter requiring updated financial information about 2 months prior to the anniversary date of a payment plan being established.

Once the IRS receives the updated financial information, an analysis will be made to determine if your payment amount should be adjusted (higher or lower).  Please realize you may be asked for backup information, including but not limited to: count_money

  • Pay Stubs
  • Bank Statements
  • Utility Bills
  • Mortgage or Car Note Statements
  • Insurance Policies (especially Whole Life Policies)
  • Statements from Investment and/or Retirement Funds
  • Backup for large expenses

Please realize if you are paying on an accepted Offer In Compromise (IRS Form 656), sending in new financial information does not apply.  The Offer In Compromise is set up specifically for payments of a certain amount over a specified period of time and (aside from prepayments) is rarely modified.

Also not affected are payment plans created without sending in financial data – normally for amounts owed under $50,000.  Normally the IRS does not ask for financial information if it was not needed for the original payment plan.

One reason this is done is to see if the amount owed can be paid off quicker.  Administering payment plans takes time and manpower and the IRS has been cutting back staff in recent years due to budget cuts.  So, if they can speed up collections, then less time/manpower needs to be allocated to payment plans and IRS personnel can work on other matters.

So, if you’ve applied for a payment plan that included your financial information with the IRS and it has been accepted, and the plan lasts for more than a year, you will more than likely get a letter requesting financial information by filling out an IRS form and return it to the IRS, or call them with the figures by a certain due date.  Normally you’ve got less than 30 days to prepare the IRS form and even if you call the IRS phone number, you may not get an extension as to when the financial information must be sent in (I was told the date was ‘fixed and could not be changed’).  Be prepared to send in the original signed form even if you call in the numbers.

You will receive one of the following 3 forms, depending on how much is currently owed on your payment plan:

  • IRS Form 433-D – used when the payment plan is for less than $50,000
  • IRS Form 433-A – Financial information for Individuals who owe more than $50,000
  • IRS Form 433-B – Financial information for Businesses that owe more than $50,000

Be aware this change impacts all types of payment plans – income tax, sales tax, payroll tax, civil penalties, etc.

If your payment plan is set up for several years (the limit is six years) and you had to send in your financial information to set up the plan, then you’ll get a demand for updated financial information annually until the dollar amount is paid off.

Please let me know if you’ve got any questions – lots of people get nervous (understandably!) when receiving a letter from the IRS.  I’m happy to work with you on completing the IRS forms.  Please write your comments or questions below.

Cheers!

Thomas C. Hodge
President

Hodge Group LLC
3943 N. Austin Avenue
Chicago, IL 60618

773.237.6369

www.thehodgegroup.com

www.taxbillappeals.com – Property Tax Bill Appeals for Cook County IL

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