Is My Refund Delayed? What Can I Do?

If you rely on your refund, plan for delays
If you rely on your refund, plan for delays

“Will my refund be delayed this year” is becoming an all too common refrain these days. Delayed e-filing dates, IRS not accepting tax forms & documents not being mailed out on time have all occurred over the last few years and have caused refund delays. However for the 2017 tax filing season (2016 tax year), it looks like we will get hit with all three of these scenarios at once:

Electronic Filing Date Delayed

This tax year, E-filing will begin January 23rd, 2017.  Electronic filing has historically began around January 15th.  However, over the past few years, these dates have been pushed back from a couple of days to a couple of weeks, so this is becoming common practice by the IRS.  Returns may be filed before this date, however the IRS will not process them until 1/23/17.

IRS Delaying Processing of Popular Tax Credits

The IRS has announced that the following tax credit forms will not be accepted for processing until February 15th, 2017:

  • Earned Income Tax Credit (EITC)
  • Additional Child Tax Credit (ACTC)
  • The American Opportunity Credit (AOTC).

This is a nationwide law change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act; this is not a company or state change. If you normally file your taxes around this time (2/15/17), this delay should have a minimal impact on you.  However, if you tend to file early and/or have plans for your tax refund in advance, R&G Brenner suggests that you prepare yourself accordingly.  If you are unable to save funds, don’t worry, you can apply for R&G Brenner’s refund advances & referral rewards for CASH! (below).

R&G Brenner Refund Advances

If you rely on your refund, and these delays will seriously affect you, don’t worry; R&G Brenner has multiple refund advances for qualified R&G Brenner clients:

R&G Brenner Referral Rewards

Taxes may never be fun, but they are rewarding with R&G Brenner on your team.  Last year we paid out over $100,000 in CASH for client referrals.  Get $50 CASH for every new client you refer to R&G Brenner; NO LIMIT!  Click here to start earning today!

While we can’t control IRS delays, we can offer our clients a little relief from these delays.  Become an R&G Brenner client and receive the benefits.  Schedule an appointment today for a FREE estimate or call us toll free at (888) APRIL-15.

 

Employers Must Provide W2s & 1099s By January 31st

The IRS has a new due date requirement of 1/31/17 for employers to provide W2s & 1099s to employees & contractors.  Traditionally, 1099s were allotted more time to be delivered.  Not so for 2017 (tax year 2016).  Here are some more popular forms that must be released by 1/31:

By January 31 (Note new due dates for Tax Year 2016 Form W-2, Wage and Tax Statement, and Form 1099, Miscellaneous Income with Box 7 entries)

This is welcome news as the start of tax season has been delayed until 1/23 and popular tax credits cannot be filed until 2/15.

Will My Refund Be Delayed This Year?

If your rely on your refund, plan for delays
If your rely on your refund, plan for delays

“Will my refund be delayed this year” is becoming an all too common refrain these days. Delayed e-filing dates, IRS not accepting tax forms & documents not being mailed out on time have all occurred over the last few years and have caused refund delays. However for the 2017 tax filing season (2016 tax year), it looks like we will get hit with all three of these scenarios at once:

Electronic Filing Start Date

Electronic filing has historically began around January 15th.  However, over the past few years, these dates have been pushed back from a couple of days to a couple of weeks.  This year is notable because as of time of this writing, the IRS has not even formally announced a beginning date to electronic filing!  A commencement date is usually announced weeks if not months earlier.  Therefore, it is a good bet to expect electronic filing to begin after 1/15 this year.  We will post the official start date once the IRS releases it.

IRS Delaying Processing of Popular Tax Credits

The IRS has announced that the following tax credit forms will not be accepted for processing until February 15th, 2017:

  • Earned Income Tax Credit (EITC)
  • Child Tax Credit (CTC)
  • Additional Child Tax Credit (ACTC)
  • The American Opportunity Credit (AOTC).

This is a nationwide law change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act; this is not a company or state change. If you normally file your taxes around this time (2/15/17), this delay should have a minimal impact on you.  However, if you tend to file early and/or have plans for your tax refund in advance, R&G Brenner suggests that you prepare yourself accordingly. For example: if you rely on your refund for critical services (rent, utilities, etc), we suggest that you save some funds to carry you through any potential delays.

IRS Delays Form 1095 Distribution Deadline

The original deadline for distributing Form 1095-B and Form 1095-C to individuals was January 31, 2017. The new deadline is March 2, 2017. The extension provides Applicable Large Employers (ALEs), self-insured group health plans, and health insurance carriers more time to populate and distribute the forms.  Since a final tax return cannot be filed without these health care related reporting, this too may delay the filing of your return and receipt of your refund.

