Executive Management & Consultants International, LLC

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Got a big tax refund? Use IRS Withholding Calculator to boost take-home pay in 2018

WASHINGTON – Taxpayers who received large refunds earlier this year may be able to get more of their money included in their paychecks during the rest of 2018 by using the Withholding Calculator on IRS.gov.

According to the Internal Revenue Service, most taxpayers – more than seven out of 10 –  receive refunds averaging around $2,800. Typically, taxpayers who receive large refunds could receive more of their money throughout the year, rather than waiting until they file their tax return after the end of the year.

Tax reform has big impact

The Tax Cuts and Jobs Act, enacted in December, made major changes to the tax law. Any of these far-reaching changes could have an impact on the refund many taxpayers will receive when they file their 2018 tax return. The IRS encourages every employee, including those who typically receive big tax refunds, to do a “paycheck checkup” soon to ensure they have the appropriate amount of tax taken out of their pay.

TCJA changes that could have a big impact on tax refunds this year include:

Reduced tax rates and changed tax brackets.

Eliminated personal exemptions.

Increased standard deduction.

Expanded and increased Child Tax Credit.

A new credit for other dependents.

Some limited or discontinued deductions.

Do a ‘paycheck checkup’ soon

The IRS urges taxpayers to complete their “paycheck checkup” now so that if a withholding amount adjustment is necessary, there’s more time for withholding to take place evenly throughout the year. Waiting means there are fewer pay periods to withhold the necessary federal tax – so more tax will have to be withheld from each remaining paycheck.

Adjusting withholding can prevent taxpayers from having too little tax or too much withheld. Too little withheld could result in an unexpected tax bill or penalty at tax time in 2019.

Using the Withholding Calculator

It’s helpful if taxpayers have their completed 2017 tax return available when using the Withholding Calculator to estimate the amount of income, deductions, adjustments and credits to enter. Filers also need their most recent pay stubs to compute the employee’s withholding so far this year.

Calculator results depend on the accuracy of information entered. If a taxpayer’s personal circumstances change during the year, they should return to the calculator to check whether their withholding should be changed.

Employees can use the results from the Withholding Calculator to help determine if they should complete a new Form W-4 and, if so, what information to enter on a new Form W-4.

Taxpayers who change their withholding for 2018 should recheck their withholding at the start of 2019, especially those who reduced their withholding sometime in 2018. A mid-year withholding change in 2018 may have a different full-year impact in 2019. Taxpayers who do not file a new Form W-4 for 2019, may have a higher or lower withholding than intend. To help protect against having too little withheld in 2019, IRS encourages all filers to check their withholding again early in 2019.

The Withholding Calculator does not request personally-identifiable information, such as name, Social Security number, address or bank account number. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the Withholding Calculator or the information entered in it.

Adjusting withholding

Employees who need to complete a new Form W-4 should submit it to their employers as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances must submit a new Form W-4 with corrected withholding allowances to their employer within 10 days of the change.

Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state's department of revenue to learn more.

IRS.gov/getready has information about steps taxpayers can take now to get a jump on next year’s taxes, including how the new tax law may affect them.

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Tax Security 101: Tax professionals must maintain, protect EFINs; Monitor EFINs, PTINs and CAF numbers

WASHINGTON – The Internal Revenue Service and the Security Summit partners warned tax professionals that savvy cybercriminals target IRS-issued identification numbers to help impersonate practitioners as well as taxpayers.

To help protect against this threat used on the Dark Web, the IRS, state tax agencies and the tax industry reminded practitioners that they must maintain, monitor and protect their Electronic Filing Identification Numbers (EFINs) as well as keep tabs on their Preparer Tax Identification Numbers (PTINs) and Centralized Authorization File (CAF) numbers.

This is the sixth in a series called "Protect Your Clients; Protect Yourself: Tax Security 101." The Security Summit awareness campaign is intended to provide tax professionals with the basic information they need to better protect taxpayer data and to help prevent the filing of fraudulent tax returns.

