Employers Must Provide W2s & 1099s By January 31st

The IRS has a new due date requirement of 1/31/17 for employers to provide W2s & 1099s to employees & contractors.  Traditionally, 1099s were allotted more time to be delivered.  Not so for 2017 (tax year 2016).  Here are some more popular forms that must be released by 1/31:

By January 31 (Note new due dates for Tax Year 2016 Form W-2, Wage and Tax Statement, and Form 1099, Miscellaneous Income with Box 7 entries)

This is welcome news as the start of tax season has been delayed until 1/23 and popular tax credits cannot be filed until 2/15.

Will My Refund Be Delayed This Year?

If your rely on your refund, plan for delays
If your rely on your refund, plan for delays

“Will my refund be delayed this year” is becoming an all too common refrain these days. Delayed e-filing dates, IRS not accepting tax forms & documents not being mailed out on time have all occurred over the last few years and have caused refund delays. However for the 2017 tax filing season (2016 tax year), it looks like we will get hit with all three of these scenarios at once:

Electronic Filing Start Date

Electronic filing has historically began around January 15th.  However, over the past few years, these dates have been pushed back from a couple of days to a couple of weeks.  This year is notable because as of time of this writing, the IRS has not even formally announced a beginning date to electronic filing!  A commencement date is usually announced weeks if not months earlier.  Therefore, it is a good bet to expect electronic filing to begin after 1/15 this year.  We will post the official start date once the IRS releases it.

IRS Delaying Processing of Popular Tax Credits

The IRS has announced that the following tax credit forms will not be accepted for processing until February 15th, 2017:

  • Earned Income Tax Credit (EITC)
  • Child Tax Credit (CTC)
  • Additional Child Tax Credit (ACTC)
  • The American Opportunity Credit (AOTC).

This is a nationwide law change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act; this is not a company or state change. If you normally file your taxes around this time (2/15/17), this delay should have a minimal impact on you.  However, if you tend to file early and/or have plans for your tax refund in advance, R&G Brenner suggests that you prepare yourself accordingly. For example: if you rely on your refund for critical services (rent, utilities, etc), we suggest that you save some funds to carry you through any potential delays.

IRS Delays Form 1095 Distribution Deadline

The original deadline for distributing Form 1095-B and Form 1095-C to individuals was January 31, 2017. The new deadline is March 2, 2017. The extension provides Applicable Large Employers (ALEs), self-insured group health plans, and health insurance carriers more time to populate and distribute the forms.  Since a final tax return cannot be filed without these health care related reporting, this too may delay the filing of your return and receipt of your refund.

These delays will affect taxpayers who claim popular credits & professional tax preparers the most as it may create a backlog and crush of appointments later on in the year.  R&G Brenner suggests that you bring with you all supporting documentation for the above tax credits which will allow for the accurate preparation of your return and help minimize any potential delays.

If you have any additional questions about this or anything else, please feel free to contact an R&G Brenner professional via the web, or by calling us toll free: (888) APRIL-15.

TurboTax Stops E-Filing Tax Returns Due To Fraud Concerns

Are You Sure...You Wan't To Use TurboTax?
Are You Sure…You Wan’t To Use TurboTax?

Intuit’s TurboTax–the leading do-it-yourself tax preparation software used by million of taxpayers–abruptly turned off the ability to file 2014 state tax returns citing “an increase in suspicious activity”.  This comes on heals of claims of “price gouging” by its customers which caused a major public relations uproar forcing the CEO of TurboTax to pen an apology.

[Intuit] has found an increase in criminal activity where stolen personal data is used to file fake state returns with state authorities. This illegal act allows fraudsters to claim tax refunds from state governments.

An internal TurboTax investigation has found the breaches are not due to a problem with its own systems, but criminals digging up the personal information elsewhere. The company said the investigation is ongoing. Intuit says it’s working with state tax officials to get the e-filing security back to where it needs to be to turn it back on…

TurboTax stopped allowing state tax returns to be filed when the state of Minnesota alerted them that they would no longer accept returns filed thought their product.  This was discovered when two Minnesota taxpayers logged onto TurboTax to file their returns and were surprised to find out that their returns where already filed.  The state is now reviewing thousands of returns as part of its investigation which at best is sure to delay refunds.  No word yet on when TurboTax or affected states will resume e-filling tax returns.

Source: USA Today

UPDATE

The issues with fraud surounding TurboTax may not be limited to State tax returns.  The FBI is now investigating claims that the fraud has extended to returns filed with the IRS, putting federal tax returns in jeopardy.

