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.

Could a Tax Credit Help Millennials Financially?

Could The EITC Help Millennials?
Could The EITC Help Millennials?

A lot of attention is being paid to Millennials, who, unlike their parents’ generation, are bucking the trend of graduating directly into lucrative jobs, settling down, buying a house and having 2.5 kids. Millennials, defined as young adults born between the early 1980s and early 2000s, are instead moving back in with their parents, struggling to find work and as a result not making big purchases like cars and homes, not getting married as young, and not having children until much later in life, if at all. While this pattern may not hold for every member of this young generation, statistics indicate that most Millennials are struggling financially. Could a tax credit help all that?

Different Priorities

Millennials’ parents grew up in a different generation. The milestones of life seemed natural—even inevitable—to Baby Boomers. According to Moyers and Company, it’s not that Millennials don’t want the nice job, big house and other big ticket items, it’s that they can’t afford them. This young generation is chronically under-employed or entirely unemployed, and earnings for this age group are on the paltry side. For a generation more concerned with the how many Twitter followers they have than how much is in their 401k, it makes sense that the weight given to these traditional milestones wouldn’t be the same as their parents’ generation, for whom success was defined by those milestones.

Can a Tax Credit Help?

Enter the proposal of a tax credit for this young generation: the Earned Income Tax Credit. As it stands now, this tax credit is extended only to struggling families who earn some money but not nearly enough to live on, says BloombergBusinessweek. It helps them navigate their way up the income brackets to cut down on poverty rates, offering incentives to get back to work. The problem is that, while the tax credit helps families, it leaves struggling young, childless adults out in the cold. Yes, these Millennials may qualify for different—smaller—tax credits if they’re under 25, but this only aids those most likely to still rely on their parents financially.

Coincidentally, the EITC excludes adults between 18 and 24 with no children, who don’t live with their parents and who don’t go to school. Yet this segment of the population is falling through the cracks, going broke because they simply can’t get by in this economy with what they have available to them. Generation Progress is one group looking to make the EITC available to young Millennials through more generous phase-in and phase-out periods to assist these adults in the margins. Crucially, the EITC is not an open-ended type of financial care; it’s just a means for young and emerging adults to get some help until they’re financially stable enough to support themselves.

Would the Credit Be Enough?

It’s hard to say whether a single tax credit would be enough to help an entire generation that’s struggling. Social welfare programs already in existence, like food stamps and social security, cut the poverty rate in the United States significantly. It’s possible that extending the EITC to Millennials will give them just the boost they need to begin lives filled with success.

Tax Breaks for New Parents

Tax Breaks For New Parents
Tax Breaks For New Parents

Having a child changes your life in countless ways, one of which is how you are taxed. New parents unlock several different tax breaks not otherwise offered which are designed to make raising a family financially easier. Here’s a look at a few of them.

Adoption Credit/Adoption Assistance

If you adopt a child, you might be able to use the costs associated with the adoption to reduce your tax burden. Adoption tax breaks come in two forms: a tax credit and a tax exclusion for adoption assistance provided by an employer. These apply if the adopted person is under 18 or unable to care for themselves. In 2013, the overall amount was worth up to $12,970 per child.

Here’s how it works: In one example provided by the IRS, you pay $12,970 in adoption expenses. You receive $2,970 from your employer to help, which lets you reduce your gross (taxable) income by that amount. The remainder ($10,000) becomes a tax credit—so you owe $10,000 less in taxes.

Higher Education Tuition Deduction

If you pay for a child’s higher education at an eligible institution, you can probably deduct many of the expenses and fees involved. The IRS defines an eligible institution as “any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions.” 

Regardless of whether you take the standard deduction or itemize your deductions, you can adjust your taxable income by up to $4,000 by paying for the education of a dependent. Tuition and fees are deductible, but some expenses (such as room and board) are not. 

Child Tax Credit

In perhaps the simplest of all child-driven tax breaks, the child tax credit might let you “reduce your federal income tax by up to $1,000 for each qualifying child under the age of 17,” per the IRS. There are several conditions to this credit, which are easy to meet for many, if not most, families.  For instance:

  • The child must be under the age of 17
  • The child must live with the taxpayer for the majority of the year
  • the child itself must provide less than half of their support

A phase-out of the credit starts at the following income levels: $110,000 for married taxpayers filing jointly, $55,000 for separately-filing married taxpayers, and $75,000 for everyone else.

Earned Income Tax Credit (EITC)

This one’s a bit more complicated than the child tax credit, but can be just as rewarding. The EITC applies to some individuals with no children, but its amount scales up the more children there are in a family. In an IRS-provided example from 2013, a joint-filing married couple making less than $48,378 (in both earned an adjusted gross income) with two qualifying children could receive a $5,372 maximum credit. With three or more children, the maximum income goes to $51,567 and the maximum credit leaps to $6,044. Several more combinations work as well, so some research may be necessary to see if your family qualifies. Note: to receive the EITC, a family must have earned no more than $3,300 in investment income.