Although the Security Summit -- a partnership between the IRS, states and the private-sector tax community -- is making progress against tax-related identity theft, cybercriminals continue to evolve, and data theft at tax professionals’ offices is on the rise. Thieves use stolen data from tax practitioners to create fraudulent returns that are harder to detect.

Cybercriminals sometimes post stolen EFINs, PTINs and CAF numbers on the Dark Web as a crime kit for identity thieves who can then file fraudulent tax returns. EFINs are necessary for tax professionals or their firms to file client returns electronically. PTINs are issued to those who, for a fee, prepare tax returns or claims for refund. CAF numbers are issued when tax practitioners or their firms file a request for third-party access to client files.

These identification numbers may only be obtained directly from the IRS.

Here’s what tax professionals can do to protect these important numbers from identity thieves:

Maintaining EFINs

Once a tax professional has completed the EFIN application process and received an EFIN, it is important that they keep their account up-to-date at all times. This includes:

Review the e-File application periodically. Tax professionals’ e-file application must be updated within 30 days of any changes such as individuals involved, addresses or telephone numbers. Failure to do so may result in the inactivation of an EFIN.

Ensure proper individuals are identified on the application, and update as necessary. The principal listed on the application is the individual authorized to act for the business in any legal or tax matters. Periodically access the account.

Add any new principals or responsible officials promptly.

Update any business address changes, including adding new locations.

EFINs are not transferable; if selling the businesses, the new principals must obtain their own EFIN.

There must be an EFIN application for each office location; for those expanding their business, an application is required for each location where e-file transmissions will occur.

Monitoring EFINs, PTINs and CAFs

Tax professionals can obtain a weekly report of the number of tax returns filed with their EFIN and PTIN. For PTIN holders, only those preparers who are attorneys, CPAs, enrolled agents or Annual Filing Season Program participants and who file 50 or more returns may obtain PTIN information. Weekly checks will help flag any abuses by cybercriminals. Here’s how:

For EFIN totals:

Access the e-Services account and the EFIN application;

Select “EFIN Status” from the application;

Contact the IRS e-help Desk if the return totals exceed the number of returns filed.

For PTIN totals:

Access the online PTIN account;

Select “View Returns Filed Per PTIN;”

Complete Form 14157, Complaint: Tax Return Preparer, to report excessive use or misuse of PTIN.

For those with a Centralized Authorization File (CAF) number, make sure to keep authorizations up to date. Tax professionals should make an annual review to identify outstanding third-party authorizations for people who are no longer their clients. It is important that tax professionals remove authorizations for taxpayers who are no longer their clients.

See “Withdrawal of Representation” in Publication 947, Practice Before the IRS and Power of Attorney. Information also is available in the instructions for Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, for additional information on withdrawing representation.

Protecting EFINs

The same good security habits for protecting client data also can protect the EFIN. Those include the use of strong anti-virus software, strong and unique passwords, two-factor authentication where available.

Learn to recognize and avoid phishing scams; do not open links or attachments from suspicious emails, most data thefts begin with a phishing email.

Secure all devices with security software and let it automatically update.

Use strong passwords of eight or more mixed characters; use phrases that are easily remembered and password protect all wireless devices.

Encrypt all sensitive files/emails and use strong password protections.

Backup sensitive data to a safe and secure external source not connected fulltime to the network.

Wipe clean or destroy old computer hard drives that contain sensitive data.

In addition to these steps, the Security Summit reminds all professional tax preparers that they must have a written data security plan as required by the Federal Trade Commission and its Safeguards Rule. They can get help with security recommendations by reviewing the recently revised IRS Publication 4557, Safeguarding Taxpayer Data, and Small Business Information Security: the Fundamentals by the National Institute of Standards and Technology.

Publication 5293, Data Security Resource Guide for Tax Professionals, provides a compilation of data theft information available on IRS.gov. Also, tax professionals should stay connected to the IRS through subscriptions to e-News for Tax Professionals, QuickAlerts and Social Media.

