IRS Says Standard Mileage Rates for 2018 to Increase From Rates for 2017

ANNAPOLIS, Md. (December 28, 2017) - The Internal Revenue Service has issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.
  • 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.
  • 14 cents per mile driven in service of charitable organizations.

The business mileage rate and the medical and moving expense rates each increased one cent per mile from the rates for 2017. The charitable rate 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 and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. More information may be found at IRS.gov.

IRS Has Tips for What to Do Before the Tax Year Ends on December 31

ANNAPOLIS, Md. (December 27, 2017) - As tax filing season approaches, the Internal Revenue Service is reminding taxpayers that there are things they should do now to get ready for filing season. Here are some tips to get ready:

  • For most taxpayers, Dec. 31 is the last day to take actions that will affect their 2017 tax returns. For example, charitable contributions are deductible in the year made. Donations charged to a credit card before the end of 2017 count for the 2017 tax year, even if the bill isn’t paid until 2018. Checks to a charity count for 2017 as long as they are mailed by the last day of the year.
  • Taxpayers over age 70 ½ are generally required to receive payments from their individual retirement accounts and workplace retirement plans by the end of 2017, though a special rule allows those who reached 70 ½ in 2017 to wait until April 1, 2018, to receive them.
  • Most workplace retirement account contributions should be made by the end of the year, but taxpayers can make 2017 IRA contributions until April 18, 2018. For 2018, the limit for a 401(k) is $18,500. For traditional and Roth IRAs, the limit is $6,500 if age 50 or older and up to $15,500 for a Simple IRA for age 50 or older.
  • Taxpayers should be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations.
  • Taxpayers who have moved should tell the U.S. Postal Service, employers and the IRS. To notify the IRS, mail IRS Form 8822, Change of Address, to the address listed on the form’s instructions. For taxpayers who purchase health insurance through the Health Insurance Marketplace, they also should notify the Marketplace when they move out of the area covered by their current plan.
  • For name changes due to marriage or divorce, notify the Social Security Administration so the new name will match IRS and SSA records. Also notify the SSA if a dependent’s name changed. A mismatch between the name shown on your tax return and the SSA records can cause problems in the processing of a return and may even delay a refund.
  • Some refunds cannot be issued before mid-February. By law, the IRS cannot issue refunds before mid-February for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on Feb 27, 2018, if they chose direct deposit and there are no other issues with the tax return.
  • Some Individual Taxpayer Identification Numbers must be renewed. Any Individual Taxpayer Identification Number not used on a tax return at least once in the past three years will expire on December 31, 2017. Additionally, all ITINs issued before 2013 with middle digits of 70, 71, 72 or 80 (Example: 9XX-70-XXXX) will also expire at the end of the year. As a reminder, ITINs with middle digits 78 and 79 that expired in 2016 can also be renewed. Only taxpayers who need to file a U.S. federal tax return or are claiming a refund in 2018 must renew their expired ITINs. Affected ITIN holders can avoid delays by starting the renewal process now.
  • Those who fail to renew before filing a return could face a delayed refund and may be ineligible for some important tax credits. More information, including answers to frequently asked questions is available on IRS.gov/ITIN.
  • Keeping copies of tax returns is important. Taxpayers may need a copy of their 2016 tax return to make it easier to fill out a 2017 tax return. Some taxpayers using a software product for the first time may need to provide their 2016 Adjusted Gross Income, or AGI, to e-file their 2017 tax return.

Taxpayers who do not have a copy of their 2016 return and are existing users can log in to IRS.gov/account if they need their AGI. Otherwise the IRS will mail a Tax Return Transcript if requested online or by calling 800-908-9946. Plan ahead. Allow five to 10 days for delivery. Visit the IRS’ website to learn more about identification verification and electronically signing tax returns.

IRS Warns Taxpayers of Email Scam Targeting Hotmail Users

ANNAPOLIS, Md. (December 14, 2017) – The Internal Revenue Service is warning taxpayers and tax professionals of a new email scam targeting Hotmail users that is being used to steal personal and financial information.

The phishing email subject line reads: “Internal Revenue Service Email No. XXXX | We’re processing your request soon | TXXXXXX-XXXXXXXX.” The email leads taxpayers to sign in to a fake Microsoft page and then asks for personal and financial information.

