Here’s how tax reform affects taxpayers who claim the child tax credit

Many people claim the child tax credit to help offset the cost of raising children. Tax reform legislation made changes to that credit for 2018 and later. Here are some important things for taxpayers to know.

Credit amount. The new law increases the child tax credit from $1,000 to $2,000. Eligibility factors for the credit have not changed. As in past years, a taxpayer can claim the credit if all of these apply:

  • the child was younger than 17 at the end of the tax year
  • the taxpayer claims the child as a dependent
  • the child lives with the taxpayer for at least six months of the year

Credit refunds. The credit is refundable, now up to $1,400. If a taxpayer doesn’t owe any tax before claiming the credit, they will receive up to $1,400 as part of their tax refund.

Earned income threshold. The income threshold to claim the credit has been lowered to $2,500 per family. This means a family must earn a minimum of $2,500 to claim the credit.

Phaseout. The income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly. This means that more families with children younger than 17 qualify for the larger credit.

New credit for other dependents. Dependents who can’t be claimed for the child tax credit may still qualify for the new credit for other dependents.  This is a non-refundable credit of up to $500 per qualifying person. These dependents may also be dependent children who are age 17 or older at the end of the tax year. It also includes parents or other qualifying relatives supported by the taxpayer.

 

*This message was distributed by IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov.

Ten things for taxpayers to think about when choosing a tax preparer

It’s the time of the year when many taxpayers choose a tax preparer to help file a tax return. These taxpayers should choose their tax return preparer wisely.  This is because taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return.

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Can your tax clients claim dependents who reside in Mexico?

Original article written by LatinoTaxPro.org

The Tax Cuts & Jobs Act has created massive changes across the Internal Revenue Code. One of the most impactful of these changes is the reduction of the personal exemption to $0. In previous years, the personal exemption reduced taxable income which in turn reduced the amount of tax owed. As more personal exemptions are made, less taxable income is generated, and thus less tax is paid. An exemption was allowed for any qualifying dependent, including those who lived in Mexico. Now that the exemption amount is $0 however, can you still claim dependents in Mexico?

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IRS kicks off 2019 tax-filing season as tax agency reopens; Use IRS.gov to avoid phone delays

WASHINGTON ― The Internal Revenue Service successfully opened the 2019 tax-filing season today as the agency started accepting and processing federal tax returns for tax year 2018. Despite the major tax law changes made by the Tax Cuts and Jobs Act, the IRS was able to open this year’s tax-filing season one day earlier than the 2018 tax-filing season.

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IRS confirms tax filing season to begin January 28

WASHINGTON ― Despite the government shutdown, the Internal Revenue Service today confirmed that it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled.
 
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig.
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Taxpayers can now instantly get tax info on Instagram

Taxpayers can now get tax tips and helpful news from the IRS on Instagram. The agency just debuted it’s official Instagram account, IRSNews, which users can access at www.instagram.com/irsnews or on their smartphone using the Instagram app.

Last year’s tax reform law brought many tax law changes that will affect virtually every taxpayer. The IRS Instagram account will share taxpayer-friendly information to help people better understand these changes.

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Here’s how tax preparers can protect themselves and their clients

Cybercriminals are stepping up their attacks on tax professionals. Because of this, the IRS urges tax preparers to take steps to protect client data and their computer networks from these threats.

Thieves search for client data so they can create a fraudulent tax return that looks legit and might bypass IRS filters. They also impersonate tax professionals, using stolen Electronic Filing Identification Numbers, Preparer Tax Identification Numbers, and Centralized Authorization File numbers.

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Tips for tax preparers on how to create a data security plan

IRS Tax Tip 2018-151, September 27, 2018

The IRS reminds tax preparers that protecting taxpayer information isn’t just good for their clients and good for business – it’s also the law. The Federal Trade Commission’s Safeguards Rule requires that tax preparers create and enact security plans.

Although the IRS and its partners in the Security Summit are making progress against tax-related identity theft, cybercriminals continue to evolve. In fact, data thefts at tax professionals’ offices are on the rise. Thieves use stolen data from tax preparers to create fraudulent returns that are harder to detect.

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Strong passwords help protect accounts against cybercriminals

 

The IRS urges everyone with any type of online account to review new, stronger standards to protect their passwords. Doing so will help protect against savvy cybercriminals who wants to access people’s accounts and steal their identities.

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IRS.gov has many resources for tax preparers

IRS.gov has many resources for tax preparers

As 2018 comes to a close, tax professionals around the country are getting ready for the 2019 tax filing season. Many of them will have questions, and many of these questions can be answered on IRS.gov. Here is a rundown of the tools and resources available on IRS.gov that will help tax preparers be prepared for 2019:

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