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Taxpayers who support dependents should check their withholding now

Taxpayers who support dependents that can’t be claimed for the child tax credit should head over to the Withholding Calculator on IRS.gov and do a “paycheck checkup” ASAP. They can use the calculator to make sure they are having their employers withhold the right amount of tax from their paychecks this year.

The Tax Cuts and Jobs Act, which was passed last year, added a new tax credit: the credit for other dependents. This new credit is just one law change that can affect a family’s tax situation this year. So, checking and adjusting withholding now is important to do because it can prevent an unexpected tax bill and even penalties next year at tax time.

The Credit for Other Dependents is available for dependents for whom taxpayers cannot claim the newly expanded Child Tax Credit. These dependents may include dependent children who are age 17 or older at the end of 2018, or parents or other qualifying relatives supported by the taxpayer. Families with qualifying children under the age of 17 should first review their eligibility for the expanded Child Tax Credit, which is larger. The new credit:

Offers up to $500 per eligible dependent.

Begins to phase out at $400,000 for joint filers, and $200,000 for other taxpayers.

If a taxpayer needs to adjust their paycheck withholding amount, doing so sooner rather than later means there’s more time for withholding to take place evenly throughout the year. Waiting until later means there are fewer pay periods to make the tax changes.

The Withholding Calculator is the most accurate way for most taxpayers to help determine their correct withholding amount. The tool allows taxpayers to enter their expected 2018 income, deductions, adjustments and credits – including the new credit for other dependents.

For information about how to use the calculator and how to change withholding, taxpayers can check out the IRS Tax Reform Tax Tips on IRS.gov. Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state's department of revenue to learn more.

More information: Withholding Calculator Frequently Asked Questions Tax Withholding Tax Reform page on IRS.gov

Share this tip on social media -- #IRSTaxTip: IRS urges taxpayers with high income, complex returns to check withholding. https://go.usa.gov/xU6X9

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IRS issues proposed regulations on new 20 percent deduction for passthrough businesses

WASHINGTON — The Internal Revenue Service issued proposed regulations today for a new provision allowing many owners of sole proprietorships, partnerships, trusts and S corporations to deduct 20 percent of their qualified business income.

The new deduction -- referred to as the Section 199A deduction or the deduction for qualified business income -- was created by the Tax Cuts and Jobs Act. The deduction is available for tax years beginning after Dec. 31, 2017. Eligible taxpayers can claim it for the first time on the 2018 federal income tax return they file next year.

The deduction is generally available to eligible taxpayers whose 2018 taxable incomes fall below $315,000 for joint returns and $157,500 for other taxpayers. It’s generally equal to the lesser of 20 percent of their qualified business income plus 20 percent of their qualified real estate investment trust dividends and qualified publicly traded partnership income or 20 percent of taxable income minus net capital gains.

Deductions for taxpayers above the $157,500/$315,000 taxable income thresholds may be limited. Those limitations are fully described in the proposed regulations.

Qualified business income includes domestic income from a trade or business. Employee wages, capital gain, interest and dividend income are excluded.

In addition, Notice 2018-64, also issued today, provides methods for calculating Form W-2 wages for purposes of the limitations on this deduction. More information may be found at www.IRS.gov.

Taxpayers may rely on the rules in these proposed regulations until final regulations are published in the Federal Register.

Written or electronic comments and requests for a public hearing on this proposed regulation must be received within 45 days of publication in the Federal Register

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IRS issues proposed regulations on new 20 percent deduction for passthrough businesses

WASHINGTON — The Internal Revenue Service issued proposed regulations today for a new provision allowing many owners of sole proprietorships, partnerships, trusts and S corporations to deduct 20 percent of their qualified business income.

The new deduction -- referred to as the Section 199A deduction or the deduction for qualified business income -- was created by the Tax Cuts and Jobs Act. The deduction is available for tax years beginning after Dec. 31, 2017. Eligible taxpayers can claim it for the first time on the 2018 federal income tax return they file next year.