These delays will affect taxpayers who claim popular credits & professional tax preparers the most as it may create a backlog and crush of appointments later on in the year.  R&G Brenner suggests that you bring with you all supporting documentation for the above tax credits which will allow for the accurate preparation of your return and help minimize any potential delays.

If you have any additional questions about this or anything else, please feel free to contact an R&G Brenner professional via the web, or by calling us toll free: (888) APRIL-15.

How To Protect My Financial Information

10 Tips To Protect Your Taxpayer & Financial Info
10 Tips To Protect Your Taxpayer & Financial Info

October is Cyber Security Awareness month, and the New York State Department of Taxation & Finance has released a list of 10 tips that all taxpayers should know in order to protect their financial information and keep it from falling into the wrong hands:

1. Be wary of aggressive phone scams – Be sure to only give personal information—including social security numbers—to someone you trust. Remember, the NYS Tax Department and the IRS will contact you by mail first and will never threaten you over the phone or demand payment be made through MoneyGram, Western Union, or other wire transfer services; or using iTunes, Greendot, or other cash or gift cards.

2. Avoid phishing scams – Taxpayers may receive emails with authentic-looking government logos that offer assistance in settling fake tax issues. The NYS Tax Department and IRS will never request personal or financial information by email.

3. Protect your computer – Ensure that your computer is secure when accessing your financial accounts online by looking for “https,” with an “s” after the “http,” in the website address.

4. Use strong passwords – Use a combination of upper- and lower-case letters as well as numbers and symbols when creating a new password. Don’t use your name, birthdate, or common words. Use a different password for each of your accounts.

5. Use secure wireless networks – Always encrypt your wireless network with a strong password. Never access your personal accounts on a public Wi-Fi network.

6. Review bank accounts and statements – Check your credit card and banking statements regularly to spot any suspicious activity.

7. Review credit reports annually – Review each of your credit reports annually to spot any new lines of credit that you didn’t apply for or authorize. This can be a sign that a thief has stolen your identity and opened up a credit card, for example, in your name.

8. Think before you post – The more information and photos you share via social media, including current and past addresses, or names of relatives, can provide scammers possible answers to your security questions or otherwise help them access your accounts.

9. Secure tax documents – Store hard copies of your federal and NYS tax returns in a safe place. Digital copies should also be saved. Shred documents that contain personal information before throwing them away.

10. Review and respond to all NYS Tax Department communications– You should review and respond to all notices sent from the Tax Department. Any unexpected correspondence from the Tax Department can be a potential sign that your identity has been stolen. It’s important that you contact the Tax Department immediately to confirm any liabilities.

If you believe that you’ve been contacted by a cyber criminal attempting a scam, have been the victim of fraud or identity theft, or suspect a tax preparer is engaging in illegal activities, visit the Tax Department’s Report fraud, scams, and identity theft webpage to learn how to report it. The Tax Department takes this type of illegal activity seriously, promptly reviews each compliant, and takes corrective action when appropriate.

If you believe you are victim of identity theft and or your financial information has been compromised, please contact an R&G Brenner professional after your report your situation to the authorities.  We may be able to help you to minimize any potential damage.  Remember, NEVER send W2s, 1099s, tax returns or other private information via email; always use a secure file transfer when sending sensitive documents over the internet.  All R&G Brenner professionals offer free secure file transfer solutions to our clients.

Indian Police Arrest 70 In IRS Calling Scam

Indian Police Take Down IRS Scam Call Center
Indian Police Take Down IRS Scam Call Center

Police in India have arrested at least 70 people involved with impersonating IRS agents at a fake call center in an attempt to defraud U.S. Taxpayers.  Hundreds more are being held for questioning.

The popularity of this scam has grown exponentially as nearly every taxpayer has experienced a call like this first hand, or know a friend or acquaintance that has received calls like this. Over the last 3 years alone, the IRS has received nearly 1 Million complaints of similar low-tech scams which cost taxpayers over $26 Million.  It has been previously reported that these calls have originating from countries like India, Pakistan & Russia:

According to police in Mumbai, the yearlong scam involved running fake call centers which sent voice mail messages telling U.S. nationals to call back because they owed back taxes.

Those who called back and believed the threats would fork out thousands of dollars to “settle” their case, Mumbai police officer Parag Marere said Thursday.

The scam brought in more than $150,000 a day, Marere said without giving a total sum. If the scam netted that amount daily, it would have made almost $55 million in one year.