Imagine getting a congratulatory email from TurboTax that your federal return is on file when you haven’t yet filed! Given that virtually everything is electronic these days, that has become a massive issue…

But is anyone completely safe? The IRS estimates that it paid out $5.2 billion in fraudulent tax refunds related to identify theft just in the tax return filing seas (sic) last year. That seems like a bad number until you add the amount of bogus refunds last year the IRS says it was able to stop: $24.2 billion. Still, straightening it out if you are the one hit can be challenging…

If you have been affected by tax return fraud–either using TurboTax or by other means–please tell us about in the comments section.

Source: Forbes

What Do I Do If I Haven’t Received My Tax Refund?

Follow These Steps To Track Your Refund
Follow These Steps To Track Your Refund

Filing your tax return was stressful, but now that it’s done you know the amount you’ve got coming and you can’t wait to get your hands on it. This is understandable; we all usually have that refund earmarked for something. That’s why it can be so frustrating when your tax refund doesn’t arrive on time. Read on to learn what to do if you’ve been waiting an exceptionally long time for your tax refund.

Gather Some Information

The first thing you should do when you have yet to receive your federal tax refund is to gather your social security number, filing status and the exact amount that you expect to get so you can check your return status online or over the phone. Having this information close at hand is necessary to start the process.

Check the Status of Your Return

It’s important to first check your return status before you check your refund status. You can do so over the phone or by logging in securely to your account on the IRS website. If you used an e-filing service to process your return, inquire about your status with that company. Many such services offer online log-ins where you can easily check your account. If you didn’t use an e-file service, you can call the IRS toll-free at 1-800-829-1040. If you are lucky to speak to an agent during your first call, hopefully they will be able to tell you if there was a delay, and what the cause was. Often, the return simply hasn’t been processed yet.

Once you’ve confirmed that your tax return has been processed, you can check your federal tax refund status. If you opted for a direct deposit into your bank account, call the bank and see if the check has been deposited. If it hasn’t, a quick way to check on your status is to use the Where’s My Refund? tool provided by the IRS and you can track where your refund is at any time. The site is updated every 24 hours in the evening, so you can start checking it the day after you e-file your return (or a month after you’ve mailed it in).  You can also call the IRS at 1-800-829-1954 to determine where your check is and why it’s taking so long.

Reasons for Delay

Tax season is a notoriously busy time for the IRS: people are filing taxes, refunds are being processed and issues are being sorted. If you wait to file close to the deadline of April 15th, you could wait longer than if you filed a month or two earlier. In some cases, refunds and identities can be stolen. If you suspect suspicious activity as the reason for your refund delay, contact the IRS immediately at 1-800-829-1040.

Often times, there are good reasons why your refund has been delayed. If you opted for a paper check from the IRS, expect to wait at least twice as long as if you did direct deposit. In order to minimize wait time in the future, plan on e-filing with a direct deposit option next year.

Tax Filing Season Delayed Until January 31st

IRS Accepting Returns January 31st
IRS Accepting Returns January 31st

The IRS put everyone one notice not long after the end of the latest government shutdown that the 2014 tax filing season would be delayed by “1 or 2 weeks”.   Well not surprisingly, the IRS recently released that the first date that they will be accepting 2013 tax returns for processing will be January 31st:

WASHINGTON — The Internal Revenue Service today announced plans to open the 2014 filing season on Jan. 31…

The new opening date for individuals to file their 2013 tax returns will allow the IRS adequate time to program and test its tax processing systems. The annual process for updating IRS systems saw significant delays in October following the 16-day federal government closure.

“Our teams have been working hard throughout the fall to prepare for the upcoming tax season,” IRS Acting Commissioner Danny Werfel said. “The late January opening gives us enough time to get things right with our programming, testing and systems validation. It’s a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation’s taxpayers.”

The government closure meant the IRS had to change the original opening date from Jan. 21 to Jan. 31, 2014. The 2014 date is one day later than the 2013 filing season opening, which started on Jan. 30, 2013, following January tax law changes made by Congress on Jan. 1 under the American Taxpayer Relief Act (ATRA). The extensive set of ATRA tax changes affected many 2012 tax returns, which led to the late January opening.

The IRS noted that several options are available to help taxpayers prepare for the 2014 tax season and get their refunds as easily as possible. New year-end tax planning information has been added to IRS.gov this week.

In addition, many software companies are expected to begin accepting tax returns in January and hold those returns until the IRS systems open on Jan. 31. More details will be available in January.

The IRS cautioned that it will not process any tax returns before Jan. 31, so there is no advantage to filing on paper before the opening date. Taxpayers will receive their tax refunds much faster by using e-file…with the direct deposit option.