“Cyber thieves are always on the hunt to take Maryland taxpayers’ money,” Comptroller Peter Franchot said. “That’s why my staff and agents remain vigilant in alerting consumers to scams like this, particularly at holiday time when people are distracted by the holiday rush.”

The IRS has received more than 900 complaints about this new phishing scheme that seems to exclusively target Hotmail users. The suspect websites associated with this scam have been shut down, but taxpayers should be on the lookout for similar schemes.

Individuals who receive unsolicited emails claiming to be from the IRS should forward it to phishing@irs.gov and then delete it. It is important to keep in mind the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. For more information, visit the Tax Scams and Consumer Alerts page on IRS.gov.

The IRS reminds tax professionals to be aware of phishing emails, free offers and other common tricks by scammers. Tax professionals who have data breaches should contact the IRS immediately through their Stakeholder Liaison at the webpage for Data Theft Information for Tax Professionals.

Comptroller Franchot’s Statement on New Revenue Estimates

ANNAPOLIS, Md. (December 13, 2017) – The Board of Revenue Estimates voted today to reduce by $73.2 million the revenue projection for the State of Maryland for Fiscal Year 2018 and to increase by $11 million the estimate for fiscal year 2019. That establishes a $17.6 billion revenue estimate for the next fiscal year, which begins in July 2018.

The Board’s actions are largely driven by continued weaker-than-anticipated sales tax revenues as consumers remain reluctant or unable to spend. Additionally, non-nexus online shopping continues to cut into tax revenues and hinders the growth of brick-and-mortar Maryland retailers. The negotiations over tax bills in Washington continue to be monitored; once final action is adopted, the impact on Maryland revenues will be added into future revenue estimates.

Following are Comptroller Franchot’s remarks, as prepared for delivery:
“I know a lot of Marylanders and my colleagues at the state and local levels are wondering how Maryland will be impacted by the federal tax reform legislation being considered by Congress.

And like each of you, it is my hope that common sense will prevail and that our lawmakers will think long and hard before enacting provisions that will have dramatic effects on middle-class families and state revenues.

The revenue projections that have been brought to this Board for approval were meticulously and carefully crafted based on what we know … and the trends we are seeing … and the data we are receiving. Once Congress approves a final version of the tax reform legislation, our experts here will work diligently to determine its impact on Marylanders’ income and our state’s fiscal future and propose revisions to our revenue estimates where appropriate.

In other words, we’re doing the best we can with the information we have. But, here’s what we do know and here’s what the numbers tell us. While we have undoubtedly made considerable progress after the crippling effects of the 2008 Recession, with an unemployment rate hovering around 4 percent and stock market trends that are headed in the right direction, the fact of the matter is that thousands of Maryland working families and small business owners who were affected the most by the economic crash nearly a decade ago haven’t fully recovered.

We continue to see that with declining sales and use tax revenue. With wages and salaries that are lackluster at best. Even those who are employed with good-paying jobs have – in more cases than not – elected to put their disposable incomes in their piggy banks instead of putting money back in our local economy. And who can blame them?
With all the uncertainty that’s being produced by Washington at an almost daily basis, coupled with the continued fiscal and economic challenges that our state and our communities face. It’s understandable why so many of our citizens remain hesitant and timid about how they spend their hard-earned incomes.
Given the challenges that our working families and small
business owners face and the potential impact that will emerge from federal tax reform legislation, it is my hope that the General Assembly will continue to exercise fiscal restraint as they consider legislation that will impact the fiscal health of our state and our citizens.
I renew my call for a moratorium on new taxes and fees, because the last thing Maryland families and businesses need are further disruptions to their budgets in a time when some of our friends and neighbors are struggling to make ends’ meet and pay the bills.
At the state level, we have to be careful and smart on how we spend the taxpayers’ dime and simply forego the things that we want… in order for to pay for the things that we need. And I hope that the General Assembly will once again consider legislation that will require online retailers to collect and remit sales and use taxes.

And I want to emphasize that this is not a new tax … or a new fee … this is simply leveling the playing field for our small businesses that diligently comply with our sales and use tax laws against online retailers who have gotten away with not doing so because of legislative inaction. Because at the end of the day, government should not be picking winners and losers – and when we force small businesses to compete with online retail giants that offer convenience, lower prices, and don’t collect and remit sales tax we are putting our brick-and-mortar stores and main street retailers at a tremendous disadvantage.