The deduction is generally available to eligible taxpayers whose 2018 taxable incomes fall below $315,000 for joint returns and $157,500 for other taxpayers. It’s generally equal to the lesser of 20 percent of their qualified business income plus 20 percent of their qualified real estate investment trust dividends and qualified publicly traded partnership income or 20 percent of taxable income minus net capital gains.

Deductions for taxpayers above the $157,500/$315,000 taxable income thresholds may be limited. Those limitations are fully described in the proposed regulations.

Qualified business income includes domestic income from a trade or business. Employee wages, capital gain, interest and dividend income are excluded.

In addition, Notice 2018-64, also issued today, provides methods for calculating Form W-2 wages for purposes of the limitations on this deduction. More information may be found at www.IRS.gov.

Taxpayers may rely on the rules in these proposed regulations until final regulations are published in the Federal Register.

Written or electronic comments and requests for a public hearing on this proposed regulation must be received within 45 days of publication in the Federal Register

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Tips for extension filers

The IRS reminds taxpayers who requested an extra six months to file their 2017 tax return that Monday, October 15, 2018, is the extension deadline for most taxpayers.

For taxpayers who have not yet filed, here are a few tips to keep in mind about the extension deadline and taxes:

Taxpayers can still e-file returns for free using IRS Free File. The program is available only on IRS.gov. Filing electronically is the easiest, safest and most accurate way to file taxes.

For taxpayers owed a refund, the fastest way to get it is to combine direct deposit and e-file.

Taxpayers who owe taxes should consider using IRS Direct Pay. It’s a simple, quick and free way to pay from a checking or savings account using a computer or mobile device. There are also other online payment options.

Members of the military and those serving in a combat zone generally get more time to file. Military members typically have until at least 180 days after leaving a combat zone to both file returns and pay any tax due.

The IRS recommends that taxpayers always keep a copy of tax returns for their records. Keeping copies of tax returns can help taxpayers prepare future tax returns or assist with amending a prior year’s return.

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DOJ reaches agreement with The Pawn Shop to ensure equal access for individuals with disabilities who use service dogs

The Justice Department reached an agreement under the Americans with Disabilities Act (ADA) with The Pawn Shop and Tax Service, Inc., (The Pawn Shop) in Pensacola, Florida to resolve a complaint under title III of the ADA.  The Department's investigation found that the manager of The Pawn Shop asked a veteran who uses a service dog to leave because the manager mistakenly believed the dog was a pet, not a service dog.  Public accommodations must permit Individuals who use service dogs, including veterans with disabilities who use service dogs for disabilities such as post-traumatic stress disorder, anxiety, or mobility disabilities, into their establishments.

The settlement agreement requires The Pawn Shop to adopt and implement a service dog policy consistent with the ADA; provide training on the service dog policy to employees and managers; and post the service dog policy in the Shop and on social media. The Pawn Shop cooperated with the Department throughout the investigation.

People interested in finding out more about the ADA or this agreement can call the toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TDD), or access the ADA website at https://www.ada.gov.

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Here’s how the IRS contacts taxpayers

Everyone should know how the IRS contacts taxpayers. This will help people avoid becoming a victim of scammers who pretend to be from the IRS with a goal of stealing personal information. Here are some facts about how the IRS communicates with taxpayers:

The IRS doesn't normally initiate contact with taxpayers by email.

The agency does not send text messages or contact people through social media.

When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service.  Fraudsters will send fake documents through the mail, and in some cases will claim they already notified a taxpayer by U.S. mail.

Depending on the situation, IRS employees may first call or visit with a taxpayer. In some instances, the IRS sends a letter or written notice to a taxpayer in advance, but not always.

IRS revenue agents or tax compliance officers may call a taxpayer or tax professional after mailing a notice to confirm an appointment or to discuss items for a scheduled audit.

Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice.

IRS revenue officers and agents routinely make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed, delinquent tax returns or a business falling behind on payroll tax deposits. IRS revenue officers will request payment of taxes owed by the taxpayer. However, taxpayers should remember that payment will never be requested to a source other than the U.S. Treasury.

