Category Archives: Personal Taxes

Articles and tips related to personal taxes by James E. George, CPA

New Tax Laws for 2019!

New Tax Laws for 2019!

This week I attended a two-day seminar on the new tax laws taking effect for 2019. The sheer number of changes is a little overwhelming. There are new reporting requirements for anyone who files Head of Household status. There is also an expanded due diligence checklist for any taxpayer that claims college expenses, the child tax credit, or the earned income credit. What was touted as tax simplification appears to be anything but!

Itemized deductions for employee business expenses such as meals, travel, and cell phones have been eliminated, as well as the deduction for brokerage account management fees. The credits for buying a hybrid or electric vehicle, as well as the credits for energy proofing your home, have also been eliminated.

For parents who are divorced or separated, the IRS is increasing the audit frequency of claimed dependents. Too many children have been claimed by the wrong parent. The rules are complex, and the IRS has issued guidance that can either be obtained from their website or by consulting with a local tax professional.

For small businesses, the IRS is requiring more documentation for eligible expenses. It is now more important than ever to maintain accurate and detailed records for all business expenses, including auto usage.

Many of the forms have undergone design changes. There are new lines on existing forms, as well as several new forms that taxpayers may need to complete. This year’s tax law seminar manual was over 1,000 pages!

Who said they are making tax preparation simpler?

The IRS does not care what your Divorce Decree says!

The IRS does not care what your Divorce Decree says!

Every year at tax time, we encounter a variety of situations relating to divorced spouses claiming their children. In prior years, there were various ways used to justify who claimed which child. Sometimes the spouses agreed who claimed who and sometimes they didn’t. For years, the state court systems would approve divorce agreements that specified… Continue Reading

Tax-Related Telephone Scams

Tax-Related Telephone Scams

This week our area has been hit with an increased number of tax-related scam telephone calls. They are starting to sound much more realistic than similar scams in prior years. Usually the caller will identify themselves as a member of an enforcement division of either the IRS or Maryland State Police. They will inform you… Continue Reading

Many New Tax Law Changes are Just Around the Corner!

Many New Tax Law Changes are Just Around the Corner!

Last week I spent three fantastic days at the IRS Nationwide Tax Forum! Many new tax laws and changes to the tax forms are slated for the next filing season. The amount of new information, procedural changes and tax form modifications discussed was at times, overwhelming. The increasing number and types of new tax scams… Continue Reading

Casual gamblers may lose big under new tax code

Casual gamblers may lose big under new tax code

The new tax law will cause many casual gamblers to incur bigger losses than before! Prior to 2018 you could deduct your losses up to the amount of your winnings. You did this by claiming your losses as itemized deductions. The new tax law for 2018 doubles the standard deduction. This will cause many taxpayers… Continue Reading

New Tax Laws and your Home Equity Loan or Credit Line

New Tax Laws and your Home Equity Loan or Credit Line

The 2018 Tax Cuts and Jobs Act limits the deduction for home equity loans and home equity credit lines. The media has done a poor job of informing the public about this issue. Many of the newspaper and radio accounts have indicated there is no provision for deducting interest paid on equity loans and credit… Continue Reading

New Tax Warning to Employees

New Tax Warning to Employees

Employees beware! The new withholding tax tables that have been published may cause your employers to under withhold the federal tax from your paychecks. If your employer utilizes these new tables, they are doing nothing wrong. However, the tables incorporate the tax cuts under the new law by lowering the withholding amounts. While this gives… Continue Reading

Health Insurance is Still Required!

Health Insurance is Still Required!

Many clients I have spoken with since tax season have incorrectly assumed the requirement to have health insurance coverage has been repealed. This is only partially correct. The requirement to carry health insurance on one’s self and every dependent in their household has been repealed, but not until 2019! For 2018, you still must have… Continue Reading

Employees’ Business Expenses Must be Documented

Employees’ Business Expenses Must be Documented

A deduction is available for money an employee spends to perform their duties in the course of their employment if they are unreimbursed by their employer. This includes mileage, licenses, union dues, education and out of pocket expenses. The expenses must be incurred as a condition of employment or utilized in the performance of the… Continue Reading

Beware of Tax-Related Identity Theft Scams

Beware of Tax-Related Identity Theft Scams

Deceitful communications come via phone, email, postal mail, and sometimes even a knock on your door. It’s important to know that the IRS does occasionally contact taxpayers, but when they do, it’s most often by mail. Sometimes the IRS needs to verify a taxpayer’s identity and will do so by sending a Letter 5071C. This… Continue Reading

How Do I Handle My Mother’s Estate?

QUESTION: Dear Taxman – I am the administrator of my Mother’s estate. All she owned at the time of her death was her car, her house and a few investments which were all sold at a loss. Am I required to file an estate income tax return? ANSWER: Dear Reader – An estate tax return, form… Continue Reading

Claiming Dependents

QUESTION: Dear Taxman – My Daughter graduated from college in May of this year. She started working in September and expects to make about eleven thousand dollars this year. Can we still claim her as a dependent for this year? ANSWER: Dear Reader: To claim her as a dependent in any year, she must have been a… Continue Reading

Donations to Non-Profits

QUESTION: Dear Taxman – I donate money to different non-profit organizations. Every year my Tax Preparer deducts some but not all of them. I thought donations to all non-profit groups were tax deducible. ANSWER: Dear Reader – Non-profit groups don’t pay income taxes on money you give them. That does not mean you get a… Continue Reading

Charitable Deductions

QUESTION: Dear Taxman – Every week I place cash in the collection plate at church. I recently heard I cannot deduct it since I have no banking record. Is that true? ANSWER: Dear Reader – As of August 16, 2006 a receipt from the donee organization or a bank record such as a cancelled check… Continue Reading

How Long Do I Keep Tax Records?

QUESTION: Dear Taxman – How long am I required to keep my tax records? ANSWER: Dear Reader – You should save all your income tax records for the current year and six previous years. Certain tax records like your income tax returns should be kept permanently. Property settlement transaction documents should be kept for four… Continue Reading