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US Tax Practice Switzerland
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Farmers, fishermen and Tax deadline:
The IRS reminds farmers and fishermen who chose to forgo making quarterly estimated tax payments that they must file their 2018 Form 1040 along with a payment for all taxes owed by Friday, March 1, 2019.

This special rule normally applies to taxpayers whose farming or fishing income was at least two-thirds of their total gross income in either the current or the preceding tax year. Farmers and fishermen choosing not to file by March 1 should have made an estimated tax payment by Jan. 15 to avoid a penalty.
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Child Tax Credit after Tax Reform:
• Credit amount. The new law increases the child tax credit from $1,000 to $2,000. Eligibility for the credit has not changed.
• Credit refunds. The credit is refundable, now up to $1,400. If a taxpayer doesn’t owe any tax before claiming the credit, they will receive up to $1,400 as part of their refund.
• Earned income threshold. The income threshold to claim the credit has been lowered to $2,500 per family. This means a family must earn a minimum of $2,500 to claim the credit.
• Phaseout. The income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly. This means that more families with children younger than 17 qualify for the larger credit.
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Earned Income Tax Credit:
The earned income tax credit (EITC) benefits low to moderate income people and families. The credit can lower the tax someone owes or mean a refund for the taxpayer.
Review the eligibility:
• Taxpayers must have earned income of $54,884 or less.
• Taxpayers must file a federal tax return claiming the credit even if no tax is due and filing a return is not otherwise required.
• Even if they didn’t qualify for the EITC in the past, filers should review EITC eligibility if their household income or family situation has changed.
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IRS issues standard mileage rates for 2019:
The IRS issued the 2019 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, 2019, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
• 58 cents per mile driven for business use, up 3.5 cents from the rate for 2018,

• 20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018, and

• 14 cents per mile driven in service of charitable organizations.
The business mileage rate increased 3.5 cents for business travel driven and 2 cents for medical and certain moving expense from the rates for 2018. The charitable rate is set by statute and remains unchanged.
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Interest Rates Increase:
The IRS announced that interest rates will increase for the calendar quarter beginning January 1, 2019. The rates will be:
• six (6) percent for overpayments [five (5) percent in the case of a corporation];
• three and one-half (3.5) percent for the portion of a corporate overpayment exceeding $10,000;
• six (6) percent for underpayments; and
• eight (8) 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.
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Employee Achievement Award Rules:
Under the Tax Cuts and Jobs Act:
• There is now a prohibition on cash, gift cards and other non-tangible personal property as employee achievement awards.

• Special rules allow an employee to exclude certain achievement awards from their wages if the awards are tangible personal property.

• The new law clarifies that tangible personal property doesn’t include cash, cash equivalents, gift cards, gift coupons, certain gift certificates, tickets to theater or sporting events, vacations, meals, lodging, stocks, bonds, securities, and other similar items.
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Child Tax Credit after Tax Reform:
• Credit amount. The new law increases the child tax credit from $1,000 to $2,000. Eligibility for the credit has not changed.
• Credit refunds. The credit is refundable, now up to $1,400. If a taxpayer doesn’t owe any tax before claiming the credit, they will receive up to $1,400 as part of their refund.
• Earned income threshold. The income threshold to claim the credit has been lowered to $2,500 per family. This means a family must earn a minimum of $2,500 to claim the credit.
• Phaseout. The income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly. This means that more families with children younger than 17 qualify for the larger credit.
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Errors to Avoid when Filing a Tax Return:
Here are common errors to avoid:
• Missing or inaccurate Social Security Numbers.
• Misspelled names - Spell all names listed on a tax return exactly as listed on the taxpayers’ Social Security cards.
• Filing status - Some taxpayers claim the wrong filing status, such as Head of Household instead of Single.
• Incorrect bank account numbers - Taxpayers who are due a refund should choose direct deposit for ease and convenience, but the IRS cautions taxpayers to use the right routing and account numbers on the tax return.
• Unsigned forms - An unsigned tax return isn’t valid. Both spouses must sign a joint return. Taxpayers can avoid this error by filing their return electronically and digitally signing it before sending it to the IRS.
• Figuring credits or deductions - Taxpayers can make mistakes figuring their Earned Income Tax Credit, Child and Dependent Care Credit, the standard deduction and other items.
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