IRS Hires Private Debt Collection Services: We can help

The recent announcement that the IRS is turning over certain collection cases to third-party debt collectors has sent some shockwaves through our profession. The IRS has stated that only very old, inactive cases over a certain dollar limit will be referred to third-party collection agencies. The reality is that a taxpayer has the right to immediately request that their account be returned to the IRS for collection, and this may be beneficial for many taxpayers.

A Simplified Home Office Deduction

Do you work at home or have a home-based business? If so, you should be aware that the IRS has created a simpler option for calculating the deduction for the business use of your home. The new option makes recordkeeping easier because, instead of maintaining records of specific home office expenses, you can use a standard rate per square foot. The rate is $5 per square foot (up to a maximum of 300 sq. feet or $1,500) for qualifying business use space in place of taking a pro rata percentage of items such as mortgage interest, taxes and repairs.

Keep in mind there are good and bad aspects to this “simpler” method. The new method gives you back your full interest and tax deduction on schedule A, but you will lose your depreciation and loss carryover deductions. Of course, you must still use your home office regularly and exclusively for business. This may be a welcome relief for some taxpayers, but it might not be the best choice for others. Is it the right choice for you? Please contact us for answers to your financial questions.

New Online Tool Allows Taxpayers to Check IRS Account Information

Through a new IRS online tool, you now have access to your tax account balances online, including tax due, penalties, and interest after you complete an online registration process called Secure Access, per an IRS announcement on Thursday.