Having a child can be a wonderful, if stressful, experience. However, new parents can rest a bit easier knowing that there are new tax options open to them. Contact an R&G Brenner tax professional to see if you qualify for these tax exemptions, credits and deductions and new parents can spend more time enjoying their family, and less time stressing about their finances. 

Will Inflation Affect Your 2014 Taxes?

How Inflation Affects Your Taxes
How Inflation Affects Your Taxes

Everyone know the old adage ‘The only things certain in life are death and taxes”. As it turns out, inflation may have to be included in this saying. Inflation decreases the value of money as time goes on, ultimately making the dollar of today worth more than the dollar of the future. It influences how much we spend on everyday items, how much we make, and how much things like houses and cars cost. It even helps dictate what we owe the government come April 15th. In fact, in regards to tax season, inflation can actually help us save a few bucks.

The Rate of Inflation

In the past few years, the rate of inflation has been consistently inconsistent: it has fluctuated among the one, two, or three percentiles (with a few months that presented negative numbers). While inflation isn’t always all that noticeable on a month-to-month basis, its impact is truly felt over a period of several years. For example, according to the Bureau of Labor and Statistics, a $250,000 house purchased in 2008 would be worth approximately $270,000 in present day (if inflation is the only variable taken into consideration).

Inflation and Taxes

Each year, annual inflation leads to a number of tax changes. In 2014, per the Internal Revenue Service, more than 40 tax provisions are scheduled to be adjusted. Some of these adjustments include:

  • Tax Rate: The 2014 rate has changed to 39.6 percent for singles who have an income level higher than $406,750 and married couples (filing a joint return) who have an income level higher than $457,600. These numbers are up from $400,000 and $450,000, respectively.
  • Deductions: The 2014 standard deduction amount has increased to $6,200 for singles and $12,400 for married couples (filing a joint return). These numbers are up from $6,100 and $12,200, respectively. The 2014 standard deduction amount for heads of the household also increases, up to $9,100 from $8,950.
  • Personal Exemptions: The 2014 personal exemption amount rises to $3,950, up from $3,900. However, this phases out at $376,700 (for singles) and $427,550 (for married couples who are filing a joint return).
  • Earned Income Credit: The 2014 maximum Earned Income Credit rises to $6,143 for married taxpayers (who are filing jointly and have three or more qualifying children). This is an increase from the 2013 amount of $6,044.
  • Estate Exclusions: For people who pass away in 2014, the basic exclusion amount for their estates to descendants rises to $5,340,000. This is an increase from $5,250,000 for the estates of decedents for people who died in 2013.
  • Foreign Earned Income: The 2014 foreign earned income increases to $99,200. This is an increase from the 2013 amount of $97,600.
  • Alternative Minimum Tax Exemption: The 2014 Alternative Minimum Tax Exemption increases to $52,800 for singles and to $82,100 for married couples (filing jointly). This is an increase from the 2013 amounts of $51,900 and $80,800, respectively.

Provisions that Remain Unchanged

Despite the rate of inflation, some tax provisions remain unchanged. For example, the 2014 annual exclusion for gifts is $14,000 (the same as it was in 2013). Healthcare flexible spending arrangements (FSA) also stay at their 2013 level: the annual dollar limit on employer contributions to employer sponsored health FSAs remains at $2,500.

Do I Qualify for the Earned Income Tax Credit (EITC)?

Do You Qualify For The EITC?
Do You Qualify For The EITC?

Although the Earned Income Tax Credit (EITC) can sound daunting and confusing for taxpayers and tax professionals alike, there are ways to navigate the murky waters of this credit to maximize its benefits. This tool can be important for low- and middle-income families and singles looking to save money where they can. Breaking down this tax credit isn’t difficult once you understand what it is and how to file for it.

What is the EITC Credit?

Approved in 1975 by Congress, The EITC is a refundable federal income tax credit designed primarily for low- to middle-income working people to not only mitigate the burden of paying taxes for social security but also to give singles and families an incentive to work. The individual who qualifies for the EITC receives a tax refund, according to the Internal Revenue Service (IRS). Basically, the EITC increases a taxpayers refund by 100% of the value of the credit.  What exactly is earned income? Well, this includes all taxable income a person gets from working or obtains through payments for disability. Broken down in more detail, it includes any income received from salaries, tips and pay; benefits as a result of a union strike; long-term disability pay before the age of retirement; and net earnings from being self-employed.

Do I Qualify?

