Monday November 20, 2017
Koskinen Launches Tax-Filing Season
He highlighted a number of changes that will affect the anticipated 153 million taxpayers who file tax returns. The IRS expects 80% of those returns to be filed electronically. He also mentioned the 111 million tax refunds last year. About 73% of returns requested a refund, with an average IRS payment of $2,857.
Koskinen discussed major changes in seven specific tax-filing areas.
1. Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) – The EITC or ACTC may delay refunds. Congress requires the IRS to hold these tax returns until at least February 15. These tax refunds will be available the week of February 27. You may use the "Where's My Refund" tool on the IRS website to check your status.
2. Where's My Refund – The www.irs.gov website will show the best information on your refund status. The IRS telephone support group, CPAs and other tax professionals will all have the same information that you do using Where's My Refund.
3. Speed Up Refunds – The best way to receive a prompt refund is to file electronically and request direct deposit to your bank account. Over 80% of refund filers used direct deposit last year. A paper check may delay the refund by several weeks.
4. Individual Taxpayer Identification Numbers (ITINs) – Some individuals have a specific ITIN which is used rather than a Social Security Number on a tax return. However, if you have not used your ITIN in the past three years or there are middle digits of 78 or 79, it will not be valid and you will need to renew.
5. Tax Software – If you are using tax software to prepare your return and have changed to a new software vendor, you may be asked to enter the adjusted gross income from your 2015 tax return.
6. Filing Date – Koskinen reminded everyone the filing date this year gives three extra days. Because April 15 is on a Saturday and Emancipation Day is a legal holiday in the District of Columbia, tax returns are due on Tuesday, April 18, 2017.
7. Tax Help – www.irs.gov. The quickest and most comprehensive way to obtain tax help is through use of the IRS website. Many taxpayers and tax professionals take advantage of the wide array of tools and resources on the site.
Editor's Note: Commissioner Koskinen hopes for better taxpayer service this year. The IRS has hired 1,000 new phone support staff to answer taxpayer questions. The phone support improved from 37% of calls being answered in 2015 to 72% in 2016. Koskinen believes the IRS will have even better taxpayer service in 2017. Some taxpayers may see modest refund delays because the IRS continues to implement new security systems. Because hackers are always creating "unique or new ways" to attack www.irs.gov, the Service is continually upgrading various internal strategies and defenses.
IRS Publishes 2017 Tax-Filing Tips
As 153 million American taxpayers start the filing season, the Service published tax filing tips in IR-2017-1. While the IRS opens up filing on January 23, you may prepare your electronic returns before then. Your tax software company will submit the return on January 23.
There are several specific IRS tips that will help you during the filing season.
1. Free File and eFile – Over 80% of the filings with the IRS will be electronic. About the same percentage of refunds will also be completed through direct deposit to your bank. The eFile system is the safest and quickest. If you are in the 70% of taxpayers with income of $64,000 or less, you may use IRS Free File. Go to www.irs.gov after January 13 and you may use the Free File program. All taxpayers with any income level may use the IRS "Fillable Forms" option on www.irs.gov.
2. Refund Fraud – The IRS Security Summit regularly identifies new protection strategies. Since the IRS initiated the Security Summit, there has been a 50% decline in stolen identities. The various IRS efforts to create new safeguards are designed to ensure that the taxpayer who is filing is the correct person. Private companies also are increasing safeguards. Tax software companies may require you to enter your 2015 adjusted gross income as a method of authenticating your right to file this tax return.
3. Health Care – You must meet all of the obligations under the Affordable Care Act. You may have qualifying insurance; if so, check that box. Alternatively, you may be required to make the Individual Shared Responsibility payment.
4. Assistance – Over 90% of taxpayers now file using tax preparation software. You should start by gathering your IRS Forms W-2 from any employers and Forms 1099 from banks and other payers. If you received a medical premium tax credit, Form 1095-A is available from the healthcare Marketplace.
5. Delayed Refunds – If you are claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC), your refund will be delayed until the week of February 27 or later. Use the "Where's My Refund" tool on www.irs.gov to check your status.
6. Individual Taxpayer Identification Number (ITIN) – This will expire if not used within three years or the middle digits are 78 or 79. It may take up to 11 weeks to renew your ITIN. Some taxpayers use an ITIN rather than a Social Security Number to file their tax return.
7. Filing Help – The Volunteer Income Taxpayer Assistance (VITA) program or the Tax Counseling for the Elderly (TCE) program may provide free assistance. Go to www.irs.gov and search for "free tax prep."