Some victims were also told to buy gift vouchers from various companies, and hand over the voucher ID numbers which the impostors then used to make purchases, Marere said.

Police said they are likely to file charges against many of the 600 or more people still being questioned on suspicion of running the fake call centers, housed on several stories of a Mumbai office building…

Indian media reports said 70 percent of the scam’s proceeds were retained by the suspects in India, while the rest was paid to collaborators in the U.S.

Indian news broadcaster NDTV reported that one U.S.-based company allegedly collected the victims’ personal information and passed it to the fake call centers.

Here are some tips to avoid being the victim of a phone scam:

  • The IRS rarely if ever initiates calls to taxpayers.  If you owe tax money they will formally notify taxpayers with a mailed letter to the address listed on the tax return
  • The IRS cannot demand payment on the spot; the IRS also offers payment plans
  • The IRS does not request a specific type of payments like gift cards or prepaid debit cards
  • The IRS will never ask for credit card information over the phone

This particular call center was working with U.S. based criminals who provided the taxpayer contact information to this call center.  Protecting your private personal information is the first step in avoiding these types of scams.  NEVER provide personal information over the phone. NEVER e-mail information that contains social security numbers, bank account number, credit card numbers, user names or passwords.  R&G Brenner offers secure file transfer services free-of-charge to all of it’s clients who want a digital solution for sending tax related documents.  All tax professionals who are serious about protecting their clients private tax information—whether independent, franchise or CPA— should offer a similar service.  If you’d like more information about how R&G Brenner protects client data, feel free to contact us at (888) APRIL-15 or by clicking here.

Lastly, if you feel that you are becoming a target for a scam like this, you can report it to the IRS by calling: (800) 366-4484.

Source: ABC27.com

March 15th Corporate Tax Filing Deadline Approaching

March 15th Corporate Deadline Approaches
March 16th Corporate Deadline

The Deadline to file corporate tax returns (forms 1120, 1120A, and 1120S) is Tuesday March 15th, 2016. Most corporate returns are required to be filed electronically therefore they must be sent to the IRS before midnight on the 15th.  If for some reason you are filing a paper corporate tax return, the post mark on the envelope must show 11:59pm or earlier in order to avoid late filing penalties.

If you require more time to file your corporate return, you can request a 6-month extension by filing federal Form 7004 and any corresponding state(s) extensions, however these too must be electronically filed or mailed before the March 16th Deadline.

If you require immediate assistance regarding filing your corporate return(s), contact an R&G Brenner professional before the deadline.

IRS Computer Problems Shut Down Electronic Filing Of Tax Returns

Computer problems have caused the IRS to cease accepting electronically filed tax returns until further notice:

The outage could affect refunds, but the agency said it doesn’t anticipate “major disruptions.”…”The IRS is still assessing the scope of the outage,” the agency said. “At this time, the IRS does not anticipate major refund disruptions; we continue to expect that nine out of 10 taxpayers will receive their refunds within 21 days.”

Source: USA Today

Why So Many Americans Feel Financially Insecure, Even If They’re Not

Why So Many Americans Feel Financially Insecure
Why So Many Americans Feel Financially Insecure

Economic insecurity is the uncertainty that your family faces in the unpredictable future based on your income, resources, and debt. Many families, even those in the middle class, feel financially unstable and insecure, leading to increased stress and anxiety about regular bills and unexpected expenditures. Are they saving enough for retirement? What if Social Security dries up by the time they reach their own retirement and they’re left to fend for themselves? Should they be saving more for their kids’ college funds?

If you’re struggling to pay off debt and make ends meet, you probably do not feel financially stable. Unfortunately, if you are feeling acute financial insecurity, you aren’t alone. The majority of citizens in the United States are experiencing economic anxiety—even those who aren’t, strictly speaking, financially insecure. Even middle class Americans are experiencing this anxiety. To understand why, we’ll need to dig a little deeper.

Reasons for Anxiety

People who identify as middle class do not necessarily do so based on their income. These days, economists argue, being middle class is more of a sociological status, and is based on people’s perceptions of how they look in relation to their parents, neighbors, or colleagues. Today’s middle class families may have more education and belongings than their parents had at the same age, but they don’t feel like they’re any better off.

According to the New York Times, a typical American family today makes less than the typical family did in 2000, just 15 years ago. The median per capita income has stagnated since 2000, while housing, college, and healthcare expenses have increased faster than the rate of inflation. Many Americans are working harder, but not seeing any improvement in their quality of life. This creates a feeling of anxiety and insecurity.

