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Taxpayers with individual taxpayer identification numbers should find out if their number expires this year.  If it does, they should renew it now to avoid delays with their refund when they file their taxes next year.

An ITIN is a tax ID number used by taxpayers who don’t qualify for a Social Security number. Here’s what these taxpayers need to know about which numbers are expiring and how to renew them.

Which numbers are expiring at the end of this year?

Any ITIN with middle digits 83, 84, 85, 86 or 87.
Any ITIN not used on a tax return in the past three years.

What about numbers that expired in the last few years?
ITINs with middle digits 70 through 82 that expired in 2016, 2017 or 2018 can also be renewed.

How does someone renew their number?

Taxpayers with expiring ITINs need to complete renewal application, Form W-7, Application for IRS Individual Taxpayer Identification Number. They should include all required ID and residency documents. Failure to do so will delay processing. until the IRS receives these documents.

When should someone submit their renewal applications?

As soon as possible. With nearly 2 million taxpayer households affected, applying now will help avoid the rush.

What are some tips to avoid common mistakes that are made when submitting their renewal?

• Indicate the reason for the ITIN on the Form W-7.
• Mail the proper identification documents. Taxpayers mailing their ITIN renewal applications must include original identification documents or copies certified by the issuing agency and any other required attachments.
• Include all supporting documentation, such as U.S. residency or official documentation to support name changes.
• Complete the new W-7 application.

If you need help renewing your ITIN 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

Taxpayers should be on the lookout for new variations of tax-related scams. In the latest twist on a scam related to Social Security numbers, scammers claim to be able to suspend or cancel the victim’s SSN. It’s yet another attempt by con artists to frighten people into returning ‘robocall’ voicemails.

Scammers may mention overdue taxes in addition to threatening to cancel the person’s SSN. If taxpayers receive a call threatening to suspend their SSN for an unpaid tax bill, they should just hang up.

Make no mistake…it’s a scam.

Taxpayers should not give out sensitive information over the phone unless they are positive they know the caller is legitimate. When in doubt –hang up. Here are some telltale signs of this scam. The IRS and its authorized private collection agencies will never:

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, iTunes gift card or wire transfer. The IRS does not use these methods for tax payments.
• Ask a taxpayer to make a payment to a person or organization other than the U.S. Treasury.
• Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
• Demand taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

Taxpayers who don’t owe taxes and have no reason to think they do should:

• Report the call to the Treasury Inspector General for Tax Administration.
• Report the caller ID and callback number to the IRS by sending it to phishing@irs.gov. The taxpayer should write “IRS Phone Scam” in the subject line.
• Report the call to the Federal Trade Commission. When reporting it, they should add “IRS Phone Scam” in the notes.

Taxpayers who owe tax or think they do should:

• View tax account information online at IRS.gov to see the actual amount owed and review their payment options.
• Call the number on the billing notice
• Call the IRS at 800-829-1040.

For help with your taxes or anything tax related, 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

When a taxpayer files their tax return, they need to know their filing status. What folks should remember is that a taxpayer’s status could change during the year. So, any time is a good a time for a taxpayer to learn about the different filing statuses and which one is best for them.

Knowing the correct filing status can help taxpayers determine several things about filing their tax return:

• Is the taxpayer required to file a federal tax return or should they file to receive a refund?
• What is their standard deduction amount?
• Is the taxpayer eligibility for certain credits?
• How much tax they should pay?

The taxpayer’s filing status generally depends on whether they are single or married on Dec. 31 and that is their status for the whole year.
 
Here’s a list of filing statuses and a description of who claims them:

• Single. Normally this status is for taxpayers who are unmarried, divorced or legally separated under a divorce or separate maintenance decree governed by state law.
• Married filing jointly. If a taxpayer is married, they can file a joint tax return with their spouse. When a spouse passes away, the widowed spouse can usually file a joint return for that year.
• Married filing separately. Alternatively, married couples can choose to file separate tax returns. It may result in less tax owed than filing a joint tax return.
• Head of household. Unmarried taxpayers may be able file using this status, but special rules apply. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person living in the home for half the year. Taxpayers should check the rules to make sure they qualify.
• Qualifying widow(er) with dependent child. This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child. Other conditions also apply.

More than one filing status may apply and taxpayers can generally choose the filing status the allows them to pay the least amount of tax.

Need tax help? 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

The earned income tax credit benefits working people with low-to-moderate income. Last year, the average credit was $2,445. EITC not only reduces the amount of tax someone owes, but may also give them a refund, even if they don’t owe any tax at all.

Here are a few things people should know about this credit:

• Taxpayers may move in and out of eligibility for the credit throughout the year. This may happen after major life events. Because of this, it’s a good idea for people to find out if they qualify.
• To qualify, people must meet certain requirements and file a federal tax return. They must file even if they don’t owe any tax or aren’t otherwise required to file.
• Taxpayers qualify based on their income, the number of children they have, and the filing status they use on their tax return. For a child to qualify, they must live with the taxpayer for more than six months of the year.

Here’s a quick look at the income limits for the different filing statuses. Those who work and earn less than these amounts may qualify.

Married filing jointly:

• Zero children: $21,370
• One child: $46,884
• Two children: $52,493
• Three or more children: $55,952

Head of household and single:

• Zero children: $15,570
• One child: $41,094
• Two children: $46,703
• Three or more children: $50,162

The maximum credit amounts are based on the number of children a taxpayer has. They are the same for all filing statuses:

• Zero children: $529
• One child: $3,526
• Two children: $5,828
• Three or more children: $6,557

Taxpayers who file using the status married filing separately cannot claim EITC.

For help planning your taxes, 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

With school back in session, parents and students should look into tax credits that can help with the cost of higher education. They do this by reducing the amount of tax someone owes on their tax return. If the credit reduces tax to less than zero, the taxpayer may get a refund.

Taxpayers who pay for higher education in 2019 can see these tax savings when they file their tax returns next year. If taxpayers, their spouses or their dependents take post-high school coursework, they may be eligible for a tax benefit.

There are two credits available to help taxpayers offset the costs of higher education. The American opportunity tax credit and the lifetime learning credit may reduce the amount of income tax owed. Taxpayers use Form 8863, Education Credits, to claim the credits.

To be eligible to claim the American opportunity tax credit, or the lifetime learning credit, a taxpayer or a dependent must have received a Form 1098-T from an eligible educational institution.

The American opportunity tax credit is:

• Worth a maximum benefit up to $2,500 per eligible student.
• Only for the first four years at an eligible college or vocational school.
• For students pursuing a degree or other recognized education credential.
• Partially refundable. This means if the credit brings the amount of tax owed to zero, 40 percent of any remaining amount of the credit, up to $1,000, is refundable.

The lifetime learning credit is:

• Worth a maximum benefit up to $2,000 per tax return, per year, no matter how many students qualify.
• Available for all years of postsecondary education and for courses to acquire or improve job skills.
• Available for an unlimited number of tax years.

For help with your taxes, 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