Employee Spotlight – Maryam Nault

Maryam Nault, Staff Accountant, has been chosen as Employee of the Quarter. Maryam joined Wheeler in 2016 and supports our bookkeeping and tax departments. Our clients enjoy Maryam’s efficient, solutions driven approach and our Partners, Managers and staff appreciate that she is always willing to pitch in and help others wherever needed. Maryam is also excellent at providing suggestions for improving processes. Congratulations to Maryam and thank you for all the hard work!

Wheeler Accountants is 42nd Largest Accounting Firm in the Bay Area

Wheeler Accountants makes the Silicon Valley Business Journal’s list of largest accounting firms in the Bay Area. The ranking is based on number of client service professionals. This year we were ranked 42nd largest, moving up three spots for 2017. We are very proud to have so many talented client service professionals. Click here to see the list.

Owing Back Taxes could Affect Passport Renewal

Starting in February 2018, individuals with “seriously delinquent tax debts” will be subject to a new set of provisions courtesy of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015.

The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt and also requires the State Department to deny their passport application or deny renewal of their passport. In certain instances, the State Department may revoke their passport.

Taxpayers affected by this law are those with a seriously delinquent tax debt, generally, an individual who owes the IRS more than $51,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired, or the IRS has issued a levy.Continue reading

Employers: Beware of the Form W-2 Scam

The Form W-2 scam has emerged as one of the most dangerous phishing emails in the tax community. During the last two tax seasons, cybercriminals tricked payroll personnel or people with access to payroll information into disclosing sensitive information for entire workforces.

Last year, more than 200 employers were victimized, resulting in hundreds of thousands of employees with compromised identities. The scam affected all types of employers, from small and large businesses to public schools and universities, hospitals, tribal governments, and charities.

What is a Form W-2?

Employers engaged in a trade or business who pay remuneration for services performed by an employee must file a Form W-2 for each employee from whom:

  • Income, social security, or Medicare tax was withheld.
  • Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4, Employee’s Withholding Allowance Certificate.

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Five Tax Breaks that Survived Tax Reform

Recent tax reform legislation affected many provisions in the tax code. Many were modified, either permanently or temporarily, while some were repealed entirely. Here are five that survived.

1. Mortgage Interest Deduction

While the House bill repealed the mortgage interest deduction, the final version of the act retained it, albeit with modifications. First is that the allowed interest deduction is limited to mortgage principal of $750,000 on new homes (i.e., new ownership). For prior tax years, the limit on acquisition indebtedness was $1 million. Existing mortgages are grandfathered in, however, and taxpayers who enter into binding contracts before December 15, 2017, to close on the purchase of a principal residence before January 1, 2018, and who purchase such residence before April 1, 2018, are able to use the prior limit of $1 million.

2. Personal Taxes: State and Local Income Tax, Sales Tax and Property Tax

In prior years, taxpayers who itemize were allowed to deduct the amount they pay in state and local taxes (SALT) from their federal tax returns. Slated for repeal (with the sole exception of exception of a state and local property tax deduction capped at $10,000) under both the House and Senate versions of the tax bill, SALT remained in the final tax reform bill in modified form. As such, for taxable years 2018 through 2025, the aggregate deduction for property taxes, state, local, and foreign income taxes, or sales taxes is limited to $10,000 a year ($5,000 married filing separately).Continue reading

Updated Withholding Tables for 2018

Updated income-tax withholding tables have been released for 2018 reflecting changes made by the tax reform legislation enacted last month.

The updated withholding information, available on IRS.gov, shows the new rates for employers to use during 2018. Employers should begin using the 2018 withholding tables as soon as possible, but not later than February 15, 2018. They should continue to use the 2017 withholding tables until implementing the 2018 withholding tables.

Many employees will begin to see increases in their paychecks to reflect the new law in February. The time it will take for employees to see the changes in their paychecks will vary depending on how quickly the new tables are implemented by their employers and how often they are paid, generally weekly, biweekly or monthly.

To minimize the burden on taxpayers and employers, the new withholding tables are designed to work with the Forms W-4 that workers have already filed with their employers to claim withholding allowances. Employees do not have to do anything at this time.

Under the new law there are a number of changes for 2018 that affect individual taxpayers. The new withholding tables reflect the increase in the standard deduction, repeal of personal exemptions and changes in tax rates and brackets.

For people with more simple tax situations, the new tables are designed to produce the correct amount of tax withholding. The revisions are also aimed at avoiding over- and under-withholding of tax as much as possible.

To help people determine their withholding (and adjust as needed), the IRS is revising the withholding tax calculator on IRS.gov and should be available by the end of February.

Don’t hesitate to call our office at 408-252-1800 if you need help figuring out your withholding in 2018.

Tax Filing Season Begins; Tax Returns due April 17

More than 155 million individual tax returns are expected to be filed in 2018, according to the IRS, which began accepting electronic and paper tax returns on Monday, January 29, 2018. The January 29 opening date was set to ensure the security and readiness of key tax processing systems in advance of the opening and to assess the potential impact of tax legislation on 2017 tax returns.

Note: Although the IRS began accepting both electronic and paper tax returns January 29, paper returns will not begin processing until mid-February as system updates continue.

April 17 Filing Deadline

The filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018, rather than the traditional April 15 date. In 2018, April 15 falls on a Sunday, and this would usually move the filing deadline to the following Monday (April 16). However, Emancipation Day, which is a legal holiday in the District of Columbia, will be observed on that Monday. This pushes the nation’s filing deadline to Tuesday, April 17, 2018. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

Refunds in 2018

The IRS anticipates issuing more than nine out of 10 refunds in less than 21 days, but there are some important factors to keep in mind.

The IRS will begin releasing refunds for taxpayers claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) starting February 15. However, these refunds–even the portion not associated with the EITC and ACTC–are not likely to arrive in bank accounts or on debit cards until the week of February 27. This date assumes that there are no processing issues with the tax return and the taxpayer chose direct deposit.

Taxpayers should be aware that many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For example, the three-day holiday weekend involving Presidents’ Day may affect the timing of refunds for EITC and ACTC filers.

Don’t hesitate to call our office at 408-252-1800 if you have any questions or need assistance filing your tax return this year.

Donating a Car to Charity

If you donated a car to a qualified charitable organization in 2017 and intend to claim a deduction, you should be aware of the special rules that apply to vehicle donations.

Note: You can deduct contributions to a charity only if you itemize deductions using Schedule A of Form 1040.

Charities typically sell donated vehicles. If the vehicle is sold by the charitable organization you donated it to, the deduction claimed by the donor (you) and usually may not exceed the gross proceeds from the sale.

If the donated vehicle sells for less than $500, you can claim the fair market value of your vehicle up to $500 or the amount it is sold for if less than fair market value.Continue reading

Missing Important Tax Forms? Here’s what to do

Form W-2

You should receive a Form W-2, Wage and Tax Statement, from each of your employers for use in preparing your federal tax return. Employers must furnish this record of 2017 earnings and withheld taxes no later than January 31, 2018 (allow several days for delivery if mailed).

If you do not receive your Form W-2, contact your employer to find out if and when the W-2 was mailed. If it was mailed, it may have been returned to your employer because of an incorrect address. After contacting your employer, allow a reasonable amount of time for your employer to resend or to issue the W-2Continue reading