I was proud to testify in support of the Main Street Fairness Act that Senator Madaleno and Delegate Hixson introduced last session, and I do hope that legislators can work in a bipartisan fashion to advance this legislation in the 2018 General Assembly session.
So, let me close by urging those of you who have not yet completed your holiday shopping to go out and support our small businesses and local retail stores that not only offer great and quality products, but serve as the bedrock of our communities and our state economy.”

View the data here.

 

MEDIA CONTACTS:  Joe Shapiro: jshapiro@comp.state.md.us

410-260-7305 (office); 443-871-2244 (mobile)

Alan Brody: abrody@comp.state.md.us
                                        410-260-6346 (office); 443-924-1473 (mobile)

Comptroller Launches Petition to Rally Support for Craft Beer Legislation

ANNAPOLIS, Md. (December 11, 2017) – As a statewide coalition of brewers, consumers and stakeholders gear up for the effort to modernize Maryland’s antiquated and dysfunctional beer laws, Comptroller Peter Franchot today launched a petition drive in support of his proposed Reform on Tap Act of 2018.

Comptroller Franchot announces this new petition drive with the goal of collecting a minimum of 6,541 names – representing the total number of jobs the craft beer industry supports in the state, according to a recent study conducted the Maryland Bureau of Revenue Estimates.

Marylanders can sign the petition by going to the Comptroller’s website, marylandtaxes.com. Petitions will also be distributed at events and breweries across the state.

“Marylanders from across the state and across every demographic overwhelmingly support reforming our laws to allow our homegrown craft brewing industry to grow and become the national leader,” said Comptroller Peter Franchot. “This petition drive will once again re-affirm the fact that Marylanders want this state to be supportive and welcoming of these family-owned small businesses and manufacturers that do so much for our communities and our state’s economy.”

Surveys have consistently showed Marylanders overwhelmingly support the craft brewing industry and updating Maryland’s antiquated laws governing the production, distribution and sale of Maryland craft beer.

A recent online survey taken after Comptroller Franchot released the Reform on Tap Act showed that 93 percent of respondents believe that Maryland’s laws for brewers are too restrictive. Additionally, more than 92 percent of respondents feel that there should be no limits on how much beer a brewery can produce or sell in its taproom.

The Maryland craft brewing industry had an overall economic impact of $637.6 million and supported or created 6,541 jobs in 2016, according to an economic impact study conducted by the Bureau of Revenue Estimates that was released earlier this fall.

The study found that when the sale and distribution activity of non-Maryland craft beer is included in the projection, the estimated economic impact grew to $802.7 million. The industry contributed $53.1 million in state and local revenues and $55.3 million in federal revenues, which directly supports investments in education, public safety, transportation and the environment.

In 2016, Maryland craft breweries directly employed 430 workers and had an indirect and induced effect on 264 jobs, yielding a total of $28.4 million in wages and generating $143.7 million in economic output, according to the study.

Both alcohol distributors and retailers (bars and restaurants) also greatly benefited from Maryland’s craft brewers, with a direct, indirect and induced effect on almost 6,000 jobs, about $200 million in labor income and nearly $500 million in economic activity, the report found.

MEDIA CONTACTS: Joe Shapiro: jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)
Alan Brody: abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)

Taxpayers with Expiring ITINs Should Renew before December 31

ANNAPOLIS, Md. (December 6, 2017) – The Internal Revenue Service is reminding taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) to submit their renewal applications as soon as possible. Failing to renew them by the end of the year will cause refund and processing delays in 2018.

Over the summer, the IRS mailed letters to more than one million taxpayers whose ITINs are set to expire – those with middle digits 70, 71, 72 or 80. Any ITIN that has not been used on a federal tax return at least once in the last three consecutive years also will expire at the end of the year. Affected taxpayers who expect to file a tax return in 2018 must submit a renewal application by the deadline.

Who should renew an ITIN?

