IRS and Partners Look to Start of 2018 Tax Season- Tax Tip IRS Tax Tip 2017-57, October 12, 2017 While taxpayers will not start filing their tax returns for a few months, there are a few things they can do to make the process easier next year. Here are two things that could affect the 2017 returns they will file in 2018. 1. Report name changes. Recently married or divorced taxpayers who change their name should notify the Social Security Administration. They should also notify the SSA if a dependent’s name changed. Taxpayers need to do this so that when the taxpayer files next year, the new name on the tax return matches A mismatch between the name shown on their tax return and the SSA records can cause problems in the processing of their tax return and may even delay their tax refund. 2. Renew Individual Taxpayer Identification Numbers. Taxpayers who use an Individual Taxpayer Identification Number should check to see if their number expired in 2016 or will expire this year. If so, and they need to file a return in 2018, they should apply now to renew their ITIN to avoid certain disallowed tax credits and processing delays next year. Taxpayers who have not used their ITIN to file a federal return at least once in the last three years will see their number expire Dec. 31, 2017. Additionally, ITINs with middle digits 70, 71, 72 or 80 will also expire at the end of the year. Only taxpayers with expiring ITINs need to take any action. To renew an ITIN, a taxpayer must complete a Form W-7 and submit required documentation. No tax return is required when submitting an application to renew. IRS and Partners Look to Start of 2017 Tax Season; Encourage use of IRS.gov and eFile; Warn of Refund Delays IRS Tax Tip Jan. 5, 2017 WASHINGTON — The Internal Revenue Service and partners from the states and tax industry today reminded taxpayers that the nation’s 2017 individual income tax filing season opens January 23. The IRS expects more than 153 million tax returns to be filed this year and taxpayers have until Tuesday, April 18, 2017, to file their 2016 tax returns and pay any tax due. The deadline is extended because the Emancipation Day, a holiday in Washington, D.C., will be observed on Monday, April 17 pushing the nation’s filing deadline to April 18. "There are a number of important changes this year involving refunds and tax law changes that we encourage people to keep in mind," said IRS Commissioner John Koskinen. “We encourage taxpayers to plan ahead and take a few minutes to review these changes. As we enter the filing season, taxpayers should know that the dedicated workforce of the IRS and the nation's tax community stand ready to help." Taxpayers that are efiling can still submit returns to their software provider before Jan. 23. They will hold the return and transmit it to the IRS when the systems open. The IRS also reminds taxpayers that they don’t have to wait until Jan. 23 to contact their tax professional. In 2016, the IRS issued 111 million individual tax refunds and expects more than 70 percent of taxpayers to receive a refund in 2017. Also, the IRS reminds taxpayers that a new law requires the IRS to hold refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until Feb. 15. "We encourage taxpayers to file as they normally would, including returns claiming the EITC or ACTC” Koskinen said. “The IRS and the nation's tax community are committed to making this another smooth filing season." eFile and Free File More than four out of five returns are expected to be filed electronically, with a similar proportion of refunds issued through direct deposit. Tax Tip: The IRS encourages taxpayers to plan ahead and take advantage of the online resources available on IRS.gov. Choosing efile and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund. The IRS anticipates issuing more than nine out of 10 refunds in less than 21 days from the time returns are received. The IRS Free File program, available at IRS.gov, opens Friday, January 13. Commercial partners of the IRS offer free brand name software to about 100 million individuals and families with incomes of $64,000 or less. Seventy percent of the nation’s taxpayers are eligible for IRS Free File. Protecting Taxpayers from ID Theft Related Refund Fraud The IRS continues to work with state tax authorities and the tax industry to address tax related identity theft and refund fraud. As part of the Security Summit, the IRS made significant inroads against fraudulent returns in 2016. Summit leaders detailed new and expanded safeguards for taxpayers in the upcoming 2017 tax season. The 2017 focus revolves around “trusted customer” features that will help the authenticity of the taxpayer and the tax return before, during and after a tax return is filed. Additional protections will build on the 2016 successes that prevented fraudulent returns and protected tax refunds. Health Care Basics Again this year, meeting the tax obligation of the Affordable Care Act for the vast majority of taxpayers will simply mean checking a box to verify everyone on their return has health coverage. For others, IRS.gov/aca features useful information, tips and interactive online tools to help taxpayers with the premium tax credit, the individual shared responsibility requirement and other tax related provisions of the ACA. The Affordable Care Act requires that a taxpayer and each member of their family either has qualifying health coverage for each month of the year, qualifies for an exemption, or makes an individual shared responsibility payment when filing their tax returns. Assistance Filing the Tax Return More than 90 percent of all tax returns are prepared using tax return preparation software. This software generally includes tax law help along with reminders and prompts about tax breaks and responsibilities. Tax Tip: The IRS reminds taxpayers that a trusted tax professional can also provide helpful information about the tax law. Information on tips about selecting a preparer and national tax professional groups are available on IRS.gov. The IRS urges all taxpayers to make sure they have all their year end statements in hand before they file their return. This includes Forms W2 from employers, Forms 1099 from banks and other payers, and for those claiming the premium tax credit, Form 1095A from the Marketplace. Doing so will help avoid refund delays and the need to file an amended return later. Delayed Refunds The IRS expects to issue more than nine out of 10 refunds in less than 21 days. However, the Protecting Americans from Tax Hikes (PATH) Act mandates the IRS hold refunds on tax returns claiming the EITC or the Additional Child Tax Credit (ACTC) until midFebruary. The change helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent tax fraud.