When visited by someone from the IRS, the taxpayers should always ask for credentials. IRS representatives can always provide two forms of official credentials: a pocket commission and a Personal Identity Verification Credential.

More Information:

IRS Taxpayers Bill of Rights

Secure tax payment options

Consumer alerts

Report phishing and online scams

Phone scams

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Form 1040 Redesign

The IRS released the newly redesigned 2018 Form 1040 and associated schedules on June 29, 2018. The redesigned Form 1040, about half the size of the 2017 (current) version, will also replace the Form 1040A and 1040EZ for the upcoming 2019 filing season.

The 2018 Form 1040 has been streamlined to only include the five most common types of income, federal withholding, EITC, Additional Child Tax Credit and the Education Credit. The detail for all other types of income, adjustments to income, nonrefundable, refundable credits, other payments and other taxes that exist on the current Form 1040 have been moved to one of six new schedules:

                Schedule 1 (Additional Income and Adjustments to Income)                  

                Schedule 2 (Tax) – Includes all lines that are used to calculate total tax such as the regular tax, tax on child’s unearned income, alternative minimum tax, etc.

                Schedule 3 (Nonrefundable Credits) – Includes all nonrefundable credits such as credit for child and dependent care expenses, education credits, child tax credit and the new credit for other dependents, etc.

                Schedule 4  (Other Taxes) – Includes all other taxes such as self-employment tax, household employment tax, etc.

                Schedule 5 (Other Payments and Refundable Credits) – Includes the lines for other payments and refundable credits such as extension payment, credit for federal tax on fuels, etc.

                Schedule 6 (Foreign Address and Third Party Designee) - Where foreign address and third party designee information is shown if they are applicable.

                                  Includes the remaining income types such as from Schedule C, D, E and F, unemployment compensation, etc. that were shown on the current Form 1040.

                  All adjustments to income such as Educator expenses, IRA contributions, student loan interest, etc.

                 The IRS has explained that the version of the newly redesigned form released on June 29 is a pre-release draft and the IRS will be working with the tax community to finalize the Form 1040 over the summer. The final version of the form will be released towards the end of this year.

The draft of the 2018 Form 1040 also includes changes that are a result of the Tax Cuts and Jobs Act such as:

                Removal of exemption amount boxes and the total exemptions line.

                Addition of check box for the new credit for other dependents for each dependent.

                New line 9 for the new qualified business income deduction (20% deduction for pass-through business income – Sec 199A).

               For additional information on the redesign of the Form 1040 see IRS news release -– IRS Working on a New Form 1040 for 2019 Tax Season.

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Veterans owed refunds for overpayments attributable to disability severance payments should file amended returns to claim tax refunds

WASHINGTON — The Internal Revenue Service today is advising certain veterans who received disability severance payments after January 17, 1991, and included that payment as income that they should file Form 1040X, Amended U.S. Individual Income Tax Return, to claim a credit or refund of the overpayment attributable to the disability severance payment.

This is a result of the Combat-Injured Veterans Tax Fairness Act passed in 2016.

Most veterans who received a one-time lump-sum disability severance payment when they separated from their military service will receive a letter from the Department of Defense with information explaining how to claim tax refunds they are entitled to; the letters include an explanation of a simplified method for making the claim. The IRS has worked closely with the DoD to produce these letters, explaining how veterans should claim the related tax refunds.

Statute of Limitations

The amount of time for claiming these tax refunds is limited. However, the law grants veterans an alternative timeframe – one year from the date of the letter from DoD. Veterans making these claims have the normal limitations period for claiming a refund or one year from the date of their letter from the DoD, whichever expires later. As taxpayers can usually only claim tax refunds within 3 years from the due date of the return, this alternative time frame is especially important since some of the claims may be for refunds of taxes paid as far back as 1991.

