One of the changes to itemized deductions because of the Tax Cuts and Jobs Act of 2017 was the suspension of the deduction on interest on up to $100,000 of home equity indebtedness. The Internal Revenue Service announced that in many cases taxpayers will be able to continue deducting interest paid on home equity loans.

Prior to the Tax Cuts and Jobs Act, taxpayers were able to deduct interest on up to $1 million in mortgage debt and also up to $100,000 of home equity debt. Under the new law, taxpayers are now limited to $750,000 of home acquisition debt with no separate carve out for home equity debt. However, tax filers with mortgage debt taken out prior to December 14, 2017, are still allowed to deduct interest on up to $1 million in mortgage debt (not inclusive of home equity debt).

So, how do you determine if interest on home equity debt is deductible for tax years beginning after 2017? Here are a couple of guidelines:

• If the home equity debt was used to buy, build or substantially improve the taxpayer’s home then the interest will usually be deductible.
• The home equity debt must be secured by the taxpayer’s main home or second home.
• The total of all combined home acquisition debt for qualified residences cannot exceed $750,000. If debt exceeds $750,000, the taxpayer will only be allowed to take a percentage of total interest paid.
• If the home equity proceeds were used for items other than buying, building or improving the taxpayer’s home then the interest will not be deductible.

It is good to see that interest on home equity debt is still available for deduction. Check the IRS’ announcement for some examples to illustrate the new limits.

Right before this year’s tax deadline, the IRS put out a release reminding people that some of us may not have to ask for an extension. While this advice is coming a bit late from me for the current tax year, it is definitely something to keep in mind. As the IRS notes “Taxpayers in Presidentially-declared disaster areas, members of the military serving in a combat zone and Americans living and working abroad get extra time to both file their returns and pay any taxes due.”

If you are a taxpayer in a disaster area you will often have extended time to file and pay. These extensions of time also apply to other tax-related items like contributing to an IRA. The IRS states that generally any area given a disaster declaration by FEMA is provided this relief, which is extended to relief workers, businesses and anyone who has their tax records located in the disaster area.

If you are a member of the military or eligible support personnel serving in a combat zone you will have at least 180 days after you leave the combat zone to file your tax returns and pay your taxes. As with the disaster relief, this extension also pertains to other tax-related items like contributing to your IRA. The IRS suggest checking Publication 3, Armed Forces’ Tax Guide, for further details.

For U.S. citizens and resident aliens who are living and working outside the United States and Puerto Rico, you have until June 15, 2017 (for the current tax year) to file your return and pay any taxes due. This also applies for military members on duty outside the U.S. who do not qualify for the combat zone extension. The IRS does note two items with this category of extended filing: 1) Attach a statement with your return explaining which situation applies for you; and 2) interest still applies to payments received after the standard filing deadline (generally April 15). See Publication 54 for more information.

For everyone else, just remember to ask for more time by filing Form 4868.

The IRS is warning that con artists are using video relay services (VRS) as a way of potentially scamming deaf and hard of hearing individuals. It appears these bad actors are using VRS just like many of the other phone and email scams that are constantly being reported. These people will call claiming to be from the IRS and demand payment of a tax debt or say that the taxpayer is due a refund. Simply, these scammers are looking for personal information. As always, do not give out personal and financial information to anyone you do not know and confirm that the person requesting information really is who they claim to be. The IRS adds that people should not assume they can trust VRS calls as VRS interpreters do not screen calls for validity.

As listed on IRS.gov, the IRS will never:

• Demand immediate payment and require the payment be made a specific way, such as by prepaid debit card, gift card or wire transfer. In most cases, the IRS will not call taxpayers about taxes owed without first having mailed a letter to the taxpayer.
• Threaten that local police or other law-enforcement groups will immediately arrest taxpayers for not paying a tax bill.
• Demand that taxpayers pay taxes without giving them the opportunity to question or appeal the amount owed.
• Ask for credit or debit card numbers over the phone.

If a deaf or hard of hearing individual suspects they received one of these calls, they should call the Treasury Inspector General for Tax Administration (TIGTA) at 800-366-4484. The IRS now accepts calls from all type of relay services whether they are federal, state or private relay providers. The IRS also has YouTube videos in American Sign Language (ASL) with a listing that can be found here. A YouTube video in ASL about this VRS scam is also available.

When I think of 7-Eleven I think of Slurpees. When I think of the IRS, well, I don’t think of Slurpees. Now, thanks to a partnership between the IRS, ACI WorldWide’s OfficialPayments.com and the PayNearMe Company, we can all pay our taxes at over 7,000 7-Eleven stores throughout the USA and pick up that Slurpee while we’re there. The bonus here is no bank account or credit cards are needed as you can now pay in cash. The IRS can now literally nickel and dime us (though I’m not sure the 7-Eleven will be so happy with all that change).

“We continue to look for new ways to provide services for our taxpayers. Taxpayers have many options to pay their tax bills by direct debit, a check or a credit card, but this provides a new way for people who can only pay their taxes in cash without having to travel to an IRS Taxpayer Assistance Center,” IRS Commissioner John Koskinen said in statement released on Wednesday.