The IRS will begin releasing EITC and ACTC refunds starting Feb. 15, but cautions taxpayers that these refunds likely will not start arriving in bank accounts or on debit cards until the week of Feb. 27. The IRS wants taxpayers to know it will take additional time for their refunds to be processed.The IRS reminds taxpayers many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the threeday holiday weekend involving President’s Day may affect their refund timing. Where's My Refund? on IRS.gov and the IRS2Go phone app will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after Feb. 15. Taxpayers will not see a refund date on Where's My Refund? or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates, so Where’s My Refund? remains the best way to check the status of a refund. Expired Individual Taxpayer Identification Numbers (ITIN) The PATH Act requires that certain ITINs expire on Jan. 1, 2017. Any ITIN not used on tax returns once in the past three years and any ITIN with middle digits of either 78 or 79 must be renewed before a return can be processed. Anyone filing a tax return with an expired ITIN could experience return processing and refund delay as well as denial of some tax benefits until the ITIN is renewed. An ITIN renewal application could take as long as 11 weeks to process during tax filing season. ITINs are used by people who have tax filing or payment obligations under U.S. law but are not eligible for a Social Security number. Help for Taxpayers The IRS reminds taxpayers they have a variety of options to get help filing and preparing their tax return on IRS.gov. Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly offer free tax help to people who qualify. Go to irs.gov and enter “free tax prep” in the search box to find a nearby VITA or TCE site. The IRS2Go Mobile App can help find free tax preparation assistance, check your refund status. All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return. The IRS also reminds taxpayers that a trusted tax professional can provide helpful information and advice about the ever changing tax code. Another IRS Tax Tip for choosing a return preparer and details about national tax professional groups are available on IRS.gov.
Individuals receiving 1099’s and businesses operating as independent contractors must pay in estimated taxes four times per year. The next upcoming payment of estimated taxes must be made by September 15, 2014. The estimated taxes must be paid at this time for anyone who has earned income that is not paying taxes on this income through payroll withholding. September 15th is the third of four 2014 estimated tax installment dates. Individuals can use Form 1040-ES when paying their September estimated quarterly tax payment. If you are a corporation or a partnership and you filed an extension in March or April for 2013, you will need to submit your 2013 tax returns and payments by September 15 (the last day to file with extension). Corporations will need to complete Form 1120 or Form 1120S, depending upon whether they are an S-corporation or a C-corporation. Partnerships must file Form 1065. If you need assistance determining whether you must pay estimated taxes or if you need help calculating the amount due, contact Brennan & Company CPA, PC. Follow us on FaceBook.
Tax season is over for the year for most individuals, unless you get the dreaded news that you are the target of an IRS audit. The risk of an audit is one of the main reasons why it is very important for you to have an accountant do your taxes before you submit them. Your accountant can help to ensure you follow the rules and have your paperwork together so if the IRS comes to question you, you will be ready and prepared to answer. If the IRS does decide that it is going to audit you, the accountant who prepared your income tax return can also assist you in preparing for the audit and in answering the IRS questions. If you didn’t have your taxes done by a professional accountant, it may be time to call one once you find out you are being audited so you can get the help you need to be ready to answer any queries from the Internal Revenue Service about the taxes that you paid and the return you submitted. Call Brennan Tax for information on how an accountant may be able to assist you. Check us out on Facebook.
When you file your taxes, you are going to have to decide if you want to itemize your deductions or not. So you are probably wondering why Itemized deductions vs. standard deductions. Every person gets a standard deduction, and itemizing is an alternative to taking the standard deduction. If you itemize, then you can take advantage of tax benefits like mortgage interest deductions and student loan deductions. However, your taxes become more complicated. Not only that, but it may not be worth it for you to itemize your deductions if the amount of money you would get back on your taxes is less than you would get back if you simply took the standard deduction. Deciding whether to itemize your income tax deductions or not is just one of many complicated issues that you face when it comes to completing your tax return. An experienced tax professional at Brennan Tax can help you to make this choice. We will review all of your financial information and potential deductions and help you to take the most strategic approach so you get the maximum back and reduce your taxes as much as possible. Don't forget to like us on Facebook!