As of now, the deadline to file your 2017 taxes has passed, even if you filed for an extension. If this is news to you, then yes, that happened Monday.  If you have yet to file, get on that quick to at least minimize the penalties and interest for which you may be liable.

This also means that now everyone is going to point their focus toward the 2018 tax filing season and just what the Tax Cuts and Job Act is going to make your tax return look like.

I feel like I am talking about this almost every week, but there seems to be news about it every week. The IRS is still figuring out how all the aspects of the reform bill will look in implementation. You can visit the agency’s news website and see that even this month amongst getting through the extension deadline and issues with natural disasters, the IRS also is moving to make small businesses aware of new rules that affect them and clarifying meals and entertainment deductions. There’s no reason to think these bouts of clarification and advice will stop before filing season begins (and seeing some come during the filing season is also a safe bet).

And if you want to know – the general rule now is that those deductions that fell under entertainment are no longer deductible. 50% of meals and beverages can still be deducted, as long as they are not “lavish or extravagant.”

Then there was this recent article from Accounting Today, where many tax preparers were asked about what questions clients had about the TCJA’s changes. It seems like this can best be summed up as “all of them.”

I think this stems from the fact that taxes are such an individual matter. If you’re filing a personal return or a business return, you will have different questions. If you are a small business, you will have different questions than if you are a big business. If you are a high-wealth individual, you will have different question than if you have an average income.

Even within those groups, the questions will change. How will your dependents and children affect the return? Will you still be able to itemize deductions? What is this SALT thing? And then there are pass-through deductions and what qualifies as a specified service, trade or business.

No matter who you are, chances are something in there reads like Greek to you – yet they all appear in the article as crucial issues.

You probably won’t need to worry about the parts you don’t know about, but the parts you do recognize are likely not going to work the same way they did last year. It is difficult to feel content in times of uncertainty, and the constant updates and changes mean that uncertainly won’t go away completely. There are some things that are known, though, and having that knowledge, and asking the questions that do concern you, is a good thing.

So if you have questions, let us help you get the best grip on your situation possible as we enter the final downhill stretch toward the 2018 filing season.

I say it all the time, but taxes are never simple. It also appears that tax fraud criminal cases can also feel complicated.

Last week, the New York Times reported that the IRS’s criminal division only brought 795 cases last year in which tax fraud was the primary crime. That is an astoundingly small number. Heck, it’s plausible that in a week you could list 795 people whose names you come across in your personal circle that paid taxes.

At the same time, though, tax evasion is also the highlight of the criminal cases against two former associates of President Trump, Paul Manafort and Michael Cohen. So the number of people who face these cases is small, but it may not matter who you are, or how much money you have, when it comes to having charges brought against you. It can feel a little more daunting is everyone is vulnerable

Also in the Times last week came a lengthy report on President Trump himself and the history of his finances. It was so lengthy that any attempt at summation does it an injustice, but let’s just say it includes claims of tax schemes devised to not pay what the president’s family legitimately owed.

On the heels of this report, New York state and city officials said that they will look at those allegations. That’s not (or maybe just not yet) yet to the level of the IRS, but it is at least another possible high-profile case of tax dealings being investigated.

Now I am sure that there are a number of taxpayers (and their advisers) who use less-than-scrupulous tactics to get more money back from, or at least pay less to, the government. And with this small number of tax fraud criminal cases, and the ever decreasing number of audits as the IRS receives less and less funding, more people are probably getting away with it.

When I read about cases like those above, though, when things catch up to the cheats, I can only imagine how their heart must drop. When you abuse the tax system to that degree, you must know that what you’re doing is unscrupulous and that there is the chance it will catch up to you. You can make some moves to make things look okay on paper, sure, but that falls away when someone pays attention to it.

It is such situations that also make me wonder when I hear people talk about how the system favors the rich. The rich may be able to afford the people who can help them work best within the system, but even that service they pay for. And if they try to go outside of the legality of the system, they can get caught, too. I can understand envy of the rich, but it is not like they’re operating with different rules here. 

Even those who don’t live with elite levels of wealth, though, can use the system to their best legal advantage and there are professionals also willing to help you do that. I can never say that this service will be cheap, but I pride myself in being committed to serving my clients to the best of my ability, and in a way where they don’t have to keep looking over their shoulder.

I want to begin this blog with a general public service announcement. If back in April you got an extension for filing your taxes, you now have less than two weeks to complete that task. Six months goes by fast when you’re not paying attention, doesn’t it?

That’s about all I want to say on that issue. Yes, we still have some appointments open if you need one to work through this. And we will do all we can under this time crunch to make things work out for you in the best way possible.

Along with this looming deadline, though, comes a renewed thrust by scammers to work some tax schemes. It only makes sense (through their twisted logic), for the more general anxiety that already exists around taxes, the more vulnerable one could be to fall victim to these scams.