Individuals who want to use this payment option should head to IRS.gov payments page and click on the “Cash” hyperlink in the “Other Ways You Can Pay” section. There are a few things to be aware of to make sure you can pay your entire tax bill and that you pay on time. First, the payment limit per day is $1,000 and there is a $3.99 fee per payment. Second, the payment may take a few days to post to your account, so make sure you pay before the tax deadline in order to ensure the payment is received timely. Also, make sure you’ve initiated this payment online as you can’t just walk into a 7-Eleven without a payment code. Other than that, there doesn’t seem to be too much to this process and remember – don’t drink that Slurpee to fast or you’ll get a brain freeze.

Another tax filing season means another season of opportunities for tax fraud. And to add insult to last year’s injury, some of the same people who were victims of the IRS’ data breach are being victimized once again.

Brian Krebs of KrebsOnSecurity is reporting the Identity Protection (IP) PIN the IRS sent out to those affected by last year’s “Get Transcript” fraud has the potential of being obtained by those who are not you (i.e. fraudsters). The PIN is initially sent to a person who has been a victim of fraud in the mail. This isn’t where fraudsters are obtaining the PIN. The point of attack is actually back with the IRS on the “Retrieve Your Lost or Misplaced IP PIN” portion of their website. As often happens in this day and age of too many passwords to remember, people misplace or forget their IP PIN. The IRS has created an electronic way to retrieve this PIN, but the system uses the same retrieval method that allowed the “Get Transcript” fraud. The system uses knowledge-based authentication which will have you answer four questions from the credit bureau Equifax. These questions will be something in the ballpark of your previous address, loan amounts and other questions of a similar nature. The problem is the answers to these questions are easy to guess especially since a taxpayer who is using an IP PIN already had their information compromised. A good question is why is the IRS using the same authentication system that caused issues last year?

Additionally, more good news out of the IRS is further review of the “Get Transcript” incident from 2015 has identified an additional 390,000 taxpayer accounts that had potential access. This brings the total number of affected taxpayers to somewhere over 700,000. Not necessarily all had fraudulent returns filed, luckily, but those taxpayers will now most likely have to deal with the IP PIN. Not all is doom and gloom, though. KrebsOnSecurity does have a handy write-up on things you can do to keep yourself from being a victim of tax fraud.

The past couple of weeks have produced some interesting headlines for Tesla, with headlines from the last couple of days even driving the price of Tesla’s stock down. On Tuesday, October 20, 2015, Consumer Reports released results from its Annual Auto Reliability Survey which forecasted Tesla’s Model S as likely to have a worse-than-average overall problem rate. This also meant the Model S did not receive Consumer Reports’ recommended designation. This loss of recommended status drove Tesla’s stock price down as much as 11% on Tuesday. There is nuance in Consumer Reports’ write-up of the Model S, though. While there was an assortment of complaints and potential reliability problems listed for the Model S, there was also high satisfaction among the 1,400 survey responses with 97% of owners saying the would definitely buy the car again. Anecdotally, if you read the comments on the Consumer Reports article you will find many a self-proclaimed Tesla owner saying they are quite happy with what they bought.

Then on Wednesday, October 21, 2015, news stories started popping up that Tesla’s recent over-the-air update that brought autopilot to many of its cars is causing close calls for some Tesla owners. Or rather, Tesla owners are causing their own close calls by not fully understanding that this autopilot function is still in beta and is not supposed to be used with your hands off the wheel. This update didn’t turn the Model S into a self-driving car. Hopefully no one injures himself or herself in the pursuit of curiosity.

Lastly, Tesla and the Reno Gazette-Journal (RGJ) are in a potentially interesting legal situation with a mix of he said, she said going on. On October 9, an incident occurred out at the Gigafactory where two RGJ employees were caught allegedly trespassing on Tesla owned property, a scuffle of some sort ensued and one of the RGJ employees was arrested by the Storey County Sheriff’s Department. Interestingly, on October 13, Tesla released its version of events which placed all the blame on the RGJ employees (maybe rightfully so) and stated that the security guards responding were injured by the RGJ employees. Then, on October 19, a lawyer for the RGJ, Scott Glogovac, sent a letter to Tesla claiming “[t]his portrayal is scandalous and could not be further from the truth.” Glogovac claims the security guards rammed the RGJ vehicle with an ATV, smashed a window, cut a seatbelt and dragged an RGJ employee from the vehicle. Maybe the RGJ employees weren’t the only ones at fault. Who knows where the truth lies, but this may be an interesting local event to follow.

On May 26th the Internal Revenue Service announced that more than 100,000 accounts from the “Get Transcript” application had been accessed by unauthorized individuals (i.e. criminals). The data stolen consisted of Social Security information, dates of birth and street addresses along with prior year tax transcripts. Access to the Get Transcript application has been disabled, but the damage has been done for the more than 100,000 taxpayers that had information stolen.

The IRS has said their systems were not actually hacked, but rather the criminals gained access to individuals’ tax data through personal information already in their possession. One of the many previous breaches of our personal data has left plenty of information in the hands of these less than savory characters. Even though the Get Transcript application requires users to answer several personal questions, the information already floating around out there in the dark corners of the internet allowed these criminals to successfully answer the “challenge” questions that allow people to access prior year tax transcripts.

