Monday, January 25, 2016

Tax filing season is underway, and IRS says most Americans to get refund

Good news this year for those who procrastinate about filing taxes:

You don't have to file until Monday, April 18, because Emancipation Day celebrations take place on Friday, April 15 — the usual tax deadline — in Washington, D.C.
Meanwhile, if you are ready to file, you can, because the IRS began accepting tax returns Tuesday.
There are few things to be aware of this tax-filing season, Chattanooga-area tax preparers say.
First, if you have health insurance through your employer, you don't have to wait to get a form that proves that in order to file. Second, Congress made permanent a long list of personal and business tax breaks, including one that lets Tennessee residents deduct sales taxes if they itemize.
Employers mistakenly tell their employees not to file their taxes until the employee has gotten a 1095-B or 1095-C form that proves the employee has employer-provided health care that exempts them from needing insurance through the Affordable Care Act, or Obamacare, Marketplace.
Only people who have bought insurance through the marketplace need to wait for a 1095-A form that proves that in order to file.

Refunds for most
Most Americans have incentive to file, because the IRS expects more than 70 percent of taxpayers to again receive tax refunds this year. Last year, the IRS issued 109 million refunds, with an average refund of $2,797. And they should come fast. The IRS anticipates it will issue more than nine out of 10 refunds in less than 21 days.
Many of the refunds are boosted by the earned income tax credit (EITC), a subsidy for working people that has been in place since 1975. It has the support of politicians on the left and right ranging from Democratic President Barack Obama to Republican Speaker of the House Paul Ryan, both of whom would like to see the EITC expanded — though they disagree on how best to do that.
Some tax preparation firms offer "refund anticipation loans," that are secured by and repaid from the tax filer's refund.
But such loans have come under fire from consumer advocates who say they prey on the poor.

The IRS expects more than 150 million individual returns will be filed this year, and more than four out of five returns — above 80 percent — are expected to be filed electronically, with a similar proportion of refunds issued through direct deposit.
Seventy percent of the nation's taxpayers are eligible for IRS Free File. Commercial partners of the IRS offer free brand-name software to about 100 million individuals and families with incomes of $62,000 or less.
You can find more about electronic filing alternativss at www.irs.gov/Filing/E-File-Options.
Stonger ID fraud protections
The IRS says it's working diligently with state tax authorities and the tax industry to address tax-related identity theft and refund fraud. As part of the Security Summit effort, stronger protections for taxpayers and the nation's tax system have gone into effect for the 2016 tax filing season.
There will be new security requirements when you're preparing your taxes online, especially when you sign in to your tax software account, the IRS says, to better protect your tax software account and personal information.
The new measures attack tax-related identity theft from multiple sides. Many changes will be invisible to taxpayers but help the IRS, states and the tax industry provide new protections.
"As part of our Security Summit initiative, the IRS has been working closely with the tax industry and state revenue departments to provide taxpayers with stronger protections against identity theft during the tax filing season," IRS Commissioner John Koskinen said in a statement.