In the battle against identity theft, the IRS is now permitting employers to use truncated (shortened) taxpayer identification numbers (TTINs) on W-2 Forms that are given to employees.

Typically, this means the first five digits of your nine-digit Social Security number will be replaced with asterisks or XXXs (e.g.: ***-**-1234 or XXX-XX-1234).

Note, however, that truncated numbers are NOT permitted on W-2 Forms that are sent to the IRS or the Social Security Administration (to ensure wage information is relayed accurately). For now, we’ll have to see if the State of Georgia makes a decision about accepting truncated ID numbers before changing this across the board.

Also, the IRS has announced that it will stop faxing tax transcripts to taxpayers, tax professionals and third parties, and stop mailing tax transcripts to third parties. The new policy covers individuals and businesses.

Individual taxpayers will be able to obtain their own tax transcripts, which are summaries of tax return information, by:

  • Using IRS.gov or the IRS2Go app to access Get Transcript Online (taxpayers may immediately download or print their transcript after first verifying their identities);
  • Using IRS.gov or the IRS2Go app to access Get Transcript by Mail (the transcript will be delivered within 10 days to the address of record);
  • Calling 800-908-9946 for an automated Get Transcript by Mail feature; or
  • Submitting Form 4506-T, Request for Transcript of Tax Return, or 4506T-EZ, Short Form Request for Individual Tax Return Transcript, to have a transcript mailed to the taxpayer’s address of record. (Forms 4506, 4506-T and 4506T-EZ will no longer provide an option to have transcripts mailed to a third party.)

Lenders and others that need to verify income for non-tax purposes will now use the IRS’s Income Verification Express Service (IVES). However, tax return information currently available via the IRS Data Retrieval Tool through the Free Application for Federal Student Aid (FAFSA) process will continue to be available.

Please let us know if you have any question about these changes; we’ll be happy to walk you through them.

Fun Facts: Acronyms

  • M&M’s = Mars & Murrie’s, which refers to founders Forrest Mars Sr. and Bruce Murrie.
  • 3M Company = Minnesota Mining and Manufacturing Company.
  • JCPenney = James Cash Penney, the name of the founder.
  • FIAT = Fabbrica Italiana Automobili Torino, which means “Italian automobile factory of Turin.”
  • BMW = Bayerische Motoren Werke in German, which translates to “Bavarian Motor Works.”
  • Aflac = American Family Life Assurance Company, which adopted the acronym in 1989.
  • GEICO = Government Employees Insurance Company, which started by serving U.S. government employees and military personnel.
  • ZIP = Zone Improvement Plan, which was introduced by the US Postal Service in 1963.
  • CAPTCHA = Completely Automated Public Turing test to tell Computers and Humans Apart. It was invented in 1997, coined in 2003 and completely annoys humans to this day!

Have You Done a Paycheck Check-up Recently?

The Tax Cuts and Jobs Act made major revisions to taxpayer withholding. To accommodate those changes, the IRS will be releasing a new Form W-4 for the 2020 tax year (probably in November). The new Form W-4 should allow you to more simply calculate your income tax withholding by eliminating the use of withholding allowances, which were tied to the personal exemption amount.

In the meantime, the IRS encourages you to do a “Paycheck Checkup” to ensure that you are having the right amount of tax withheld. This is especially important if changes to the tax law affected the size of your refund this year. Remember: Withholding too little could mean an unexpected tax bill or penalty.

Visit the IRS’s Paycheck Checkup website and have your most recent pay stub and most recent income tax. Or give us a call and we can help you determine the correct amount for withholding.

The information provided here by Premier CPA Services PC is for general information only. It does not constitute legal, accounting, tax or other professional advice or services, and is presented without any representation or warranty as to the accuracy or completeness of the information. Please contact us for information as it relates to your circumstances.