taxseason

When Can I Expect My 2018 Tax Refund?

Many clients have called to ask when they can file their tax return and more importantly, when to expect to receive their refund? Now that the Government is open after a 35-day partial shutdown, refunds are expected to be provided in a timely manner.

For your convenience, here is a summary of recent updates in the news:

TAXDAY

According to TAXDAY, 2019/01/29, I.1 “the IRS has announced that it expects the first tax refunds to go out during the first week of February. Additionally, many refunds will be paid by mid-to-late February, as in previous years”.

CCH Treasury Secretary, Steven Mnunchin

  • In an interview, Secretary Mnuchin said, “the Treasury and IRS are prepared for the 2019 tax filing season”, which began January 28.
  • In a January 29th televised interview Treasury Secretary Mnuchin said “#we’re taking tax returns. We’ll be ready for tax refunds. We’ll have the phones re-staffed” and went on to say, “We are ready for tax season, and I can assure you that tax refunds will be paid as normal”. Mnuchin sounds like the Treasury and IRS have this tax season under control.

IRS Commissioner, Charles Rettig

  • In a statement, Commissioner Rettig said, “the IRS will be doing everything it can to have a smooth filing season”. We will all hope this is the case given the implementation of the Tax Cuts and Jobs Act (TCJA). Given the many changes created by TCJA we can only wonder what a “smooth filing season” is truly going to be. There will be an increase in taxpayer questions coupled with an anxiety to receive refunds while navigating the TCJA. This will be a daunting task for all taxpayers and the IRS.

Where can I go for more information or questions on my refund?

If you are wondering about the status of your refund, taxpayers can go to “Where’s My Refund” on the IRS website . You will need to have a copy of your tax return to answer IRS authentication questions before your tax refund status will be provided.

Given the partial Government shutdown and in order to avoid long call wait times, utilize the IRS website as much as possible.  The website has a lot of information that may be able to answer your question.

 

It is important this year that taxpayers and preparers exercise extreme diligence when preparing tax returns. The implementation of TCJA coupled with the partial government shutdown pose risks that could generate tax return processing delays.

If you enjoyed this post, I’d be very grateful if you’d help it spread by emailing it to a friend, or sharing it on social media. Thank you!

—Tom

 

Thomas D. Terranova, Jr., CPA, PFS, CITP is managing member of Terranova & Associates, LLC and member of the AICPA and MA Society of CPA’s.

Terranova & Associates, LLC is located in Danvers, MA.  Please contact at 978-774-7700 for consultations.

Posted by Terranova & Associates LLC in Credit, deduction, deductions, Internal Revenue Service, refund, tax, Tax Tips, taxes, 0 comments

How An LLC Is Taxed

How an LLC is taxed

Many clients are referred to our office with questions about Limited Liability Company’s taxation. What is an LLC? The Massachusetts LLC law became effective January 1, 1996 with the creation of the Limited Liability Act. An LLC is a form of business organization that is an unincorporated organization having one or more members formed pursuant to Massachusetts General Law chapter 156C. The various tax treatments available to LLC is Schedule C, Corporation, S Corporation, and Partnership. These options can be daunting.

Now that we have all of the legal jargon out of the way, let’s talk tax!

How is an LLC taxed and how will that affect you? I will start with explaining the automatic tax treatment by the IRS and then Tax Elections that are available. An LLC can have one or several members, based upon the number of member(s) the IRS automatically taxes the LLC as a Sole Proprietor if one member; and a Partnership if two members. Therefore, you must be extremely careful when applying for a tax identification number as that is the Form that you inform the IRS as to the number of members in the LLC and in turn the IRS issues a notice with the LLC tax identification number and specific tax return that needs to be filed. In both situations the profit of the Organization is taxed with your individual tax return subject to federal income tax and self-employment tax (subject to IRC limitations), along with Massachusetts income tax.

There are Tax Elections available for a LLC member or members to make with the IRS to have the Organization taxed as a Corporation or S Corporation. You might be thinking at this point how I make it through the maze of IRS Forms to complete this task. To be treated as a Corporation you must file an Entity Classification Election Form with the IRS. To be treated as an S Corporation you must file an Entity Classification Election Form along with Election by a Small Business Corporation (pursuant to Code section 1362). I recommend mailing the executed Forms to the IRS certified and return receipt to prove timely mailing and IRS receipt of the Form. You are correct, it is a long and precise process that you must go through, so please move through it with extreme care.

This process appears confusing on its face. However, if think of the process in terms of how you want to be taxed and what Form you desire the LLC to file, that will provide you with the road map of Forms you must file with the IRS to accomplish your goal. Remember, choosing the correct tax treatment of your LLC will cost you thousands of dollars or save you thousands of dollars.

 

Thomas D. Terranova, Jr., CPA, PFS, CITP

Terranova & Associates, LLC.

978-774-7700

Posted by Terranova & Associates LLC in Tax Tips, 0 comments