4Thought Blog

Understanding how the IRS communicates can help taxpayers protect themselves from scammers who pretend to be from the IRS with the goal of stealing personal information.

Read on below to get insights from the IRS on how they communicate - and how they don't - so you can best be prepared to handle possible fraud attempts.

The Internal Revenue Service last week announced it’s automatically waiving the estimated tax penalty for the more than 400,000 eligible taxpayers who already filed their 2018 federal income tax returns but did not claim the waiver.

Earlier this year, the IRS lowered the usual 90% penalty threshold to 80% to help taxpayers whose withholding and estimated tax payments fell short of their total 2018 tax liability. The agency also removed the requirement that estimated tax payments be made in four equal installments, as long as they were all made by January 15, 2019.

With this year’s average tax refund around $2,700, the Internal Revenue Service reminds taxpayers they have options to control the amount of their take-home pay and the size of their tax refund by adjusting their tax withholding.

A Paycheck Checkup using the IRS Withholding Calculator can help taxpayers determine the right amount of tax they should have their employer withhold from their paychecks.

Although the April filing deadline has passed, scam artists remain hard at work, and the IRS is urging taxpayers to be on the lookout for a new surge of evolving phishing emails and telephone scams.

The IRS is seeing signs of two new variations of tax-related scams. One involves Social Security numbers related to tax issues and another threatens people with a tax bill from a fictional government agency. Here are some details:

Tax Reform through the Tax Cuts and Jobs Act provided a new tool for promoting and incentivizing long-term investment in low-income communities.

Opportunity Zones are economically-distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment.

Learn more about them in this comprehensive Opportunity Zones FAQ from the IRS. Also, see the Lehigh Valley’s Opportunity Zones here.

The IRS this week announced it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.

This relief is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act, the far-reaching tax reform law enacted in December 2017. 

During the summer, taxpayers often rent out their property. They usually think about things such as cleanup and maintenance, but owners also need to be aware of the tax implications of residential and vacation home rentals.

The IRS has released an updated Withholding Calculator and a new version of Form W-4 to help taxpayers check their 2018 tax withholding following passage federal tax reform.

The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets.

The IRS is enacting additional safeguards for the 2018 tax filing season to help further curb refund fraud.

Working with state tax agencies and private-sector industry leaders, the IRS also reported fewer identity theft returns, fewer fraudulent refunds and fewer taxpayers who were victims of identity theft.

Taxpayers who are victims of a disaster might need to reconstruct records to prove their loss. Doing this may be essential for tax purposes, getting federal assistance, or insurance reimbursement.

Here are 12 tips from the IRS taxpayers can do to help reconstruct their records after a disaster: