Monday, April 23, 2018

What to do if you missed the tax-filing deadline: IRS tips from Newswire IR-2018-102.

WASHINGTON — While the federal income tax-filing deadline has passed for most people, there are some taxpayers still facing tax-related issues. This includes people who still haven’t filed, people who haven’t paid their taxes or those who are waiting for their tax refund.

The IRS offers these tips for handling some typical after-tax-day issues:

Didn’t file by April 18?

There is no penalty for filing a late return after the tax deadline if a refund is due. Penalties and interest only accrue on unfiled returns if taxes are not paid by April 18. The IRS provided taxpayers an additional day to file and pay their taxes following system issues that surfaced early on the April 17 tax deadline. Anyone who did not file and owes tax should file a return as soon as they can and pay as much as possible to reduce penalties and interest. For those who qualify, IRS Free File  is still available on through Oct. 15 to prepare and file returns electronically.

Filing soon is especially important because the late-filing penalty on unpaid taxes adds up quickly. Ordinarily, this penalty, also known as the failure-to-file penalty, is usually 5 percent for each month or part of a month that a return is late.

But if a return is filed more than 60 days after the April due date, the minimum penalty is either $210 or 100 percent of the unpaid tax, whichever is less. This means that if the tax due is $210 or less, the penalty is equal to the tax amount due. If the tax due is more than $210, the penalty is at least $210.

In some instances, a taxpayer filing after the deadline may qualify for penalty relief. If there is a good reason for filing late, be sure to attach an explanation to the return.

Alternatively, taxpayers who have a history of filing and paying on time often qualify for penalty relief. A taxpayer will usually qualify for this relief if they haven’t been assessed penalties for the past three years and meet other requirements. For more information, see the first-time penalty abatement page on

Friday, January 19, 2018

Varley Law Office, PLC

Warren A. Varley
Karen K. Varley
201 NE Second Street
P. O. Box 235
Stuart, Iowa 50250-0235

Unencrypted e-mail messages are not confidential or secure. Please do not send any message you consider to be confidential or sensitive in nature.
Please know that the act of sending electronic mail to our firm will not create an attorney-client relationship. Unless you are already a client of our firm, any electronic communication will not be privileged, & may be disclosed.

Tuesday, January 16, 2018

New IRS Withholding Tables Available

The Internal Revenue Service has released Notice 1036, which updates the income-tax withholding tables for 2018 reflecting changes made by the tax reform legislation enacted last month. This is the first in a series of steps that IRS will take to help improve the accuracy of withholding following major changes made by the new tax law.
The updated withholding information, posted on, shows the new rates for employers to use during 2018. Employers should begin using the 2018 withholding tables as soon as possible, but not later than Feb. 15, 2018. They should continue to use the 2017 withholding tables until implementing the 2018 withholding tables.  For more information, see IRS Newswire Issue No. IR-2018-5.

Tuesday, January 09, 2018

Filing 2017 Tax Returns

IRS announced that it will begin accepting electronically filed tax returns on Monday, January 29, 2018.  The last day to timely file a 2017 individual income tax return or an extension of time to file will be April 17, 2018.   By law, the Dept. of Treasury cannot issue refunds including Earned Income Tax Credit (EIC or EITC) or the Additional Child Tax Credit until mid-February. 
In spite of those delays, the best protection against fraudulent returns filed under your social security number is to file your tax return as early as possible.  You should receive your W-2s and 1099s by the end of January and your K-1s by March 15. 
You can find more information about filing your tax return here.

Tuesday, January 02, 2018

Happy New Year 2018

Happy New Year from all of us at 

Varley Law Office PLC

We wish you all a Blessed and Prosperous 2018

Inclement Weather Policy

۞ A reminder as we brave the arctic cold snap, that our office will be closed or will close early or will delay its opening if the West Central Valley Community School District cancels classes or dismisses early or postpones the beginning of classes, respectively, due to inclement weather or hazardous road conditions.  School closing announcements are available on various media and there is a link to the schools' website here.  We wish you a safe and healthy new year, as well.