• ITINs with middle digits 70, 71, 72, or 80 (For example: 9NN-70-NNNN) need to be renewed if the taxpayer will have a filing requirement in 2018.
• Taxpayers whose ITINs expired due to lack of use should only renew their ITIN if they will have a filing requirement in 2018.
• Taxpayers who are eligible for or who have a SSN should not renew their ITIN but should notify IRS both of their SSN and previous ITIN so that their accounts can be merged.
• Taxpayers whose ITINs have middle digits 78 or 79 that had already expired and were never renewed should renew their ITIN if they will have a filing requirement in 2018.
To renew an ITIN, taxpayers must complete a Form W-7 and submit all required documentation. Although a Form W-7 is usually attached to the tax return, a taxpayer is not required to attach a federal tax return to their ITIN renewal application.

There are three ways to submit the W-7 application package:

• Mail the Form W-7, along with original identification documents or copies certified by the issuing agency, to the IRS address listed on the Form W-7 instructions. The IRS will review the identification documents and return them within 60 days.
• Taxpayers have the option to work with Certified Acceptance Agents (CAAs) authorized by the IRS to help them apply for an ITIN. CAAs can certify all identification documents for primary and secondary taxpayers and certify that an ITIN application is correct before submitting it to the IRS for processing. A CAA can also certify passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.
• In advance, taxpayers can call and make an appointment at a designated IRS Taxpayer Assistance Center instead of mailing original identification documents to the IRS. When making an appointment, be sure to indicate that this involves an ITIN renewal application.

Visit IRS.gov for more information.

Thieves Are Using W-2 Scam to Get Employee Data, Tax Information

ANNAPOLIS, Md. (December 1, 2017) – The IRS is warning business, payroll and human resource communities about a growing W-2 email scam by which criminals are gaining access to W-2s and other sensitive tax information that employers have about their employees.

During National Tax Security Awareness Week this week, the IRS has been partnering with state tax agencies – including the Maryland Comptroller’s Office and tax industry stakeholders – to remind people about the importance of data protection.

W-2 scams put workers at risk for tax-related identity theft. The IRS recommends that all employers educate employees about this scheme, especially those in human resources and payroll departments. These employees are usually the first targets.

Here are five warning signs about the scam:

• The thief poses as a company executive, school official or other leader in the organization.
• Scam emails often start with a simple greeting. It can be something like, “Hey, you in today?”
• The crook sends an email to an employee with payroll access and requests a list of all employees and their Forms W-2. The thief may even specify the format in which they want the information.
• Thieves use many different subject lines and use words like “review,” “manual review” or “request.” In some cases, the thief may send a follow up email asking for a wire transfer.
• Because payroll officials believe they are corresponding with an executive, it may take weeks for someone to realize a data theft occurred. Criminals usually try to use the information quickly, sometimes filing fraudulent tax returns within a day or two.

This scam is such a threat that a special IRS reporting process has been set up. If you think you were a victim of this scam, visit IRS.gov to find out how to report it.

Recognize Phishing Email Scams

ANNAPOLIS, Md. (November 28, 2017) - The IRS reminds taxpayers to be on the lookout for new, sophisticated email phishing scams that can compromise personal information and affect a taxpayer’s refund. This week is National Tax Security Awareness Week and the IRS is partnering with state tax agencies, including the Maryland Comptroller’s Office and other industry stakeholders to remind people about the importance of data protection.

“One of my top priorities as Comptroller is to stop cyber thieves from tricking Marylanders with bogus emails seeking personal financial information,” said Comptroller Peter Franchot. “Working together with our federal and state partners, we will hold accountable these scammers who take advantage of law-abiding taxpayers.”

Phishing attacks use email or malicious websites to get personal information from the user. Typically, the criminal fools someone into believing the phishing email is from someone they trust. The emails often look and feel like authentic communications, but these targeted messages can trick even the most cautious person into doing something that may compromise data.

Taxpayers should be vigilant and skeptical. Even if the email is from a known source, they should use caution because cyber crooks are very good at mimicking trusted businesses, friends and family.

Here are six examples of email phishing scams:

  • Emails requesting personal information. The thief might ask for bank account numbers, passwords, credit cards and Social Security numbers. This is the most common way thieves steal data.
  • An email urgently warning the recipient to update online financial accounts at a hyperlink provided in the email. The link goes to a fake site.
  • A message with an email address spoofing a familiar address to look like trusted businesses, friends and family. The fake address has a slight change in text, such as name@example.com vs narne@example.com. Merely changing the “m” to an “r” and “n” can trick people.
  • Emails saying the recipient has a tax refund waiting at the IRS or that the IRS needs information about insurance policies. The IRS doesn’t initiate spontaneous contact with taxpayers by email to request personal or financial information.
  • The message has hyperlinks that take someone to a fake site. In one example, the email says: “Following recent calculations, we notice that you are eligible to receive a tax refund. In order to start the refund procedure, please visit this link and follow the steps required.” The link goes to a fake site. The IRS doesn’t send emails asking for refund verification.
  • The message includes a PDF attachment that may download malware or viruses. Never open an attachment from a suspicious email address.