Luxury As the New Standard

Markers of a lifestyle that indicates your family is well-off have changed. Remember when owning a laptop was a luxury? In today’s economy, it’s almost a necessity. What about cell phones? Just a few years ago, a Blackberry made its owner seem and feel important. Today, practically everyone has a smartphone. Things that were once considered luxury goods have become more affordable, but socially that means that they’ve become less associated with luxury and more with ubiquity and necessity. Once, having a cell phone meant you were wealthy; now, phones are much more sophisticated and widely available, but since everyone else has them, they don’t feel as special, don’t signal the same wealth they once did.

A Lack of Resources Felt by All

More Americans feel like they need a safety net to protect their assets. Economic insecurity means that Americans worry about whether Social Security will be there for them when they retire. They worry about losing their jobs or being unable to afford health insurance, or even losing their homes. Unlike so many issues which divide the populace along party lines, Democrats, Republicans and Independents report very similar levels of economic anxiety.

Muddying the issue and increasing the anxiety is the fact that Americans have less in savings than ever before. Most people are carrying a large amount of credit card debt, which creates pressure when paying bills. In a February, 2015 study, 37 percent of Americans have more credit card debt than they have in savings. This increases the feeling of financial insecurity because of the vicious cycle of debt. Not having enough money in savings means that in an emergency, a family might not be able to scrape together the cash needed, such as for unexpected hospital bills or auto repairs after a break-in. Knowing that you’re one unforeseen event away from financial ruin can only make you feel more insecure.

The aftershocks of the Great Recession are still being felt today.  The stock market is at record highs, but global volatility is tamping down what should be an economic boom.  With so many Americans working harder, longer, and later in life  it is easy to see where this anxiety is coming from.

Why Low Oil Prices Are Bad News for State Budgets

Low Oil Prices Aren't Good For Everybody
Low Oil Prices Aren’t Good For Everybody

While many states rely heavily on taxes levied on the oil and gas industry, the falling price of oil in recent months is contributing to the drying-up of much-needed tax revenues. How do states such as Alaska, Texas and other mineral-rich states get creative when they need to supplement their budgets? Here’s a quick look at why low oil prices are bad news for state budgets.

Rainy Day Funds

Sure, you love the low price of gas at the pump when filling up, but not everyone thinks this is great. States like Alaska, Louisiana, Montana, New Mexico, Texas, North Dakota, West Virginia and Wyoming depend on severance taxes levied on oil and gas producers, and with oil prices plunging from $96 a barrel in July 2014 to about $50 a barrel today, these states have no choice but to tap into their rainy day funds, slash spending or raise taxes, according to The Huffington Post.

Each state on this list is affected differently. For example, Texas produces more than 100 million barrels per month of oil—more than anywhere else in the nation—yet only nine percent of its revenues are sourced from severance taxes. This stands in stark contrast to Alaska, which only produces 16 million barrels a month yet derives nearly 80 percent of its revenue from severance taxes.

States’ Responses

The hardest-hit states, such as Alaska, Texas and Montana, have to consider some hard realities in order to offset the reduction in tax revenues. What they could once count on as a given is no longer an option. With Alaska currently experiencing a $3.6 billion gap in its $6.1 billion budget, law makers in the state are proposing a spending cut of between five and eight percent.

There are other options for Alaska, though: it could tap into its Permanent Fund, which contains money from surplus revenues resulting from the development of the state’s invested oil and gas reserves. This fund currently shells out a yearly dividend to eligible Alaska residents. Currently, that fund holds about $50 billion. Stripping the state spending budget only to essential services could help offset the reduced severance taxes coming in, but over the long haul, many decision-makers feel it’s wise to create a more balanced tax structure to handle dips in the availability of severance funds.

North Dakota is another state looking at a cut in severance taxes—from $8 billion in oil revenue to $4 billion. Its reserve fund holds about $1 billion currently, which includes money earmarked for water projects, disaster relief and infrastructure improvements. However, the state can’t dip into this until a 2.5 percent cut has been made to all state agencies. At the federal level, Congress is considering stepping in to raise the gas tax for the first time since 1993, where this tax has remained at 18.4 cents per gallon, according to The Washington Post. However, that is not a certainty and Congress is still debating the issue.

While the states facing this oil and gas revenue shortage are by no means broke, this situation does pose a challenge for them, prompting more creative uses of budgetary resources.  However, these States would be wise to start thinking about contingency plans as low oil prices could become the “new normal”; especially since the push for clean & renewable energy has been reinvigorated as prices drop and climate change becomes harder and harder to deny.

Why Don’t Billionaire Homeowners Pay Property Taxes in New York?

