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Tax Alert

There are new rules regarding sales tax collection and remittance for out of state sales. Up until June 21, 2018, registration is required only of remote sellers that have physical presence in a state.

On that date the U.S. Supreme Court decided in the South Dakota v. Wayfair, Inc. case that a new type of nexus was needed. Retailers with no physical presence in the state that are making sales of tangible personal property into a state may be required to collect and remit the states Sales Tax.

Remote sellers with no physical presence in a state that meet either of the following thresholds are likely required to register with that state’s tax department and begin collecting and remitting that state’s Sales Tax.

 

  • the retailer’s cumulative gross receipts from sales of tangible personal property to purchasers in the state are $100,000 or more; or
  • the retailer enters into 200 or more separate transactions for the sale of tangible personal property to purchasers in the state

Since each state will or has issued their own regulations regarding this decision, please contact us if you believe that this decision affects your business.

The IRS “Paycheck Checkup”

Launching a special week of activities the IRS today continued its effort to encourage taxpayers to do a “paycheck checkup” to make sure they have the right amount of tax taken out of their paychecks for their personal situation.

To help taxpayers understand the implications of the Tax Cuts and Jobs Act, the IRS unveiled several new features to help people navigate the issues affecting withholding in their paychecks. The effort includes a new series of plain language Tax tips, a Youtube video series and other special efforts to help people understand the importance of checking their withholding as soon as possible.

https://www.irs.gov/newsroom/irs-encourages-paycheck-checkup-for-taxpayers-to-check-their-withholding-special-week-focuses-on-changes

ALERT FROM WASHINGTON

The IRS and partners in the Security Summit effort on January 17 warned that the upcoming tax season could bring a “new surge” in the Form W-2 phishing scam.

The Form W-2 scam has emerged as one of the most dangerous phishing emails in the tax community. The scam involves cyber-criminals tricking payroll personnel or people with access to payroll information into disclosing sensitive information for entire workforces.

Businesses, public schools, universities, hospitals tribal governments and charities have all been targeted. Reports of the scam first emerged in 2016 when approximately 100 were received by the IRS. A year later, the number of reports hit 900 with more than 200 employers being victimized.

“By alerting employers now, the IRS and its partners in the Security Summit effort hope to limit the success of this scam in 2018”, the agency said, adding that “IRS last year also created a new process by which employers should report these scams.”

For important details and a link to report the phishing scam to IRS, go to:

https://www.irs.gov/privacy-disclosure/report-phishing

New York State Legislative Changes

New York – Sales & Use Taxes

Tax exemption for New York alcohol tastings.

L.2017 , A6945 (c. 418), effective 03/01/2018, provides an exemption from sales and use tax for tastings (beer, cider, or liquor) held by a licensed brewery, cider producer, farm cidery, distillery or farm distillery. The bill was enacted to create uniformity across the alcohol industry where only wineries were also permitted a sales tax exemption for tastings the wineries charged a fee for.

New York- Personal Income Tax

Discharged student loan deduction.

L.2017, S4491 (c.456), effective 12/13/2017, grants a personal income tax deduction for the amount of a student loan that is discharged due to the death or a permanent and total disability of the borrower. The law applies to the 2017 tax year and to subsequent taxable years.

New York- Personal Income Tax

Deduction for first time home buyers’ deposits into savings account.

L.2017, A5616 (c. 472), applicable to taxable years commencing on or after 01/01/2018, establishes the New York state first home savings program, which authorizes first time home buyers to establish savings accounts to purchase a home; and provides a personal income tax deduction of up to $5,000 ($10,000 if married and filing jointly), for deposits into a New York State First Home Savings account.

Stock Market Worries

As you all most likely are aware of, we have seen a major correction in all of the major stock indices.

At this time we believe that investors should keep a cool head and review their portfolio.

If you would like to discuss your concerns and your portfolio with us please feel free to contact us.

For more information: (click here to read more)

IMPORTANT: EMPLOYERS BEWARE!!

Acting Deputy Director of Immigration and Customs Enforcement (ICE) Thomas D. Homan recently announced that the agency (ICE) will quadruple the number of Form I-9 on-site worksite inspections in the coming year.

If an employer receives a Notice of Inspection, ICE will request their employee records. Most importantly their Forms I-9 for each employee must be in order and remitted to ICE within three days. Failure to do so, including minor paperwork mistakes, can result in penalties. The Form I-9 is used by the The United States Citizenship and Immigration Services (USCIS) to verify the identity of individuals hired for employment in the United States. All employers in the United States are tasked with making sure their new hires have completed the document on or before the employees first day of work.