Tuesday, December 26, 2017

Tax Law Changes - 2017 Tax Returns

Once again it is time to gather your income and deduction records in preparation for filing your 2017 income tax returns.
In light of the  doubling of the federal standard deductions for 2018, it would in most cases be wise to maximize your 2017 deductions if you itemize:*
1. If you pay estimated tax, you probably already pay your 4th installment in December, but you may want to consider increasing your state estimate.
2. Pay the March installment of property taxes on your residence in December.
3. Consider increasing your December gifts to charity if you will not be getting any tax benefit from making gifts to charity under the proposed tax law changes. (Note that next year contemporaneous proof will be required for all charitable deductions, not just donations over $250.)
If you need more specific year-end tax planning advice, you should contact our office to make an appointment. If you choose to have our office prepare and file your federal and state tax returns, you will need to sign and return the engagement agreement on the reverse side of this letter. All professionally prepared tax returns must be filed electronically (“e-file”). Refunds will take longer to process due to ongoing efforts to reduce fraudulent refunds obtained by identity theft. Your best protection against such stolen refunds is to file as soon as you receive your tax documents (W-2s, 1099s, K-1s, etc.).
If you made significant purchases (whether personal or for business) with cryptocurrencies (such as Bitcoin or Ethereum), be aware that you may have a taxable capital gain to report due to the dramatic rise in their value. Do not assume that your transactions cannot be audited by the IRS. 
On the related topic of cybersecurity:  Please do not send any documents by e-mail that contain social security numbers or bank account numbers, unless they are password protected.
IRS requires mileage logs for vehicles with business use; standard mileage rates for 2017 are:
                                                     Federal            Iowa
Business:                  53.5¢/mi.      53.5¢/mi.
Medical & moving:  17¢/mi.         17¢/mi.
Charitable:                14¢/mi.         39¢/mi.

You are required to send a Form 1099 to any individual, partnership or LLC that you paid $600.00 or more for services, rent or interest paid in the course of your trade or business. Payments to cooperatives, banks and other corporate entities are excluded.   Wages in excess of $150 in any quarter require the filing of Forms W-2 and W-3 (for household employees you may file Schedule H with your tax return instead). If you would like us to prepare these forms, you will need to provide us with the information before January 24, 2018.  
 If you have questions on any of the above or other tax matters feel free to call, e-mail, or stop in. When you have your records ready you may let us know and we will set up an appointment that is convenient for you. Evening or Saturday appointments can be arranged.
Best Wishes for the New Year!
*Pursuant to U.S. Treasury Regulations, you are advised that any federal tax advice included in this communication is not intended or written to be used, and cannot be used, to avoid any U.S. federal tax penalties or to promote, market, or recommend to another party any transaction or matter. 

Tuesday, June 27, 2017

Farm Leases for 2018

Now is the time dictated by Iowa law to begin negotiating crop land leases for 2018 or at least notify your tenant/landlord, as the case may be, if you wish to change any of the terms in your current lease. (Remember that mutual consent is required if you want to make changes in the middle of a multi-year lease.)
If you wish to terminate a cropland or pasture lease ending March 1, 2018, and have not already done so, you must serve notice in the manner set out in Iowa Code §562.7 on or before September 1, 2017. This statute does not apply to custom farming arrangements, but by tradition, many farm operators have come to expect notice by September 1.
Basing cropland rent on the current CSR2 (updated “corn suitability rating” assessment) of the soil in question is the most accurate and fair way to arrive at a comparable rent [See Computing a Cropland Cash Rental Rate: Computing a Farm Rental Rate]. In addition, you can calculate a CSR2 for your farm []. Below is a table of farmland values and cash rents from last year's ISU surveys in counties for which I prepare farm land leases:

The table above is based upon averages from sometimes limited survey results, but it does give a general idea of what the market for Iowa farm land looks like. The predicted annual rental is based on a 3.25% ROI. The leases I have prepared so far this year now fall in the $2.00 to $2.85/CSR point range, with the higher quality land falling at the higher end of that range. Farm lease rates continue to fall in sympathy with soft commodity prices. Land prices also continue to decline, but at a much slower pace. I would expect that to change if interest rates continue to rise.

Please contact our office if you have questions. Good luck with your negotiations!