July IRS Updates

July IRS News

It’s summer, many people are not thinking about taxes, but there are still important things happening in and around the IRS. Here are some important updates you should notice.

Data Security Updates

A new awareness campaign has been launched by the IRS and its Security Summit partners. The campaign is primarily aimed at tax professionals and includes updated information to help protect taxpayers’ data and help prevent the filing of fraudulent returns. Criminal entities obtain and use stolen identity information and to combat this the newly-revised Publication 4557, Safeguarding Taxpayer Data, outlines basic steps tax professionals should take and how to take them. It also provides details on how to comply with requirements for a data security plan. The IRS also created Publication 5293, Data Security Resource Guide for Tax Professionals, which includes additional resources for tax preparers.

Veterans May Be Owed Refunds

The IRS has announced that veterans who claimed disability severance payments after January 17, 1991 as income should file an amended return to claim refunds. This is a result of the Combat-Injured Veterans Tax Fairness Act of 2016. Veterans should receive a letter from the US Department of Defense explaining how to claim their refund, which will expire one year from the date of the letter. More information and special instructions can be found here.

Summer Tax Tips

Summer workers may be exempt from income tax withholding, but will still pay social security and Medicare tax. Check your withholding with the IRS’ Withholding Calculator and make adjustments if necessary. Also ensure that your worker classification is accurate; independent contractors are responsible for paying their own taxes, including Social Security and Medicare, while employees have their taxes withheld from their paychecks. Know your status and plan accordingly.

Summer is wedding season and newly-married couples should not waste time in filing any name changes with the Social Security Administration and adjusting their withholding.

If you’re clearing out old or unused belongings, donating them to a qualified charity may provide you with tax deduction. You can also deduct mileage if you use your personal vehicle for any charity work.

Summer day camp (not overnight camp) expenses may qualify as a Child and Dependent Care Credit. See IRS Publication 503, Child and Dependent Care Expenses, for more information.

More details are here.