This led the IRS to send out a reminder on scam tactics. There does not seem to be any new ones out there right now, but a few things are worthy of reminders. The first is that if you get a call from someone claiming to be from the IRS, chances are really good that they are not agency employees. Your first contact from the IRS will almost always be by mail (and probably only would not be if you did not have a correct address on file). Moreover, if anyone claims they are from the IRS and demands immediate payment by some odd source like prepaid debit cards of money wires, then this is DEFINITELY not the IRS.

I want to put a bigger spotlight on email phishing scams, for this is something I have not discussed as much in the past.  This probably comes from a personal bias where I find it pretty easy to weed out suspicious-looking emails, and they get quickly deleted, while the phone calls feel like more of an intrusion (and it seems like they’ve grown to where a majority of people have now received some sort of financial scam call). Those emails, though, while less obvious, could also be working under the radar.

Remember this general rule – if you receive an email from an unknown sender that contains attached files or internet links, do not click on them. We are sharing more and more things over the internet and this can be wonderful, but if you don’t know where something came from, chances are it is not good.

By clicking on such things, you open yourself up not only to computer viruses or malware that could make for an immediate problem, but you unwittingly may be putting something on your computer that is working behind the scenes to pull information you do not want exposed. General protection software thankfully does a pretty good job of keeping most of these things at bay, but some extra vigilance could mean they do not have to do as much work.

Finally, this time of year also requires being on the lookup for fake charity scams in the wake of natural disasters. This does not mean do not donate, but a quick Google search can help you vet potential places to send your funds and make sure they are helping where you want them to help.

Yes, it’s more Tax Cuts and Jobs Act talk. It’s the blog gift that keeps on giving, and promises to keep on giving through next tax season, too.

When I have written about this blast of tax reform, I have attempted to not be political about it. What one feels about the reform matters little here, for we must operate under the rules passed no matter what they area. A recent survey commissioned by the Republican National Committee, though, says that many are not happy with the reform measures.

I came across this news in an article on Accounting Today, where it was reported that respondents, by about a two-to-one margin, believe that reform favors the rich. Breaking it down into just whether people approve of the measures passed (because hey, if you’re rich and you think it favors the rich, you’re all for that), 45 percent of people were against the moves and 44 percent were in favor. That sounds like a good microcosm of our country right there.

I only imagine that stories like this are going to proliferate as we move toward tax season. There will be ever more predictions about what tax returns are going to look like, and then we will have feedback once the returns are filed. This isn’t wrong, we should have opinions in a democracy. I do, however, urge you to separate that a bit from your actual tax prep.

Again, these are the rules, we have to abide by them. Some of you reading this are going to love the new rules when you see your return, some of you reading this are going to curse the new rules when you see your return. Just remove that emotion from the actual filing.

Instead, do the things you’re supposed to do, follow the rules you’re supposed to follow. We will help you use them to your greatest advantage and understand why things work the way they do. Whether or not anyone likes it.

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On another note, the Treasury Inspector General has figured out what caused an outage at the IRS on Tax Day 2018 that put quite a crimp in that last-day flurry of activity.

Granted, this doesn’t seem like it should have taken months to figure out – I mean, they did fix the problem, right? Shouldn’t that tell them what went wrong to some degree? – but at least the news was good. Good for everyone who isn’t the IRS anyway.

The final conclusion was that it was a firmware problem. The timing still makes this completely embarrassing for the agency, but at least it wasn’t any sort of outside attack that brought things down. I write a lot in this space about keeping your information safe, and what the IRS does to help achieve this goal, and I do think they deserve some credit for what they do well.

Just stay tuned a week or two, I’m sure we’ll be able to talk about something it doesn’t do well, too.

Granted, this is probably because I had different things to worry about when it passed, but I didn’t think about how the Tax Cuts and Jobs Act would affect tax fraud. A recent article from Accounting Today, though, takes a look at how some proponents claimed that it would have this effect.

Spoiler alert: there is not a whole lot of optimism among tax professionals that that will be the outcome.

On one hand, it is easy to see how people felt that less fraud would be a positive outcome. The setup of the new plan is that more people will be taking fewer deductions, and that seems like it would provide fewer places for people to cheat.

On the other hand, as some interviewed in the article allude to, it just means that people will probably look for other places to pad their numbers. What this seems to come down to is that the rules are different, but it is not as if people are any more thrilled with paying taxes.

And illegal actions aside, people should look for places where they can use the new rules to their advantage. Contrary to what some say, it is not as if taxes have suddenly become simple. The rules are complex and those with the proper knowledge will find ways to use it to their advantage. This isn’t fraud, and even should be encouraged, but the mindsets are similar – getting the most that you can returned to you.

Also mentioned in the article is the funding of the IRS, something that tax reform did not really handle. The agency has been receiving less funding for years and now has to implement a large number of new rules. It is easy to see how this could lead to more things slipping through the cracks. This is never something one should count on, though.