The April 15 tax deadline is set by statute and will remain in place. However, the IRS reminds taxpayers that anyone can request an automatic six-month extension to file their tax return. The request is easily done with Form 4868, which can be filed electronically or on paper.

IRS systems, applications and databases must be updated annually to reflect tax law updates, business process changes and programming updates in time for the start of the filing season.

The October closure came during the peak period for preparing IRS systems for the 2014 filing season. Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns. Updating these core systems is a complex, year-round process with the majority of the work beginning in the fall of each year.

About 90 percent of IRS operations were closed during the shutdown, with some major work streams closed entirely during this period, putting the IRS nearly three weeks behind its tight timetable for being ready to start the 2014 filing season. There are additional training, programming and testing demands on IRS systems this year in order to provide additional refund fraud and identity theft detection and prevention.

Update:

The IRS is accepting 2013 Business Returns (Forms 1120, 1120S, 1065, 1041, 720, 940, 941, 2290) for filing January 13th, 2014.

Source: IRS.gov

How To Prevent The IRS From Delaying Your Refund

Many taxpayers believe that their tax refunds are “found” money.  But a tax refund is simply an over-collection of taxes by your employer.  Watch this video to find out how to adjust your tax withholding to reduce the amount of money withheld so the IRS has less or no money to refund you in future tax seasons, and increase your weekly paychecks.

The downside for some taxpayers is that they enjoy getting a nice refund.  In many ways, they treat the IRS like a bank.  However, when you consider you can do the same with a little diligence and actually take the extra money from your weekly checks and deposit them into a real bank (that actually pays interest no less), and that the IRS is auditing and delaying more refunds, this should be an attractive alternative for many taxpayers.

If you need assistance or more information, please contact an R&G Brenner profession here, or call us toll free at (888) APRIL-15

Government Shutdown Delays Tax Filing Season

 

Filing Season Delayed...AGAIN!
Filing Season Delayed…AGAIN!

Like last year, the IRS is delaying the start of tax season.  Unlike last year, the reason for the delay is the government shutdown:

Tax filing season will start one to two weeks late because of the 16-day government shutdown, the Internal Revenue Service announced Tuesday. The IRS says it needs the extra time to program and test tax processing systems. “The government closure came during the peak period for preparing IRS systems for the 2014 filing season,” the IRS said in a release. “Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns.”

The government shutdown seems like an awfully convenient excuse to delay the start of the tax season. Since the explosion of identity theft over the last few years, the IRS and multiple studies have concluded that the majority of fraud like identity theft occurs at the beginning of the tax season. Therefore, by delaying the start of the tax season, the theory is that with less days to file, the less fraudulent returns the IRS will receive.  Therefore the early filers–which are usually low income taxpayers who really need their tax refunds just to live–are going to be most negatively affected by this delay.  The little guy gets the shaft once again. Oh, and by the way, tax season may be delayed by a couple of weeks, but your taxes are still due on April 15th.  Are we really surprised?  Let us know your thoughts in the comments section below.

Source: USA Today

H&R Block Files Client’s Tax Returns Early Delaying Refunds

Certain H&R Block Client's Refunds Are Delayed
Certain H&R Block Client’s Refunds Are Delayed

H&R Block (HRB)–the largest public retail tax preparation company in the United States–has confirmed that they have filed many tax returns containing certain delayed credits too early, causing their clients refunds to be delayed.  The primary issue is the Education Tax Credit which was not accepted for electronic filing until recently (February 22nd).  This has prompted the IRS to send letters to HRB clients instead of their expected refunds.  HRB has released the following statement:

“H&R Block has confirmed with the IRS that there was an issue with certain tax returns filed before February 22, 2013 that included certain education tax credits claimed on Form 8863.  We have worked with the IRS to expedite a solution to this issue for all of our affected clients.”

If you are a current HRB client, and have received notification from the IRS concerning the early filing of your tax return–or you think you may be affected–it is advised that you contact your local HRB office, or contact their executive headquarters by calling 1-800-HRBLOCK.

Source: ABC

IRS Delays Accepting Returns Until Jan. 30th

E-file Delayed Until Jan. 30th
E-file Delayed Until Jan. 30th

By Robert W. Wood

The IRS plans to begin processing 2012 tax returns January 30, 2013, it has announced. With the massive fiscal cliff tax bill enacted January 2 that is mostly retroactive, the IRS has its work cut out for it. There are forms and instructions to revise, not to mention computers to retool. While the IRS says that it worked to anticipate Congress’ last minute tax law changes, the final law required the IRS to do considerable updating and processing before accepting tax returns.

