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Taxpayers may need to take money out of their individual retirement account or retirement plan early. However, this can trigger an additional tax on top of other income tax they may owe. Here are a few key things for taxpayers to know:

• Early Withdrawals. An early withdrawal normally is taking cash out of a retirement plan before the taxpayer is 59½ years old.  
• Additional Tax. The IRS charges a 10 percent penalty on early withdrawals from most qualified retirement plans. There are some exceptions to this rule.
• Nontaxable Withdrawals. The additional tax does not apply to nontaxable withdrawals. These include withdrawals of contributions that taxpayers paid tax on before they put them into the retirement plan.
• Rollovers are a nontaxable withdrawal. A rollover happens when taxpayers take cash or other assets from one retirement plan and put the money in another plan within 60 days. A rollover can also happen when they direct their plan administrator to make the payment directly to another retirement plan or to an IRA.
• Form 5329. Taxpayers who took an early withdrawal last year may have to file Form 5329 with their federal tax return. 

If you need tax help please call one of our offices:

Plymouth 734.454.4100, Allen Park 313.388.7180,
Grayling 989.348.4055, Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

It’s almost here…the filing deadline for taxpayers who requested an extension to file their 2018 tax return. This year’s deadline is Tuesday, October 15.

Even though time before the extension deadline is dwindling, there’s still time for taxpayers to file a complete and accurate return. Taxpayers should remember they don’t have to wait until October 15 to file. They can file whenever they are ready.

Taxpayers who did not request an extension and have yet to file a 2018 tax return can generally avoid additional penalties and interest by filing the return as soon as possible and paying the amount owed.

Here are a few tips and reminders for taxpayers who have not yet filed:

Use IRS Free File or other electronic filing options.

Taxpayers can file their tax return electronically for free through IRS Free File. The program is available on IRS.gov through Oct. 15. Filing electronically is easy, safe and the most accurate way to file taxes. Other electronic filing options include using a free tax return preparation site, commercial software or an authorized e-file provider.

Taxpayers getting a refund should use Direct Deposit.

The fastest way for taxpayers to get their refund is to file electronically and use direct deposit.

There are online payment options.

Taxpayers with extensions should file their tax returns by Oct. 15 and, if they owe, pay as much as possible to reduce interest and penalties. IRS Direct Pay allows individuals to securely pay from their checking or savings accounts. These taxpayers can consider a payment plan, which allows them to pay over time. For other payment options, taxpayers can visit the Paying Your Taxes page on IRS.gov.

There’s more time for the military.

Military members and those serving in a combat zone generally get more time to file. These taxpayers usually have until at least 180 days after they leave the combat zone to file returns and pay any taxes due.

There’s also more time in certain disaster areas.

People who have a valid extension and are in – or affected by – a federally-declared disaster may be allowed more time to file.

Keep a copy of tax return.

Taxpayers should keep a copy of their tax return and all supporting documents for at least three years.

Taxpayers can view their account information.

Individual taxpayers can go to IRS.gov/account and login to:

• View their balance.
• See their payment history.
• Pay their taxes.
• Access tax records through Get Transcript.

Before setting up an account, taxpayers should review Secure Access: How to Register for Certain Online Self-Help Tools to make sure they have the info needed to verify their identities.

If you haven’t filed your 2018 tax return and you need help, Call us:

Plymouth 734.454.4100, Allen Park 313.388.7180,
Grayling 989.348.4055, Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

Disasters can strike without warning, causing damage and destruction. Before the IRS can authorize tax relief, the president must declare a federal disaster. Here’s a rundown of tax-related things that usually happen after a disaster:

The IRS gives taxpayers more time to file and pay.
Taxpayers located in a disaster area may have extra time to file returns and pay taxes. The IRS’s Twitter account and disaster assistance page provide disaster updates and links to resources. Taxpayers can also call the IRS’s disaster line at 866-532-5227. 

Taxpayers can qualify for a casualty loss tax deduction.
People who have damaged or lost property due to a federally declared disaster may qualify to claim a casualty loss deduction. They can claim this on their current or prior-year tax return. This may result in a larger refund. The IRS will quickly process these returns. 

People can file for a disaster loan or grant.
The Small Business Administration offers financial help to business owners, homeowners and renters. This help is for those in a federally declared disaster area. To qualify, a taxpayer must have filed all required tax returns. 

Taxpayers might need a tax return transcript.
People affected by a disaster can get copies or transcripts of past tax returns for free by submitting one of two forms. These are Form 4506, Request for Copy of Tax Return, and Form 4506-T, Request for Transcript of Tax Return. The taxpayer should state on the form the request is related to a disaster. They should also list the state and type of event. This whelps speed up the process.

People should submit a change of address.
After a disaster, people might need to temporarily relocate. Those who move should notify the IRS know about their new address by submitting Form 8822, Change of Address. 

The IRS encourages affected taxpayers to review all federal disaster relief by visiting disasterassistance.gov. 

For help with Disaster relief or any other tax question, call one of our offices:

Plymouth 734.454.4100, Allen Park 313.388.7180,
Grayling 989.348.4055, Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

Keeping full and accurate homeowner records is not only vital for claiming deductions on your tax return, but also for determining the basis or adjusted basis of your home. These records include your purchase contract and settlement papers if you bought the property, or other objective evidence if you acquired it by gift, inheritance, or similar means. You should also keep any receipts, canceled checks, and similar evidence for improvements or other additions to the basis.

