June
Friday, June 15 Individuals living outside the U.S.: File Form 1040. For automatic 4 month extension file Form 4868 and deposit estimated tax.
Friday, June 15 Pay the second installment of 2018 estimated tax -Use Form 1040-ES.
Friday, June 15 Corporations: Deposit the second installment of your 2018 estimated tax.
July
Tuesday, July 31 Deposit FUTA owed through June if more than $500.
Tuesday, July 31 File Form 941 for the second quarter.
August
Friday, August 10 File Form 941 for the second quarter if you timely deposited all required payments.
If you sell a home, you may qualify to exclude from your income all or part of any gain from the sale. Below are some things you should keep in mind when selling a home:
Ownership and use. To claim the exclusion, you must meet the ownership and use tests. During a five-year period ending on the date of the sale, you must have:
Owned the home for at least two years.
Lived in the home as your main home for at least two years.
Gain. Those who sell their main home and have a gain from the sale may usually be able to exclude up to $250,000 from their income or $500,000 on a joint return. Homeowners who can exclude all of the gain do not need to report the sale on their tax return.
Loss. You experience a loss when your main home sells for less than what you paid for it. This loss is not deductible.
Reported sale. Those who cannot exclude the gain from their income must report the sale of their home on a tax return. Those who choose not to claim the exclusion must report the gain on a tax return. Those who receive a Form 1099-S, Proceeds from Real Estate Transactions, as part of the real estate transaction must also report the sale on their tax return.
Mortgage debt. Some must report forgiven or canceled debt as income on their tax return. This generally includes people who went through a mortgage workout, foreclosure, or other process in which a lender forgave or canceled mortgage debt on their home. Those who had a written agreement for the forgiveness of the debt in place before January 1, 2017, might be able to exclude the forgiven amount from income.
Possible exceptions. There are exceptions to these rules for persons with a disability, certain members of the military, intelligence community and Peace Corps workers, among others.
Multiple homes. Those who own more than one home can only exclude the gain on the sale of their main home. They must pay taxes on the gain from selling any other home.
Now that school’s out, many students will be starting summer jobs…from working at a summer camp to being an office intern. The IRS reminds students that not all the money they earn may make it to their pocket. That’s because employers must withhold taxes from the employee’s paycheck. Here are a few things these workers need to know when starting a summer job:
New employees. Students and teenage employees normally have taxes withheld from their paychecks by the employer. When a taxpayer gets a new job, they need to fill out a Form W-4. Employers use this form to calculate how much federal income tax to withhold from the employee’s pay.
Self-employment. Students who do odd jobs over the summer to make extra cash – like babysitting or lawn care – are considered self-employed. They should remember that money earned from self-employment is taxable. Workers who are self-employed may be responsible for paying taxes directly to the IRS. One way to do that is by making estimated tax payments during the year. Those who do this should keep good records of all money they receive.
Tip income. Someone working as a waiter or a camp counselor who receives tips as part of their summer income should know that tip income is taxable income and subject to federal income tax. They should keep a daily log to accurately report them, as they will report tips of $20 or more received in cash in any single month.
Payroll taxes. This tax pays for benefits under the Social Security system. While some may earn too little from their summer job to owe income tax, employers usually must still withhold Social Security and Medicare taxes from their pay. If someone is self-employed, then Social Security and Medicare taxes may still be due and are generally paid by the taxpayer.
People who have itemized before may be affected by changes from the Tax Cuts and Jobs Act. Those who itemize should use the IRS Withholding Calculator to make sure their employers are withholding the appropriate amount of tax from their paychecks for their financial situation. Due to the significant changes to itemized deductions, your tax bill could be greatly impacted.
The law changes are effective in 2018 and affect the tax returns filed for 2019. The new law makes a number of major changes, including:
Limiting the deductions for state and local taxes
Limiting the deduction for home mortgage interest in certain cases
Excluding deductions for employee business expenses, tax preparation fees and investment expenses, including investment management fees, safe deposit box fees and investment expenses from pass-through entities
The Tax Cuts and Jobs Act nearly doubled standard deductions and changed several itemized deductions. Some individuals who formerly itemized may now find it more beneficial to take the standard deduction, and this could affect how much a you need to have your employer withhold from your pay. Also, even those who continue to itemize deductions should check their withholding because of changes made by the new tax law.
Waiting to make necessary adjustments means there are fewer pay periods to make the tax changes – which could have a bigger impact on each paycheck.
Having too little tax withheld could result in an unexpected tax bill or penalty at tax time in 2019. Adjusting withholding after a “paycheck checkup” can also prevent employees from having too much tax withheld. With the average refund topping $2,800, some might prefer to have less tax withheld up front and receive more in their paychecks.
Using the Withholding Calculator
When using the Withholding Calculator, you can indicate whether you are taking the standard deduction or itemizing deductions. If you are itemizing, you will enter estimates of your deductions. The Withholding Calculator applies the new law to these amounts when figuring your withholding.
It’s helpful if you have your completed 2017 tax return handy when using the Withholding Calculator. It can help estimate the amount of income, deductions, adjustments and credits to enter. You will also need your most recent pay stubs. These help the calculator compute your withholding so far this year.
Calculator results depend on the accuracy of information entered. If your personal circumstances change during the year, you should return to the calculator to check whether your withholding should be changed.
You can use the results from the Withholding Calculator to help determine if you should complete a new Form W-4 and, if so, what information to put on a new Form W-4.
The Withholding Calculator does not request personally-identifiable information, such as name, Social Security number, address or bank account numbers. The IRS does not save or record the information entered on the calculator.
Below are changes from the Tax Cuts and Jobs Act that affect:
Move related vehicle expenses
Un-reimbursed employee expenses
Vehicle expensing
Changes to the deduction for move-related vehicle expenses
The Tax Cuts and Jobs Act suspends the deduction for moving expenses for tax years beginning after Dec. 31, 2017, and goes through Jan. 1, 2026. Thus, during the suspension no deduction is allowed for use of an automobile as part of a move using the mileage rate listed in here. This suspension does not apply to members of the Armed Forces of the United States on active duty who move pursuant to a military order related to a permanent change of station.
Changes to the deduction for un-reimbursed employee expenses
The Tax Cuts and Jobs Act also suspends all miscellaneous itemized deductions that are subject to the 2 percent of adjusted gross income floor. This change affects un-reimbursed employee expenses such as uniforms, union dues and the deduction for business-related meals, entertainment and travel.
Thus, the business standard mileage rate listed in here, which was issued before the Tax Cuts and Jobs Act passed, cannot be used to claim an itemized deduction for un-reimbursed employee travel expenses in taxable years beginning after Dec. 31, 2017, and before Jan. 1, 2026.
Standard mileage rates for 2018
The standard mileage rates for the use of a car, van, pickup or panel truck for 2018 remain:
54.5 cents for every mile of business travel driven, a 1 cent increase from 2017.
18 cents per mile driven for medical purposes, a 1 cent increase from 2017.
14 cents per mile driven in service of charitable organizations, which is set by statute and remains unchanged.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical purposes is based on the variable costs.
You always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
You may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
Increased depreciation limits
The Tax Cuts and Jobs Act increases the depreciation limitations for passenger automobiles placed in service after Dec. 31, 2017, for purposes of computing the allowance under a fixed and variable rate plan. The maximum standard automobile cost may not exceed $50,000 for passenger automobiles, trucks and vans placed in service after Dec. 31, 2017. Previously, the maximum standard automobile cost was $27,300 for passenger automobiles and $31,000 for trucks and vans
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