The good news is that the vast majority of tax filers — more than 120 million households according to the IRS – should be able to start filing their tax returns January 30. In fact, the IRS notes that it will be able to accept tax returns impacted by the retroactive AMT patch as well as the three big extender provisions:

  • People claiming the state and local sales tax deduction;
  • Higher education tuition and fees deduction; and
  • Educator expenses deduction.

Waiting to File? Despite the massive IRS effort to get filing going right away, some taxpayers will need to wait until late February or March. Examples include people claiming residential energy credits, depreciation of property or general business credits. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March. The IRS says it will announce a specific date in the near future. Key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available onIRS.gov.

Even though Electronic filing has been pushed back to January 30th, R&G Brenner encourages all taxpayers to file as soon as they can.  Both NY State and the IRS have delayed refunds due to budget constraints in the past.  Those that file earlier will be queued up and ready to be transmitted to the IRS/State(s) as soon as the “gates” are opened, and this will reduce the chances that your refund is affected by any potential budget issues.  Contact an R&G Brenner professional today.  We are open and ready to assist you.

Source:  Forbes

Tax Filing Season Delayed Until Jan. 22 Or Later

IRS-delayed-tax-refunds
IRS Delays Filing Season And Refunds…Again.

By: Robert McCabe

Congress might have averted the “fiscal cliff,” but its last-minute action has created some big headaches and questions for tax filers.

“There’s a couple of impacts that I’ve never seen – this is my 44th tax season,” said John Hewitt, founder of Virginia Beach-based Liberty Tax Service and Jackson Hewitt, two of the nation’s largest tax-preparation companies.

Those who want to file a 1040 form electronically – the option favored by more than 90 percent of taxpayers – can’t do that yet because the Internal Revenue Service hasn’t signed off on finalized forms.

“Right now, a 1040 can’t be released,” Hewitt said. “It has a watermark on it saying, ‘Do not file.’ “

Filing paper forms probably won’t be possible until the end of the month, he said.

Taxpayers who like to knock out their federal and state returns together – whether filing themselves or using a tax preparer – face further delays because many of the states that collect income taxes don’t have their forms ready either.

“Typically, as of Jan. 3, we would be ready to go and fully tested in all the states that have income taxes,” Hewitt said in an interview Thursday. “Well, this year, only about a dozen of the states are ready to go because they’ve all been waiting on the federal government to act before they can finalize their forms and tax rates and so forth.”

Virginia will be ready by Monday, Hewitt said.

An IRS spokesman said Thursday that he could not say when new forms would be approved or whether there would be any adjustment of key dates for tax filings.

“Those decisions are under way and should be coming out relatively quickly, so stay tuned,” he said.

New legislation such as the fiscal package just approved by Congress needs to be reviewed, and IRS computer systems need to be configured to adhere to the bill’s provisions, the IRS spokesman said.

“These things don’t happen in a matter of hours; it takes days.”

Months ago, the Internal Revenue Service set Jan. 22 as the start date for the filing of electronically transmitted, computer-generated tax returns – the latest start date since electronic filing began in the late 1980s, Hewitt said.

“Those people that want their money quickly, that want their money in just a couple of weeks, are going to get it a week later than at any time since electronic filing was invented 25 years ago,” he said.

Carolyn Buzek is a Jackson Hewitt franchisee with eight offices in the Hampton Roads area.

“The IRS gets a bum rap in a lot of cases,” she said, adding that “everybody blames them for why you can’t file.”

“Well, it’s really Congress that makes the decisions, and the IRS has to scramble and try to figure out when you have the wording,” Buzek said. “Some of this is getting pretty complicated.”

California-based Intuit, maker of TurboTax, offers both online and desktop products enabling taxpayers to file their own returns. Electronically completed forms are transmitted to the company, which sends them to the IRS when it’s ready to receive them, Ashley McMahon, a spokeswoman, said Thursday.

Both products include prompts instructing users to download updates.

Hewitt said one of the biggest burdens his company will face this year is having to deliver the bad news to some customers that they will be getting their refunds late.

“These are people who live paycheck to paycheck,” he said, adding that they typically get returns averaging about $3,000.

Another burden is internal, affecting the biggest component of Liberty’s workforce – about 100 computer programmers.

Typically, they get information in October from the states with income tax.

“They have from October to January to get ready,” Hewitt said of his company’s programming staff. “Well, now we have only a few weeks to get ready.”

Hewitt said U.S. taxpayers are facing a situation “unheard of in the annals of tax preparation.”

“I don’t think Congress really understood the impact of what’s going to happen with tax filing this season,” he said. “Maybe they didn’t care.”

Source: Pilotonline.com