As a personal note, I am sure the new rules will also lead to new mistakes. I only call them mistakes because not everyone is going to know how to work within the new rules and it will lead to honest errors. The IRS won’t simply overlook these, though.

No one likes to pay taxes, and only a very simple system would present a situation where people could not try to turn things to their advantage and also know they’re doing everything correctly. The complicated system isn’t going away, though, so just be sure you operate in a legal way with the proper support. That is just good practice no matter the rules and what we always strive to provide.

Another good practice to mention now is thinking of disaster plans. I know I spoke of this last week, but with the destruction from Hurricane Florence that followed, I thought it would do well to mention it again. Especially after I read this article about how many businesses don’t have a disaster plan, never mind individuals.

Again, this is something that is not fun, but something is worth spending the time to do.

As I also mentioned last week, the IRS does offer some relief for those affected by natural disasters, and this has happened for those affected by the latest storm. For those who want the official data on it, please click here.

Occasionally my job is just to remind you of things you may have heard before, things that that the IRS wants to make sure you remember. A lot of these things are usually dictated by the calendar.

So to start, estimated tax payments can be due for many on Monday, September 17. This is something that may need to be spoken about more as an increasing number of people earn their living in non-traditional ways. You see, taxes are supposed to be paid as you earn money. This isn’t a big deal if you have a W2 job, for that money is being taken out of your paycheck each time you are paid.

If you do not earn a large portion of your money in such a way, though, and expect to owe taxes at the end of the year, the IRS really wants you checking in with it four times a years and making estimated payments toward that tax bill. If you do not do that, you could face penalties when you next file your tax return.

If this is something you want to check in on and see if you should be making such payments, don’t hesitate to contact us.

The calendar is also telling us that it is hurricane season again, and as images from the news remind of the potential disaster of these events, it is also worth a reminder that you want to take some actions to protect your finances from acts of nature.

So first, think about where your key documents are kept. If you have something that would be difficult to replace if lost, it should be protected. A safe that can guard against most disasters may be more affordable than you think, and what it pays back in peace of mind could even more valuable. And this should not only be physical documents, think about where the digital information is kept, and ensure that it is not in only one location.

Second, documenting the valuables in your home could help you recoup their value if you ever have an insurance claim. This is even easier than getting a safe now that almost everyone carries a phone with a camera in their pocket all the time. A series of photos of your valuables can help support any claims you have to make.

Lastly, when large disasters do strike, there is often some deadline leniency given by the IRS when it comes to making payments or filing forms. This is only small solace, but it is something to remember and be thankful for when you are dealing with larger, more pressing life issues.

Overall, all of these little bits come down to being proactive and not procrastinating. Those are lessons that are always worth remembering no matter the subject or date. So as always, if there is anything that you have been wanting to do with your finances, be it personal or business, let us know. We would love to help, and if we cannot, we can at least point you in the right direction.

I feel like this blog is either going to be shouted into the void or have you shaking your head because I have said these things already and you are sick of hearing them. I’m going to say them one more time, though, in the hopes that maybe it can catch someone new before going off into that void.

Simply put – next time you file your taxes, the rules are going to be different, and you should check your withholding now to know where you will stand when it comes time to file.

I am saying this based on a recent article from accountingtoday.com, where many in the tax industry speak to their concern that not enough people are doing this and some could be in for a surprise when they see their return.

I think part of this may come from politics. If someone is in favor of the basic changes that were made, they may expect positive ramifications. And with the increases in the standard deduction, this is a reasonable expectation.

But do you have children? Were you previously taking a mortgage interest deduction? Are you counting on charitable contributions still having an impact? That increased deduction is going to be a simple positive for many, but it decreases or negates the impact of other deductions. There are also other changes in the law that affect other areas of your return so that the standard deduction’s impact is lessened.

As I have also said before, tax law is complicated, and it remains complicated even under the new system. A full reporting doesn’t really fit on a postcard (and yes, I’ve said that before, too), so it’s not something that you can hope to figure out without a deep look.

So why not take that deep look?  You have four months still to put yourself in a good position and know what to expect come filing time. That is time you can make work for you, but time that is continually dwindling.

A final note from this article that I want to highlight is one interviewee’s statement on how people think the rich have some secrets they use within the tax system, when really they just are better prepared and paying more attention throughout the year. This is so true that it deserves notice.

Do you want to make it feel like you aren’t paying that much in taxes? Plan throughout the year, so that you’ll know what the bill is going to be. And when you know that, you can have the proper money either taken out of your paycheck or made in quarterly payments so that the burden feels manageable.

So from here on out, I’m going to try to not mention this anymore. I have said it’s worth checking up on these things, now you can see an article where many others say the same thing, and we’re months after the passage of the Tax Cuts and Jobs Act, so you have had time to take action.

Consider this then my ‘I told you so,’ if you decide not to do a tax checkup now, so that I don’t have to say it in a few months.