IRS NEWS FOR PAYROLL AND HUMAN RESOURCES
►UPCOMING WEB CONFERENCES
IRS Web Conference – Understanding the Basics of Virtual Currency – is Now Available on Demand.
IRS Web Conference – Understanding the Basics of the Dark Web – is Now Available on Demand.
Please check Webinars for Small Businesses for upcoming webinars.
IRS statement on Form W-4
• Following feedback from the payroll and tax communities, the Treasury Department and the IRS will incorporate important changes into a new version of the Form W-4, Employee’s Withholding Allowance Certificate, for 2020. The 2019 version of the Form W-4 will be similar to the current 2018 version. A new draft version of the W-4 for 2019 will be available in the coming weeks.
• The IRS will continue working closely with the payroll and the tax community as it makes additional changes to the Form W-4 for use in 2020. The new version will help employees improve withholding accuracy, and fully reflect changes included in the Tax Cuts and Jobs Act.
New Tax Reform Changes Website Explains What Is Changing and What Is Not
• The mobile-friendly Tax Reform Changes website created by the Taxpayer Advocate shows how the new Tax Cuts and Jobs Act law may change future tax filings and helps everyone plan for these changes.
• It even includes line by line explanations and scenarios to describe how the new changes (that took effect for 2018) will be reflected on individual tax returns filed in early 2019. Plus, it’s designed so everyone can also easily see what items have and have not been changed.
• Sign up for notifications, using the purple subscribe button. You will then receive email alerts when any new information is added to be sure you stay up-to-date.
• IRS.gov remains the official Tax Reform Guidance authority, however TAS’s site has accurate descriptions in plain language for basic understanding of what has and has not changed under the law.
Retirees: Avoid a surprise tax bill; get enough tax taken out of pension payments; IRS Withholding Calculator can help
• With tax reform bringing major changes for the year ahead, the IRS is urging retirees to make sure they are paying in enough tax during the year by using the Withholding Calculator, available on IRS.gov.
Avoid penalty for underpayment of taxes; IRS says check withholding, make estimated payments
• With nearly 10 million U.S. taxpayers facing a penalty for underpayment of estimated tax last year, the IRS is urging taxpayers to plan ahead, understand their options and avoid the penalty when they file in early 2019.
• Those who are self-employed or have other income, such as interest, dividends, self-employment, capital gains, prizes and awards or have too little tax withheld from wages may need to make estimated or additional tax payments. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax.
2018 employer reimbursements for employees’ 2017 moves are generally tax-free
• Employer payments or reimbursements in 2018 for employees’ moving expenses incurred prior to 2018 are excluded from the employee’s wages for income and employment tax purposes.
• 2017 Tax Cuts and Jobs Act (TCJA) suspended the exclusion from income for moving expenses reimbursed or paid by an employer for most employees starting in 2018, making these amounts taxable, except for amounts for active-duty members of the U.S. Armed Forces whose moves relate to a military-ordered permanent change of station.
• Under Notice 2018-75, reimbursements an employer pays to an employee in 2018 for qualified moving expenses incurred in a prior year are not subject to federal income or employment taxes. The same is true if the employer pays a moving company in 2018 for qualified moving services provided to an employee prior to 2018.
Tax reform affects ABLE accounts, saver’s credit, 529 rollovers
• The Tax Cuts and Jobs Act made several changes to ABLE accounts. ABLE accounts were created by The Achieving a Better Life Experience Act of 2014. They are authorized tax-advantaged section 529A accounts to help disabled people pay for qualified disability-related expenses.
Organizations around the country looking for volunteers to help taxpayers
• The IRS and its community partners are looking for people around the country to become IRS-certified volunteers at their free tax preparation sites. Volunteers can start now to join one of these programs that offer invaluable help to America’s taxpayers.
IRS warns of scams related to natural disasters
• In the wake of Hurricane Florence, the IRS is reminding taxpayers that criminals and scammers try to take advantage of the generosity of taxpayers who want to help victims of major disasters.
Facts to help taxpayers understand Individual Retirement Arrangements
• Individual Retirement Arrangements – better known simply as IRAs – are accounts into which someone can deposit money to provide financial security when they retire.
• The article explains some terms and definitions related to IRAs to help people learn more about how the arrangements work.
►New on IRS.gov
New forms, instructions and pubs on IRS.gov
• Form W-2, Wage and Tax Statement (Info Copy Only)
• Inst W-2 and W-3, Instructions for Forms W-2 and W-3, Wage and Tax Statement and Transmittal of Wage and Tax Statements
• Pub 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G
• Pub 1494, Table for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income (Forms 668-W(ACS), 668-W(c)(DO) and 668-W(ICS))
• Pub 1693, SSA/IRS Reporter Newsletter – Summer 2018
►IDENTITY THEFT / DATA THEFT / SCAM ALERTS
►EMPLOYERS AND BUSINESS OWNERS:
Filing extensions for Forms W-2 and 1099-MISC are not automatically approved
• Treasury Decision 9838, Extension of Time to File Certain Information Returns (found in Internal Revenue Bulletin 2018-34), is the final ruling and clarifies that extension requests for Forms W-2 and 1099-MISC will not be automatically approved.
• Requests for extensions must meet specified criteria and be requested on Form 8809, Application for Extension of Time to File Information Returns, before the January 31 deadline to file. This will deter identity theft and refund fraud. Requests for extensions of the filing deadline have no effect on the deadline to furnish forms to recipients.
• The IRS will create a revised Form 8809 for the 2019 filing season that will provide checkboxes for employers to show the reasons they’re asking for an extension.
Large employers can now e-file their employment tax returns
• Employers who meet the definition of “large employers” now have the option to e-file their employment tax returns (e.g., Forms 940, 941) without the need for a third party.
• Simply use Form 8453-EMP, Employment Tax Declaration for an IRS E-file Return, for the signature, and electronically attach it to the employment tax return. Then e-file it using the same software used to electronically file other tax returns.
• This option is available now, so large employers may use it to e-file their third quarter employment tax returns due in October.
• Find more information and the definition of a large employers in section 5 of Pub 4163, Modernized e-File (MeF) Information for Authorized IRS e-File Providers for Business Returns.
New employer tax credit for paid family and medical leave available for 2018 and 2019
• Eligible employers who provide paid family and medical leave to their employees may qualify for a new business credit for tax years 2018 and 2019.
• In addition, eligible employers who set up qualifying paid family leave programs or amend existing programs by Dec. 31, 2018, will be eligible to claim the employer credit for paid family and medical leave, retroactive to the beginning of the employer’s 2018 tax year, for qualifying leave already provided.
• In Notice 2018-71 the IRS provided detailed guidance on the new credit in a question and answer format. The credit was enacted by the 2017 Tax Cuts and Jobs Act (TCJA).
►THE BEST OF IRS.GOV
• What You Need to Verify Your Identity
• IRS online services include several applications that you can access with your same username and password. For example, your username and password will be the same across any of these applications:
• For more information, please review Secure Access: How to Register for Certain Online Self-Help Tools.