Renters & Not Property Owners Are Paying The Lion's Share of Property Taxes
Renters & Not Property Owners Are Paying The  Lion’s Share of Property Taxes Photo Credit: Chang W. Lee/The New York Times

“If we can find a bunch of billionaires around the world to move here, that would be a godsend,” opined Michael Bloomberg during his tenure as mayor of New York City. “Because that’s where the revenue comes to take care of everybody else.” His dream was that the taxes they paid would provide such an infusion of cash to the municipality that the rising tide would lift all boats and the money could be reinvested into helping those struggling to make ends meet.

It seems that his dream has indeed come true. Higher and higher condo towers are going up each year, with views that are affordable only for the super-wealthy. But there’s a catch in the former mayor’s ideal: tax codes in New York City make it possible for those buying and selling $100 million dollar abodes in the sky to pay next to nothing in property taxes. Here’s how billionaire homeowners in the Big Apple manage to avoid paying property taxes:

It’s All in the Assessment

Part of the reason the billionaires Bloomberg dreamed of attracting aren’t paying the taxes he dreamed would come with them has to do with the way property taxes are assessed in the city. The new, gleaming, glass-covered residential skyscrapers are being assessed at just a fraction of their market value, and buyers are paying only a tiny slice of that fraction in property taxes.

Taxes Based on Location

Property taxes in the city are not based on the sale prices of the units, as happens in most states. Instead, property taxes vary widely depending on a given building’s location within the city. This method of calculating property tax were put into effect over many years in an effort to avoid burdening homeowners with huge property tax bills.

But that plan didn’t take into consideration the effects of gentrification and what happens when property in neighborhoods appreciates in value rapidly. The result is that people who buy property in certain areas of the city pay far less in property taxes than an owner in a different area, where property prices are more stable. Some areas have seen their property values rise so quickly that the only people who can afford to buy are the wealthiest New Yorkers, who will paradoxically pay very little in property taxes.

Exemption 421-a

New York City offers a tax break to new development as an incentive to builders, called the 421-a exemption. The goal was to make new construction more affordable and thus more attractive, creating jobs and bringing in revenue. But the result has been towering residential skyscrapers full of condos going for $90 to $100 million to buyers who will pay just .001 of the average property tax rate.

For example, one penthouse on the 89th and 90th floors in the ultra-sleek One57 building went for more than $100 million. The new owners paid just $17,000 in property taxes, which comes to .017 percent, almost one-hundredth of the tax rate paid nationally by homeowners. This unit isn’t an exception, either, but rather the new norm. According to real estate experts, the owner of the penthouse mentioned is actually being assessed as if the condo cost in the range of $3 to $6 million. But someone is paying those taxes, and in New York, it’s often renters–not-homeowners–who are footing the bill.

This is a odd setup for a city that relies on property taxes for most of its revenue. It’s also a problematic one. The result of the way the current tax code is written is that renters in apartment buildings end up paying, indirectly, most of the property taxes that the wealthy condo owners aren’t paying, shifting the tax burden from those who can most afford to pay to those who often can’t. In effect, low-income renters in the city are subsidizing housing costs for the wealthy.

Property Tax Burden Shifted onto Renters

Someone has to pay the property taxes. Gradually, that “someone” has become the renter. This is because large apartment buildings and the majority of co-ops are considered Class 2 property for tax purposes. All are taxed as apartment buildings that generate income according to a complicated and outmoded formula based on a state law last revised in 1981. The result is the burden of paying property taxes has slowly shifted from people who own property to people who rent; essentially from the rich, to the poor.

Not paying property taxes at the same rate as their lower-income renting counterparts isn’t the only way the wealthy homeowners are benefitting from the new status quo. There is even a proposal in the City Council to create a rebate of $250 on homeowners’ property taxes each year. The idea is to make homeownership affordable for everyone, but the proposal would cost non-homeowners $95 million. Even now, homeowners in the city pay substantially less in property taxes than homeowners in nearby locations like Westchester and Long Island. If this rebate goes into effect, it would shift more of the property tax burden to renters who don’t have the money to buy their own home, exaggerating an already glaring inequity.

The property tax laws in New York City are complicated and outdated. The result is that the rich, who can afford to buy homes in newly prominent neighborhoods, are paying less property tax than people who earn less and don’t own property at all; effectively those that can afford homes are being subsidized by those that cannot. This situation is complicated, but it is pretty clear is that NYC property tax reform is needed.  This is not about “shifting the burden” to the rich, but simply  everyone paying their fair share.  Property taxes should be paid by those who own property, not those who do not.