Health Savings Accounts 

Annual contribution limitation. For the calendar year 2019, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $2,250. 

For the same calendar year, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $4,500.

There is an additional contribution of $1,000 for people over 55-year-olds.

Please consult the IRS or your tax professional for more information and applicability. 

Source: IRS.gov

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How long should a Taxpayer keep their tax records and any other related documents?

The general answer is.

It may depend on the action, expense, or event or the type of document and/or records. 

As a general rule, a taxpayer (TP) must keep records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out.

The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax. The information below reflects the periods of limitations that apply to income tax returns. 

Caveats: Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.   Keeping copies of your filed tax returns help you in preparing future tax returns and making computations if you file an amended return.

Period of Limitations that apply to income tax returns:

1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
5. Keep records indefinitely if you do not file a return.
6. Keep records indefinitely if you file a fraudulent return.
7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

What about tax records connected to a property?

Generally, keep records relating to property until the period of limitations expires for the year in which you dispose of the property. You must keep these records to figure any depreciation, amortization, or depletion deduction and to figure the gain or loss when you sell or otherwise dispose of the property.

If you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up, increased by any money you paid. You must keep the records on the old property, as well as on the new property until the period of limitations expires for the year in which you dispose of the new property.  Example: Your residence.

What should I do with my records for nontax purposes? (e.g., your insurance company, creditors, financial planning, etc.)

After they are no longer needed for tax purposes, you may need them for other purposes.  When in doubt, consult your tax advisor CPA.

Source IRS.gov

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Taxpayers may consider paying your taxes electronically or by phone.

The IRS suggests EFTPS; it claims the following: The system is secure, convenient, and improve accuracy.

What is the EFTPS?

• It is a government website that allows register users to make federal tax payments electronically.
• Every user must have a secure Internet browser (e.g., Microsoft Explorer.) with 128-bit encryption in order to access the site. 
• To log on, an enrolled user must be authenticated with three pieces of unique information: Taxpayer Identification Number (EIN or SSN), EFTPS® Personal Identification Number (PIN) and an Internet Password. The combination of these three pieces of identification adds to the security of the site and the privacy of taxpayer data.
• The IRS claims the system is available 24/7.

Some of the available features

• You are able to keep track of your payments by opting in for email notifications when you enroll or update your enrollment for EFTPS. An email notification you will receive will contain the confirmation number you receive at the end of a payment transaction. 
• Businesses and Individuals can schedule payments up to 365 days in advance. 
• Scheduled payments can be changed or canceled up to two business days in advance of the scheduled payment date.
• You can use the system to make all your federal tax payments, including income, employment, estimated and excise taxes.
• You can check up to 16 months of your payment history online or by calling Customer Service.
•  Using your bank account, you submit payment instructions to move funds to the Treasury's account for payment of your federal taxes. Funds will not move from your account until the date you indicate. 
• You will receive an immediate acknowledgment of your payment instructions, and your bank statement will confirm the payment was made. 

Word of caution: You will only receive an email from EFTPS if you've requested the service.

To enroll in the government payment system

To enroll, or for more information on enrollment, visit EFTPS® or call EFTPS® 

Customer Service to request an enrollment form:

1-800-555-4477 

1-877-333-8292 (Federal Agencies)

1-800-733-4829 (TDD Hearing-Impaired)

1-800-244-4829 (Español)

Source: IRS.gov

Last updated by the IRS was Nov 19, 2018, as of Feb. 6, 2019

Trump Calls For Review Of Rule Requiring RMDs At 70 1/2

Trump Calls For Review Of Rule Requiring RMDs At 70 1/2: His executive order may lead to money staying longer in tax-deferred retirement accounts.

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Trump Calls For Review Of Rule Requiring RMDs At 70 1/2

Trump Calls For Review Of Rule Requiring RMDs At 70 1/2: His executive order may lead to money staying longer in tax-deferred retirement accounts.

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The Right to a Fair and Just Tax System: 

Some of the taxpayers rights, are:

• Taxpayers have the right to expect the tax system to consider facts and circumstances...
• Taxpayers can receive assistance from the Taxpayer Advocate Service...
• Taxpayers who cannot pay their tax debt in full and meet certain conditions can arrange a payment plan with the IRS....
• Taxpayers can submit an offer in compromise asking the IRS to settle their tax debt...
• The IRS cannot seize all of someone’s wages to collect their unpaid tax...
• The IRS has the authority to decrease an excessive unpaid portion...

Source: IRS.gov

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What could happen to residents of Puerto Rico and the U.S. Virgin Islands who evacuated or couldn’t return because of Hurricane Irma or Hurricane Maria, for tax filing and reporting purposes?

Most of such individuals may lose their status as “bona fide residents” of Puerto Rico or the U.S. Virgin Islands for tax filing and reporting purposes.   Under the old rules (Notice 2017-56), the rules say that if you are absent for an extended period of 14 days, you loose the "bona fide resident" (of the US territory status.)

Notice 2018-19 further extends the usual 14-day absence period to 117 days, beginning September 6, 2017 and ending May 31, 2018, for the presence test for residency under the tax rules. 

Source IRS.gov -Notice 2018-19

2018 Tax Filing Season Begins Jan 29, 2018

Tax Filing begins Jan 29, 2019

According to the IRS, the nation’s tax season will begin Monday, Jan. 28, 2019.  

Taxpayers Claiming Earned Income Tax Credits (EITC) and Addtional Child Tax Credits (ACTC).

As the Internal Revenue Service begins releasing refunds for taxpayers who claimed the EITC/ACTC sometimes in the middle of February of this year. That is if they chose direct deposit and there are no other issues with the tax return.

The nation’s tax deadline will be April 15 (Monday) this year.) 

Paper tax returns will be process later in the year. The IRS strongly encourages people to file their tax returns electronically for faster refunds. Even though the IRS issues most refunds in less than 21 days, it’s possible for refunds to take longer. Taxpayers should keep in mind that “Where’s My Refund?” is updated once daily, usually overnight, so checking more often will not produce different results.

When my Refund will arrive?

Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund.  

• Can Taxpayers check their refund status online?  Yes.  The Where's My Refund? ‎tool on IRS.gov and the IRS2Go phone app will be updated with projected deposit dates for early EITC and ACTC refund filers. 
• Where’s My Refund? remains the best way to check the status of a refund.

Can I go online to review my account?

Taxpayers can go to IRS.gov/account to securely access information about their federal tax account. They can view the amount they owe, pay online or set up an online payment agreement; access their tax records online; review the past 18 months of payment history; and view key tax return information for the current year as filed. 

Visit IRS.gov/secureaccess to review the required identity authentication process.

Source IRS>GOV

Updated 2/6/19

For a tax professional...modesto.matheu@gmail.com

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Tax Withholding on 2018 as a result of the tax changes:

The IRS is working to give taxpayer guidance in their implementation of the tax reform bill recently signed into law.  Guidance could come about sometime this month.  Little to none action from taxpayers on the current W-4 forms already filed earlier in the year. 

Due to the new 2018 withholding guidelines, taxpayers will begin to see changes in their paychecks as early as February.  

Source: IRS.gov

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