Amount to Claim

Veterans can submit a claim based on the actual amount of their disability severance payment by completing Form 1040X, carefully following the instructions. However, there is a simplified method. Veterans can choose instead to claim a standard refund amount based on the calendar year (an individual’s tax year) in which they received the severance payment. Write “Disability Severance Payment” on line 15 of Form 1040X and enter on lines 15 and 22 the standard refund amount listed below that applies:

$1,750 for tax years 1991 – 2005

$2,400 for tax years 2006 – 2010

$3,200 for tax years 2011 – 2016

Claiming the standard refund amount is the easiest way for veterans to claim a refund, because they do not need to access the original tax return from the year of their lump-sum disability severance payment.

Special Instructions

All veterans claiming refunds for overpayments attributable to their lump-sum disability severance payments should write either “Veteran Disability Severance” or “St. Clair Claim” across the top of the front page of the Form 1040X that they file. Because all amended returns are filed on paper, veterans should mail their completed Form 1040X, with a copy of the DoD letter, to:

Internal Revenue Service 333 W. Pershing Street, Stop 6503, P5 Kansas City, MO  64108

Veterans eligible for a refund who did not receive a letter from DoD may still file Form 1040X to claim a refund but must include both of the following to verify the disability severance payment:

A copy of documentation showing the exact amount of and reason for the disability severance payment, such as a letter from the Defense Finance and Accounting Services (DFAS) explaining the severance payment at the time of the payment or a Form DD-214, and

A copy of either the VA determination letter confirming the veteran’s disability or a determination that the veteran’s injury or sickness was either incurred as a direct result of armed conflict, while in extra-hazardous service, or in simulated war exercises, or was caused by an instrumentality of war.

Veterans who did not receive the DoD letter and who do not have the required documentation showing the exact amount of and reason for their disability severance payment will need to obtain the necessary proof by contacting the

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Taxpayers can visit IRS.gov for tools to help with a wide range of tax topics

Finding answers to tax questions is only a few key clicks away. Millions of taxpayers use the following self-help tools on IRS.gov to easily find what they need:

IRS Free File. Taxpayers with an extension of time to file their return until October 15 can use IRS Free File to prepare and e-file their tax return. Free File allows them to use brand-name commercial tax software at no cost. It is available for anyone with income below $64,000.

Where’s My Refund? Taxpayers waiting for their refund can use Where's My Refund? to check the status of a refund. This tool is available at IRS.gov or the IRS2Go mobile app. Refund updates are available within 24 hours after the IRS receives the e-filed return or four weeks after the agency receives a mailed paper return.

Paying a tax bill. IRS Direct Pay is the safe, easy and free way to pay taxes or estimated tax directly from a checking or savings account. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out. The Direct Pay tool has five simple steps to pay in a single online session and is also available with the IRS2Go mobile app.

Tax account online. Taxpayers can use this tool to view their federal tax account balance, select IRS Direct Pay, debit or credit card or apply for an installment agreement. Before accessing their tax account online, taxpayers must authenticate their identity through the secure access process.

Online payment agreement. Taxpayers who can’t pay their taxes in full can apply for an online payment agreement. Using the Direct Debit payment plan option allows certain taxpayers to make monthly payments.

Interactive tax assistant. Taxpayers can find reliable answers to tax questions with the interactive tax assistant. This tax law resource asks a series of questions and immediately provides answers on a variety of tax law topics.

Exempt organizations tool. Anyone looking to make a charitable donation can use the tax exempt organization search tool. This tool allows users to search for and verify a charity’s status. The results include links to check each organization’s federal tax status and filings.

Tax map. Taxpayers can use the IRS tax map to quickly find forms, publications, frequently asked questions and news.

More Information:

Tax Topic 152, Refund information

Tax Topic 161, Returning an erroneous refund – paper check or direct deposit

Tax Topic 203, Refund offsets for unpaid child support, certain federal and state debts, and unemployment compensation debts

Share this tip on social media -- #IRSTaxTip: Taxpayers can visit IRS.gov for tools to help with a wide range of tax topics https://go.usa.gov/xUKQE

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3 Essential Rules For Every Aggressive Growth Investor

Every intelligent investor's portfolio must devote assets to aggressive growth.