All businesses in the United States with employees hired after November 6, 1986, are responsible for ensuring that newly hired employees complete a Form I-9, regardless of citizenship.

Effective September 18, 2017, employers must begin using the revised Form I-9 (dated 7/17/17) for all newly hired employees; any previous version of the I-9 is no longer considered valid, however it is not necessary for employers to request current employees to provide a new Form I-9.

The Importance of valid Forms I-9 are that:

  • By Signing the Form I-9 and providing acceptable documentation ( as noted on the From I-9 List of Acceptable Documents), an employee confirms his or her identity and that he or she is authorized to be employed in the United States. He or she presents government-issued identification to the employer, to prove his or her identity and eligibility to legally work.
  • Upon presentation and verification of the acceptable document(s), the employer signs the Form I-9 attesting to the fact that the documentation appears genuine, and retains a copy of the Form I-9. Employers are required to accept whatever forms of identification prospective employees present, provided they are on the list of acceptable documents and are mandated to receive certain documents on the list ( such as a driver’s license and Social Security card).

We feel it is imperative for all of our U.S.- based employers to comply with the most recent standard and requirements for employment verification. Employers not compliant with the current Form I-9 paperwork process will be subject to civil and criminal fines ranging from $216 to $2,156 per form.

Upcoming Tax Dates & More!

TAX DATES : January 31

Businesses provide Forms W-2 and most 1099s to employees and other payees.

File Forms W-2 and 1099-Misc Reporting non employee compensation in box 7 with the SSA and IRS, respectively.

Employers file form 941 for fourth quarter or For 944 for 2017.

Employers file form 940 for 2017

Farm Employers file Form 943 for 2017.

File Form 945 to report income tax withheld for 2017 on all non payroll items, including backup
withholding and withholding on pensions, annuities, IRAs, and gambling winnings.

Note: Forms 940, 941, 943, 944, and 945 are each due February 12 if respective taxes are deposited in full and on time.

Applicable large employers (ALEs) provide Form 1095-C to employees; all other providers provide Form 1095-B to covered individuals.

SOCIAL SECURITY TAXABLE WAGE BASE FOR 2018

On October 13, 2017, the Social Security Administration (SSA) announced that the maximum earnings subject to the social security component of the FICA tax would increase from $127,200 to $128,700 for 2018.

Please contact us if you have any questions about the information in this article.

 

New York States Paid Family Leave Program

Starting January 1, 2018, the New York State Paid Family Leave Program will provide New Yorkers job-protected, paid leave to bond with a new child, care for a loved one with a serious health condition or to help relieve family pressures when someone is called to active military service.

 

This premium for this insurance will be paid by employees rather than employers and will be withheld through payroll withholding with a maximum of 1.65$ per week.

For Employees:

Paid Family Leave starts January 1, 2018 and phases in over four years:

2018: 8 weeks 2019-2020: 10 weeks 2021: 12 weeks

 

General rule of thumb: Employees covered by DBL (NY’s statutory disability insurance) now you will automatically get PFL starting next year.

Here’s what it takes to be eligible to go out on paid leave:

You must make it through what’s called a qualification period.

  • If you work 20 or more hours per week, you must have been employed at least 26 consecutive weeks at your current employer.
  • If you work less than 20 hours a week, you must have completed at least 175 work days at your current employer.
  • If you change jobs your time worked at the previous employer does not count. In other words you start over with a new qualification period.
  • Time out on DBL (statutory disability insurance) does not count towards your qualification period.

 

Qualified types of care include: Physical care, emotional support, visitation, assistance in treatment, transportation, arranging for a change in care, assistance with essential daily living matters, personal attendant services, traveling to pick up medication.

 

For Employers:

 

As of July 1, 2017 you can begin withholding premiums of up to $1.65/week and your current NY Statutory Disability Insurance Policy will automatically include coverage beginning on January 1, 2018.

 

Questions? Check the website here : ny.gov/programs/new-york-state-paid-family-leave

New IRS & NYS Requirements

In order to reign in tax fraud new procedures have been imposed on taxpayers and tax professionals. Please understand that the CPA community was informed late in the process nor did they participate in the drafting of these new procedures. They are:

– IRS requires certain questions be answered in order to receive the following tax credits: Earned income credit, Child tax credits and education credits.

– New York State now requires authentication of the taxpayer by providing their drivers license’s document number, identification number, issuance date, expiration, and state of issuance or a state identification card if they do not have a valid drivers license.