Here are a few examples:

• Putting an addition on your home
• Replacing an entire roof
• Paving your driveway
• Installing central air conditioning
• Rewiring your home
• Assessments for local improvements
• Amounts spent to restore damaged property

In addition, you should keep track of any decreases to the basis such as:

• Insurance or other reimbursement for casualty losses
• Deductible casualty loss not covered by insurance
• Payment received for easement or right-of-way granted
• Value of subsidy for energy conservation measure excluded from income
• Depreciation deduction if home is used for business or rental purposes

How you keep records is up to you, but they must be clear and accurate and must be available to the IRS. You must also keep these records for as long as they are important for the federal tax law.

Keep records that support an item of income or a deduction appearing on a return until the period of limitations for the return runs out. A period of limitations is the limited period of time after which no legal action can be brought.

For assessment of tax, the period of limitations is generally three years from the date you filed the return. When filing a claim for credit or refund, the period of limitations is generally three years from the date you filed the original return or two years from the date you paid the tax, whichever is later. Returns filed before the due date are treated as filed on the due date.

You may need to keep records relating to the basis of property longer than the period of limitations. For example, basis is needed to determine gain on home sale. Any gain on sale of a home is tax-exempt for amounts up to $250,000 ($500,000 for married couples). Basis is also important in figuring casualty loss, on conversion of the home to business use, or where there’s a gift of the home (in this case, it is important to the donee). You should keep these records for as long as needed because they are important in figuring the basis of the property. Generally, this means for as long as you own the property and, after you dispose of it, for the period of limitations that applies to you.

If you have any questions as to what items are to be considered in determining basis, don’t hesitate to call.

Plymouth 734.454.4100, Allen Park 313.388.7180,
Grayling 989.348.4055, Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

Everyone should know how the IRS contacts taxpayers. This will help people avoid becoming a victim of scammers who pretend to be from the IRS with a goal of stealing personal information.

Here are some facts about how the IRS communicates with taxpayers:

• The IRS doesn’t normally initiate contact with taxpayers by email.
• The agency does not send text messages or contact people through social media.
• When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service.  Fraudsters will send fake documents through the mail, and in some cases will claim they already notified a taxpayer by U.S. mail.
• Depending on the situation, IRS employees may first call or visit with a taxpayer. In some instances, the IRS sends a letter or written notice to a taxpayer in advance, but not always.
• IRS revenue agents or tax compliance officers may call a taxpayer or tax professional after mailing a notice to confirm an appointment or to discuss items for a scheduled audit.
• Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice.
• IRS revenue officers and agents routinely make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed, delinquent tax returns or a business falling behind on payroll tax deposits. IRS revenue officers will request payment of taxes owed by the taxpayer. However, taxpayers should remember that payment will never be requested to a source other than the U.S. Treasury.
• When visited by someone from the IRS, the taxpayers should always ask for credentials. IRS representatives can always provide two forms of official credentials: a pocket commission and a Personal Identity Verification Credential.

For help with your taxes, contact one of our offices:

Plymouth 734.454.4100, Allen Park 313.388.7180,
Grayling 989.348.4055, Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

Oct. 15 is almost here, and it’s the last day to file for most people who requested an automatic six-month extension for their 2017 tax returns. These taxpayers should remember that they can file any time before Oct. 15 if they have all their required tax documents. They can also pay their tax bill in full, or make a partial payment, anytime, by visiting IRS.gov/payments.

As extension filers prepare to file, here are some things they should know:

• They can still use IRS Free File. Nearly everyone can e-file their tax return for free through IRS Free File. The program is available on IRS.gov now through October 15. IRS e-file is easy, safe and the most accurate way for people to file their taxes. E-file also helps people get all the tax benefits they’re entitled to claim.
•  A refund may be waiting. Anyone due a refund should file as soon as possible to get their money. The sooner someone files, the sooner they’ll get it. Don’t forget to use Direct Deposit. It is the best and fastest way for taxpayers to get their tax refund electronically deposited for free into their financial account. 
• They should consider IRS Direct Pay. Taxpayers who owe taxes can pay them with IRS Direct Pay. It’s the simple, quick and free way to pay from a checking or savings account. Taxpayers can just click on the ‘Pay’ at IRS.gov.
• Here’s what taxpayers should do about a missed deadline. Anyone who did not request an extension by this year’s April 17 deadline should file and pay as soon as possible. This will stop additional interest and penalties from adding up. IRS Direct Pay offers a free, secure and easy way to pay taxes directly from a checking or savings account. There is no penalty for filing a late return for people who are due a refund. 
• Taxpayers should remember the October 15 Deadline. Taxpayers who aren’t ready to file yet should remember to file by Oct. 15 to avoid a failure-to-file penalty. Taxpayers who owe and can’t pay their balance in full should pay as much as they can to reduce interest and penalties for late payment. They can use the Online Payment Agreement tool to apply for more time to pay or set up an installment agreement. In most cases, the failure-to-file penalty is 10 times more than the failure-to-pay penalty.
• More Time for the Military.  Members of the military and others serving in a combat zone get more time to file. These taxpayers typically have until at least 180 days after they leave the combat zone to both file returns and pay any taxes due.

For help with your unfiled 2018 taxes, contact one of our offices:

Plymouth 734.454.4100, Allen Park 313.388.7180,
Grayling 989.348.4055, Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600