No exceptions.

Because finding a winning aggressive growth stock isn't easy, I want to share with you how I do it...

I look for companies with products, technologies or other innovations that materially change the baseline assumptions for doing business in an industry.

These are the companies seeking to hit one out of the park by finding The Next Big Thing.

You see, I have a knack for this. I don't mean to brag, but in my years with StreetAuthority, I've picked more triple-digit gainers than just about any other analyst.

A few years ago, for example, I recommended AuthenTec, a company beginning to dominate the market for biometric readers -- fingerprint scanners on personal electronic devices.

Not too long afterward, Apple agreed to buy the company.

Readers who followed my advice saw a total gain of 228%.

Another example: CalAmp (Nasdaq: CAMP), a maker of wireless communications hardware, rose 290% after I recommended it.

That's just the tip of the iceberg.

And I've done it by following three simple rules that any investor can follow.

Rule No. 1: Be realistic to the point of hyper-rationality I lost track years ago of how many clinical trials I've read about various drugs.

But do you know something? At the end of every report, I wanted to buy every one of the stocks behind those drugs. The studies are detailed and educational. They set up the problem and then offer a unique solution. The science, the explanation, the data and the financials are always very appealing.

But these early-stage drug-development companies are very risky. Heck, they are damn risky. No matter how good the initial trials look, there is no guarantee of approval, and a negative action by the Food and Drug Administration can cut a small drug company's stock price in half quicker than you can say Jack Robinson.

The other side of that coin, of course, is that the FDA (or one of its international counterparts) could rule in the drug's favor, in which case the little company's stock price chart resembles a space shuttle launch.

Now, the world's leading drug companies spend tens of BILLIONS a year looking for new drugs. But the FDA may only approve, say, 50 new drugs in a given year. But according to the Pharmaceutical Research and Manufacturers of America, only 1 in 10,000 of the compounds studied by drug companies becomes a product for sale on the pharmacy shelf.

How does an investor mitigate this risk? Research, research and more research.

I began my career as a journalist, and I learned there was no substitute for good old-fashioned shoe-leather reporting.

Aggressive growth investors must cut through all the hype. They must prosecute every claim. They must use facts and hard data to quantify a stock's likelihood to head skyward.

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IRS working on a new Form 1040 for 2019 tax season

WASHINGTON — As part of a larger effort to help taxpayers, the Internal Revenue Service plans to streamline the Form 1040 into a shorter, simpler form for the 2019 tax season.

The new 1040 – about half the size of the current version -- would replace the current Form 1040 as well as the Form 1040A and the Form 1040EZ.  The IRS circulated a copy of the new form and will work with the tax community to finalize the streamlined Form 1040 over the summer.

This new approach will simplify the 1040 so that all 150 million taxpayers can use the same form. The new form consolidates the three versions of the 1040 into one simple form. At the same time, the IRS will still obtain the information from each taxpayer needed to determine their tax liability or refund. 

The new Form 1040 uses a “building block” approach, in which the tax return is reduced to a simple form. That form can be supplemented with additional schedules if needed. Taxpayers with straightforward tax situations would only need to file this new 1040 with no additional schedules.

Since more than nine out of 10 taxpayers use software or a tax preparer, the IRS will be working with the tax community to prepare for the streamlined Form 1040. This will also help ensure a smooth transition for people familiar with software products and the interview process used to prepare tax returns.

Taxpayers who file on paper would use this new streamlined Form 1040 and supplement it with any needed schedules.

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Taxpayers who owed tax this year should check their withholding soon

Taxpayers who owed additional tax when they filed their federal return earlier this year should do a “paycheck checkup” as soon as possible. The IRS Withholding Calculator and Publication 505, Tax Withholding and Estimated Tax, can help these taxpayers do a checkup and avoid another possibly bigger tax bill next year.

