tax amnesty

IRS and NJ Taxation Highlights

 

Yesterday I attended a continuing professional education seminar with speakers from both the IRS and the State of New Jersey. Here are some highlights after all of the recent Federal changes and also many New Jersey changes that most people are not aware of:

Your paycheck may be under withheld: After the new Federal tax law changes, many people have seen an increase in their take home pay due to the tax cuts, but it is quite possible that too little has been withheld. If you want to be safe then ask your employer to increase your withholdings, and you can also use the withholding calculator at irs.gov. Beware that it is really meant for simpler tax situations versus being self-employed, having rental income, and investments. If you are one of our business clients that we already prepare a year-end tax projection for, then we will take care of this for you.

Private debt collectors: The IRS uses private debt collectors, and the State of New Jersey has already been doing this for years through Pioneer Credit Recovery. This can cause concern especially with all of the fraud that is taking place nowadays. By the way, the IRS will not ask you to drop off cash somewhere, send a money order, or purchase gift cards to settle your debts.

New Jersey tax amnesty: There are many unknowns to all of the changes that NJ has made, including the start date of a tax amnesty program. The program will likely start on November 15th of this year and end on January 15, 2019, and allows a reduction of interest charged and elimination of penalties for old tax debts from February 1,  2009 through September 1, 2017. You should receive a notification on this program if you have old debts, but you can file and pay your old debts even if you do not receive a notice from the State.

New Jersey property tax deduction increase : The property tax deduction on your New Jersey tax return has been raised to $15,000 from $10,000.

Penalties for not having health insurance in New Jersey: New Jersey now requires residents to have health insurance or they have to pay a tax penalty. New Jersey has taken the opposite approach of the Federal government.

Increased pension exclusions in New Jersey: This will be phased in over the next several years, however, there is an income limitation of $100,000, which has not increased.

There are many, many more changes related to New Jersey, including reinstatement of Urban Enterprise Zones, increased tax rates on income over $5,000,000, taxes on ride sharing, taxes on liquid nicotine, and changes to payments plans.

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