Valley Tax Advisors LLC

The IRS has released an updated withholding calculator in conjunction with a new version of Form W4. The IRS had previously updated withholding tables that reflect the changes made by the Tax Cuts and Jobs Act; however many taxpayers are affected by the new law in ways that cannot be accounted for in the new withholding tables. The IRS has specifically encouraged taxpayers with more complicated financial situations to check their withholding, including: . . . 2-income fam...ilies. . . . People with two or more jobs at the same time or who only work for part of the year. . . . People with children who claim credits such as the Child Tax Credit. . . . People who itemized deductions in 2017. . . . People with high incomes and more complex tax returns. See more

IMPORTANT LEGISLATIVE TAX CHANGE ALERT Please note that If these retroactive extenders affect your tax return and we have already completed your filings, we will be contacting you and preparing the appropriate amendment so that you may take advantage of these legislative changes. 'Congress is considering a two-year budget deal that would, among other things, change the tax code for 2017. Since the close of 2016, the fate of several expired tax extendersa slew of temporary..., constantly expiring tax breaks for individuals and businesseshas been up in the air. Unfortunately, the 2017 tax reform effort did not include a review of these expired provisions. But now, in the second month of 2018, Congress is revisiting the issue to extend back in time incentives for renewable energy, tax breaks for homeowners, and several miscellaneous provisions for businesses. The following individual provisions would be retroactively extended to 2017 once the Bipartisan Budget Act of 2018 is signed: Extension of exclusion from gross income of discharge of qualified principal residence indebtedness. Extension of mortgage insurance premiums treated as qualified residence interest. Extension of above-the-line deduction for qualified tuition and related expenses.' -Erica York, The Tax Foundation

For our NJ filers - As was the case last year, the refunds requested on 2017 NJ-1040s will not begin to be issued until March 1st regardless of when you actually file your return. Otherwise, NJ expects to process NJ-1040s and get refunds to NJ taxpayers within 3-4 weeks.

The IRS has announced several key dates for the 2018 tax filing season. -The IRS will begin accepting returns on January 29, 2018. -People are strongly encouraged to file their tax returns electronically. Although the IRS will begin accepting both electronic and paper tax returns Jan. 29, paper returns will begin processing later in mid-February as system updates continue.... -By law, the IRS cannot issue refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) before mid-February. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts starting on February 27, 2018, if they chose direct deposit and there are no other issues with the return. -The IRS still anticipates issuing more than nine out of 10 refunds in less than 21 days. (from IRS Issue Number: IR-2018-1)

It's an exciting time at Valley Tax Advisors! By now you know our office is moving a short distance to Bethlehem. Our official move is Thursday, January 11 and Friday, Janaury 12, leaving us a bit "unplugged" from you during this time. While we will have limited access to email and voicemail, please feel free to contact us and we will reach out as soon as possible. We thank you in advance for your patience and support during this time and look forward to sharing our new office with you!

To our clients and friends: On December 22, 2017, a federal tax reform measure, Tax Cuts & Jobs Act, was signed into law. Arguably the most sweeping rewrite to the Internal Revenue Code since 1986, all taxpayers will feel its impact, both positive and negative, and despite recent public pronouncements, it is anything but tax simplification. Most provisions that affect individuals are not permanent but expire after 2025. ... Click the link below to review the most significant changes affecting individuals with respect to these 570 pages of text. In early January 2018, we plan to issue a bulletin that addresses the business aspects of this bill. Since this new tax law is only a few days old, it will take several weeks for our technology to be updated so that we can assist our clients with calculating its 2018 tax impact, but rest assured that we will keep you posted.

The Internal Revenue Service has released the 2018 optional standard mileage rates that taxpayers can use to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2018, the standard mileage rates will be 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.... 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017. 14 cents per mile driven in service of charitable organizations.

With the potential for major tax changes looming on the horizon, here are a few last-minute strategies taxpayers can implement to potentially save on their 2017 tax bill. -Taxpayers who make estimated tax payments have until January 15 to pay their fourth quarter 2017 taxes, but with this deduction being either eliminated or limited, you could save more by making that final payment before the end of the year. -Consider prepaying your property taxes for next year. Not only w...ill you be able to deduct more of any bill that is greater than $10,000 in 2017, but you may also receive a larger benefit in 2017 under the current income tax brackets and rates. Please note that the payments must be applied as payments by the tax collector and cannot be held as deposits or in escrow. -Make charitable contributions now. -Pay your January 1, 2018 mortgage payment in December, 2017. This deduction is not predicted to go away, however, an increased standard deduction in 2018 may translate to your wanting the benefit of any itemization in the 2017 tax year.

The federal Saver's Credit is often overlooked and rarely talked about. Low to moderate-income workers can still plan now to earn a credit on their 2017 tax return. This is a special tax break designed to encourage people with modest incomes to save for retirement and it could mean up to a 50% credit for the first $2,000 a taxpayer contributes to a retirement plan. The Saver's Credit can be claimed by single filers with incomes up to $31,000 in 2017 and married couples filing jointly with incomes up to $62,000. The credit is also based on overall tax liability and the amount voluntarily contributed to a traditional or Roth IRA, a 401(k) or 403 (b) plan.

https://www.irs.gov//reconstructing-records-after-a-natura