Following the Tax Cuts and Jobs Act, which was passed last year, there are many changes to the tax law that could affect these taxpayers. Doing a checkup now will help them make sure their current tax withholding is in line with their 2018 tax situation.

Here are some things for these taxpayers to keep in mind:

These taxpayers may not have had enough taxes withheld from their pay throughout 2017, causing them to owe in 2018.

If they continue to have too little withheld from their paychecks the rest of this year, they could find themselves in the same situation again next year.

They might even end up with a larger tax bill when they file their 2018 return next year.

It’s important to remember that if a taxpayer underpays their tax too much, penalties and interest can apply.

The Withholding Calculator can help taxpayers apply the new law to their situation. The results from the calculator can help them make an informed decision about whether to change their withholding this year.

These taxpayers need to adjust their withholding as soon as possible for an even withholding amount throughout the rest of the year.

Waiting means there are fewer pay periods to withhold the necessary federal tax, which could have a bigger effect on each paycheck.

Taxpayers with more complex situations might find that using Publication 505 is a better option for figuring their withholding than using the Withholding Calculator. Publication 505 works better for employees who owe self-employment tax, the alternative minimum tax, or tax on unearned income from dependents. It can also help those who receive non-wage income such as dividends, capital gains, rents and royalties.

More information:

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Taxpayers can sign up to receive IRS email subscription services

The IRS issues tax information by email for many different audiences. Here are some of the electronic subscriptions people can request by visiting the e-News Subscriptions page on IRS.gov:

Guidewire: People who sign up for Guidewire receive email notifications when the IRS issues advance copies of tax guidance, such as regulations, revenue rulings, revenue procedures, announcements, and notices.

e-News for Tax Professionals: Provides the latest national news for the tax professional community, as well as links to resources on IRS.gov and local news and events by state.

Outreach Corner:  Provides organizations such as businesses and non-profits articles content that they can use in their own communication products and newsletters.

Tax Statistics: Supplies information about the most recent tax statistics.

Quick Alerts: Provides tax professionals and tax software providers with the latest information about e-file issues and events.

IRS Newswire: Provides news releases issued by IRS National Media Relations Office in Washington, DC.

Here are some other electronic subscriptions the IRS offers:

Alerts from Office of Professional Responsibility

e-News for IRS Continuing Education Providers

Modernized e-File News for Partnerships

e-News for Payroll Professionals

e-News for Small Business

e-File News for Large Businesses

Foreign Accountant Tax Compliance Act News & Information

Employee Plans

Indian Tribal Governments News

Tax Exempt Bond Community Update

Exempt Organization Update

Federal State & Local Governments

The IRS also offers Consejos Tributarios del IRS, a newsletter in Spanish.

Share this tip on social media -- #IRSTaxTip: Taxpayers can sign up to receive IRS email subscription services. https://go.usa.gov/xUq7y

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The Advisory Committee on Tax Exempt and Government Entities (ACT) Final Report

The 10 members of the ACT presented their 2018 report to the IRS in a public meeting in Washington, DC on June 7, 2018, on five issues:

Employee Plans: Recommendations regarding the re-opening of the IRS Determination Letter Program

Employee Plans: Recommendations regarding missing participants in retirement plans

Exempt Organizations: Recommendations regarding incentivizing universal e-filing for Forms 990

Indian Tribal Governments: Recommendations regarding sharing of taxpayer information with tribal government tax programs

Tax Exempt Bonds: Recommendations regarding encouraging self-compliance by issuers of tax-advantaged obligations/tax exempt bonds

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Interest rates remain the same in the third quarter of 2018

WASHINGTON ―The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning July 1, 2018, as they were in the quarter that began on April 1. The rates will be: 

5 percent for overpayments, 4 percent in the case of a corporation;

5 percent for the portion of a corporate overpayment exceeding $10,000;

5 percent for underpayments; and

7 percent for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. 

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus 0.5 of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during April 2018 to take effect May 1, 2018, based on daily compounding.

Revenue Ruling 2018-18, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2018-26, dated June 25, 2018.