Getting ready for Tax Season
Mid-January means out with the Christmas tree and in with all the tax-related documents.
Tax season officially begins Jan. 23, the first day individuals can file their 2016 returns. Many of us won’t be filing that early, though, because we won’t receive income statements from our employers until the end of the month.
But it’s not too early to prepare for tax season, Internal Revenue Service spokesman Michael Devine said.
“Right now you need to think about your tax records, the documents you will be receiving that have to do with income, charitable contributions, things like that,” Devine said. “Put them all in one place, a secure place so you know where to go to find them.”
Filers should know there are a few changes for the upcoming tax season. The most significant one concerns people who do not have a Social Security number but are still required to file a return.
These filers are assigned an Individual Tax Identification Number, and recent tax law changes require some of these people to renew their ITIN, Devine said. They include those who haven’t used their number on a tax return since 2013 or were issued a number before 2013, or who have a number with the middle digits 78 or 79.
“If they haven’t applied for a renewal, they need to do so immediately by going onto the IRS website (www.irs.gov/itin),” Devine said. “If they wait until filing season starts, they might wait 11 weeks for their number to be valid.”
Another change might impact people who are filing electronically on their own and are using a software product for the first time. They will likely need to find their 2015 adjusted gross income amount, Devine said.
“They will need to know that amount to validate their tax return,” Devine said. “It’s no problem if you are using the same tax preparation software as last year because it will ask you to import the previous year’s information. But if you are using new software, you will need to find a 2016 return or go online (to www.irs.gov) and ask for a transcript.”
The least popular change for some filers is one involving those who claim the Earned Income Tax Credit or the Additional Child Tax Credit.
A new tax law change prohibits the IRS from releasing any EITC/ACTC refunds until Feb. 15 at the earliest, no matter how early filers send in their return.
“It gives us time to receive W-2 forms from employers and stop more cases of tax fraud,” Devine said. “It will delay refunds for some people. They probably won’t receive them until the end of February.”
One last change: The filing deadline is April 18 because the traditional April 15 deadline falls on a Saturday and the following Monday is Emancipation Day, a legal holiday in Washington, D.C.
Article Source: GoErie