Jerry Jones CPA
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Retirees with Pension Income should do a Paycheck Checkup ASAP

Retirees should do a Paycheck Checkup to make sure they are paying  enough tax during the year by using the Withholding Calculator, available on IRS.gov. The Tax Cuts and Jobs Act, enacted in December 2017, changed the way tax is calculated for most taxpayers, including retirees.

Because of this law change, retirees who receive a monthly pension or annuity check may need to raise or lower the amount of tax they pay in during the year. The easiest way to do that is to use the Withholding Calculator or readPublication 505, Tax Withholding and Estimated Tax. Though primarily designed for employees who receive wages, this online tool can also help those who receive pension or annuity payments on a regular schedule, usually monthly or quarterly.

IRS launches new easy-to-use web pages to help all taxpayers understand tax reform

 

With an updated tax reform section and frequent updates, the IRS website should be the first stop for taxpayers looking for information about how tax reform legislation – the Tax Cuts and Jobs Act – affects their taxes. Here are some facts about these new easy-to-read, easy-to-use pages and what taxpayers can find on them:

IRS to introduce new tax transcript to better protect taxpayer data

WASHINGTON – Moving to better protect taxpayer data, the Internal Revenue Service today announced a new format for individual tax transcripts that will redact personally identifiable information from the Form 1040 series.

This new transcript replaces the previous format and will be the default format available via Get Transcript Online, Get Transcript by Mail or the Transcript Delivery System for tax professionals as of September 23. Financial entries will remain visible, which will give taxpayers and third-parties the data they need for tax preparation or income verification.

Additionally, based on stakeholder feedback, the IRS also has created a new Customer File Number that lenders, colleges and other third parties that order transcripts for non-tax purposes can use as an identifying number instead of the taxpayer’s SSN.

Taxpayers scramble as proposed IRS rule on local taxes wrecks workaround strategy

The clock is ticking for taxpayers who want to contribute to state tax credit programs and nab a charitable deduction to boot on their federal return.

The IRS and Treasury's newly released proposed regulations block blue state attempts to bypass the new $10,000 limit on state and local tax deductions, also known as SALT.

This limit was imposed by the Tax Cuts and Jobs Act, an overhaul of the tax code that was passed last year.

Though the new guidance from Treasury and the IRS is a proposal at this point, it has an effective date of Aug. 27 and is intended to apply to transactions made after then.

IRS Urges Taxpayers with High Income, Complex Returns to Check Withholding

The IRS urges high-income taxpayers and those with complex tax returns to complete a “paycheck checkup.” Doing so will help them see if they are having the correct amount of taxes withheld from their paychecks for the rest of this year. The IRS Withholding Calculator and Publication 505, Tax Withholding and Estimated Tax, can help these taxpayers do their checkup. The Tax Cuts and Jobs Act, which was passed last year, brought many tax law changes. With that in mind, a checkup is important for taxpayers with high incomes and complex returns because they are often affected by more of these changes than someone with a simpler return.

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