The bummer about all of this is the inconvenience and headache this will cause those taxpayers who are affected. Additionally, the head of the IRS, John Koskinen, told Congress that up to $39 million has been stolen due to the criminals filing fraudulent tax returns with information obtained from the data breach. The Commissioner also went on to say that these cyber-criminals made about 200,000 attempts to get taxpayer data, so this wasn’t a one time smash and grab attack. To add insult to injury, the Treasury Inspector General J. Russell George told Congress that the IRS had not acted on recommended security improvements that would have made the cyber-criminals attempts more difficult. And oh yeah – the IRS is also running 19-year old security software and still runs Windows XP. Microsoft stopped supporting Windows XP a year ago and it has been wide open to hacking attacks ever since.

The IRS will be sending letters to the approximately 200,000 taxpayers whose accounts had attempted unauthorized accesses. For the more than 100,000 taxpayers whose accounts were accessed, the IRS will be offering free credit monitoring. Affected taxpayers will also have will have additional flags on their IRS accounts to hopefully detect any potential fraud.

As my mind is busy with other things in life, I thought I’d buzz through some of the week’s events I have found interesting. And as much as the royal baby is cute, I won’t spend any more time on that subject.

This week saw the American celebration of Cinco de Mayo (and yes, we are primarily the only ones celebrating). I personally didn’t get out and do anything this year, but I did read the obligatory articles explaining the real history of May 5, 1862. Kelly Phillips Erb (the “taxgirl”) over at Forbes had an interesting piece explaining the Battle of Puebla was really just a small victory for Mexico in the Franco-Mexican War. Like most wars, the Franco-Mexican War was about power, money and taxes. The government in Mexico at the time decided to default on European debt. Not surprisingly Britain, Spain and France sent armed “debt collectors” over to gather their money owed. Britain and Spain cut deals with Mexico and went on their way while France decided to stick around and exert its power. War broke out and on May 5, 1862, Mexico won a small, symbolic battle at Puebla de Los Angeles. France would eventually take Mexico City and occupy it for three years, but that small victory in Puebla has given American and Mexican beer companies a perfect excuse to sell more beer.

Moving on to Wednesday of this week (May 6, 2015), the long-awaited “Deflategate” report was released by Ted Wells, the NFL appointed attorney who investigated the allegations. The conclusion? It is more probable than not that two New England Patriot employees deliberately deflated game balls and that Tom Brady more likely than not knew about it. To this whole thing I say, “meh.” I find it irritating and stupid. The evidence seems to point to the footballs being intentionally deflated, but I don’t believe anyone will ever own up to it. Any member of the Patriots staff that participated in this (player, locker room personnel or otherwise) is an idiot, but the fact that the NFL didn’t more closely control game balls has always blown my mind about this story. So, we’ll soon find out what the NFL will do and this story will be added to the annals of cheating in sports.

Lastly, and more locally, the nonstop Reno-London flights that were set to start in December have been canceled. I probably wasn’t going to hoping on that flight any time soon, but I liked the idea of international travel coming into Reno. A Thomas Cook Airline spokesperson said that processing time at customs was unacceptable. Bummer. Maybe the processing time will get better in the future and we’ll see this flight finally land in Reno.

Blossoms everywhere

Tax deadline will soon be here

Two more weeks then sleep

Tax deadline is near

Pink and white blossoms abound

It’s cold; spring is here

Since we moved back in September, my wife and I have dropped cable television and have gone the cord cutting route of using various streaming services. I’m happy to report that we’re very satisfied with the choice. It’s not a perfect alternative, but I do enjoy knowing I’m not shelling out $150 a month for a bundle of TV and internet services.

We still have our internet through Charter and I’ve been happy with them on that front. We then use Netflix, Amazon Prime, and Hulu as our main streaming services. While each of these services does have a cost, the ability to play shows when we want is amazing. The bonus of watching these shows commercial free is almost even more amazing. (Don’t’ get me started on Hulu Plus, however, which still makes us watch commercials even though we pay them a monthly fee!) We’ve also been watching live television the old fashioned way by hooking up an antenna. Even though you still have to play the game of moving the antenna around to find the best signal, this has been a perfectly acceptable way to watch shows and the news.

With all these options available, I see very few reasons for us to go back to paying for an all our nothing TV subscription. I think cable and satellite providers are starting to see this point of view as the newly launched Dish-owned service Sling TV has the slogan: “Take Back TV.” This service is $20 per month and provides streaming of live TV. You get the most popular channels like ESPN, Food Network, TBS and they just added AMC to the mix (hooray, we can finally be up to date on The Walking Dead). We haven’t jumped on board with this service yet, but I’m glad to see someone finally offering a more a la carte approach to TV viewing. Also, HBO finally announced their upcoming streaming service will be $15 per month. I’m enjoying all this choice in the “cable free” world.

So, if you’re still paying for cable or satellite TV in one of those fancy packages where you have to call every year or two to get the best price, consider cutting the cord and trying out the world of on demand streaming. I think you’ll like it.