For more information, visit:

National Tax Security Awareness Week: Eight Steps to Keep Online Data Safe

ANNAPOLIS, Md. (November 27, 2017) — During the holiday shopping season, shoppers are looking for the perfect gifts and criminals are looking for sensitive data. This data includes credit card numbers, financial accounts and Social Security numbers. Cybercriminals can use this information to file a fraudulent tax return. During National Tax Security Awareness Week, the IRS is partnering with state tax agencies, the tax industry and groups across the country to remind people about the importance of data protection.

“Online scammers are very active during the holiday season and we want Marylanders to know how to keep their personal information secure,” said Maryland Comptroller Peter Franchot.

Anyone with an online presence can do a few simple things to protect their identity and personal information. Following these eight steps can also help taxpayers protect their tax return and refund in 2018:

• Shop at familiar online retailers. Generally, sites with an “s” in “https” at the start of the URL are secure. Users can also look for the “lock” icon in your browser’s URL bar. That said, some criminals may get a security certificate, so the “s” may not always mean a site is legitimate.

• Avoid unprotected Wi-Fi. Users should not do online financial transactions when using unprotected public Wi-Fi. Unprotected public Wi-Fi hotspots may allow thieves to view transactions.

• Learn to recognize and avoid phishing emails that pose as a trusted source. These emails can come from a source that looks like a legitimate bank or even the IRS. These emails may include a link that takes the user to a fake website. From there, the thieves can steal usernames and passwords.

• Keep a clean machine. This includes computers, phones and tablets. Users should install security software to protect against malware that may steal data. This software also protects against viruses
that may damage files.

• Use passwords that are strong, long and unique. Experts suggest a minimum of 10 characters. Use a combination of letters, numbers and special characters. Use a different password for each account.

• Use multi-factor authentication when available. Some financial institutions, email providers and social media sites allow users to set their accounts for multi-factor authentication. This means users may need a security code, usually sent as a text to their mobile phone, in addition to a username and password.

• Sign up for account alerts. Some financial institutions will send email or text alerts to an account holder when there is a withdrawal or change to their accounts. Generally, people can check their account profile to see what added protections may be available.

• Encrypt sensitive data and protect it with a password. People who keep financial records, tax returns or any personal information on their computer should protect this data. Users should also back up important data to an external source. When disposing of a computer, mobile phone or tablet, people should make sure they wipe the hard drive of all information before trashing.

For more information, please click:

Taxes. Security. Together
Protect Your Clients; Protect Yourself
Don’t Take the Bait

Taxpayers Can Use IRS Select Check Tool Before Donating on Giving Tuesday

ANNAPOLIS, Md. (November 27, 2017) – Giving Tuesday is an annual event celebrated the week after Thanksgiving to kick off the season of charitable giving. Taxpayers making donations may be able to deduct them on their tax return. As they decide where to make their donations, the IRS has a tool that may help.

Exempt Organizations Select Check on IRS.gov is a tool that allows users to search for charities. It provides information about an organization’s federal tax status and filings. Here are four facts about EO Select Check:

• Donors can use it to confirm an organization is tax exempt and eligible to receive tax-deductible charitable contributions.

• Users can find out if an organization had its tax-exempt status revoked. A common reason for this is that the organization did not file its Form 990 or notices annually as required.

• EO Select Check does not list certain organizations that may be eligible to receive tax-deductible donations. This includes churches, organizations in a group ruling, and governmental entities.

• An organization’s “doing business as” name is not searchable. Search using an organization’s legal name instead.

Taxpayers can also use the Interactive Tax Assistant, Can I Deduct my Charitable Contributions? to help determine if a charitable contribution is deductible.
For more information, please click:
Exempt Organizations Select Check – Search Tips
Exempt Organizations Select Check Frequently Asked Questions