Taxpayers are required to meet certain requirements to be able to take advantage of the EITC. They must file a tax return even in the event they don’t owe taxes. If you don’t owe taxes, you don’t need to file a tax return typically, but to qualify for the credit you must file either way. The money you have earned must have come from gainful employment by someone else or through self-employment, plus it must meet rules set forth by the IRS. There are also additional rules for workers who do not have a qualifying child or do not have a child meeting those rules for them. In general, EITC rules state that:

  • you must have a valid social security number
  • you must currently be receiving income from some source, whether through someone else or self-employment
  • must file as married filing jointly
  • you must be a U.S. citizen, resident alien for the entire year, or a nonresident alien who is married to someone who is a U.S. citizen or resident alien.

Further rules state that you can’t be a qualifying child for someone else, you can’t file Form 2555 or 2555-EZ, you must meet certain gross and earned income limits, and income from your investments must not exceed certain stated limits. The IRS lists all the restrictions and EITC qualifications on its website. Keep in mind there are special rules that apply to the military, clergy members, those getting disability payments, and those affected by natural disasters.

Everything you want to know about EITC can be found here. The IRS recommends gathering all the necessary documents before filing your taxes. If you need assistance especially in regards to filing for the EITC, contact an R&G Brenner Tax professional today, and we will be happy to assist you.

IRS Answered Only 61% Of Calls In 2013

IRS Did Not Answer 4 Out Of Every 10 Calls
IRS Did Not Answer 4 Out Of Every 10 Calls

In a recent report by National Taxpayer Advocate Nina Olsen, the IRS was only able to answer 61% of phone calls made by taxpayers to the agency. Just 10 years ago, the IRS was able to address 87% of calls.  The reasons cited were the increasing complexity of tax questions unable to be answered by automated systems as a result of the overall increasing complexity of the tax code.  This coupled with budget cuts to the agency resulted in nearly 4 out of 10 calls being dropped or unable to be addressed.  As a result, the IRS is requesting an immediate increase in funding:

“The I.R.S. has been chronically underfunded for years now, at the same time it has been required to take on more and more work, including administering benefit programs for some of the most challenging populations,” the report says. “Without adequate funding, the I.R.S. will fail at its mission.”

Furthermore, the report goes on to cite bad “tax moral” continuing to build if this trend is not reversed soon, as well as a need for greater protection of taxpayer data to prevent identity theft as well as assisting taxpayers who are victims of identity theft, doing a better job in cases where the I.R.S. inappropriately bars taxpayers from receiving the earned-income tax credit, and more oversight of paid income tax preparers.

Read the the report here.

Refunds Delayed For Some Low-Income Taxpayers

Refund Delays For Some

According to a recent article, refunds are being delayed for some lower income taxpayers; especially those that file for the Earned Income Tax Credit (EITC).  The primary reason for the delay is these taxpayers tend to file early, and these returns are particularly susceptible to Identity Theft & fraud.  Highlights include:

  • Delays are due to the closer scrutiny the IRS is paying to these returns in an effort to combat fraud/Identity Theft
  • IRS spokesmen Terry Lemons claims that fewer than 5% of these types of tax returns are being delayed
  • Wal-Mart has reported that they have cashed $1.7 Billion in refund checks this year so far, compared to about $3 billion in 2012.  This significant drop is attributed to the delay in the tax filing season this year.
  • Over 13 million filers claimed the EITC last year.  Using the 5% figure above, that equates to about 650,000 delayed refunds
  • The IRS is asking taxpayers to provide documentation for children living with them like birth certificates, doctors bills or report cards

Source: Reuters

IRS Launches EITC Awareness Day

EITC Awareness Day

In an effort to educate low income taxpayers on the benefits of the Earned Income Tax Credit (EITC), the IRS has launched EITC Awareness Days. Please watch the IRS Video below for more information.  Highlights include:


  • 1 in 5 Taxpayers Who Qualify for EITC fail to Claim the Credit
  • Average Credit Amount is $2,200; But Can Be as High as $5,800
  • Size of Credit Depends on Taxpayer’s Income & Family Size Amongst Other Factors
  • EITC Can be Claimed & Refund Received Even If Taxpayer Is Not Required To File a Tax Return


Tax Benefits Increase for 2012

Even in the face of severe federal & state deficits, many tax benefits are due to raise for tax year 2012 (calendar year 2013).  By law, tax provisions are required to keep pace with inflation.  The new dollar amounts affecting most taxpayers are:

Individual Deductions and Credits

  • Personal and dependent exemptions are $3,800, up $100 from 2011
  • The new standard deduction is $11,900 for married couples filing a joint return, up $300
    • $5,950 for singles and married individuals filing separately, up $150
    • $8,700 for heads of household, up $200
  • Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $70,700, up from $69,000 in 2011.

Credits, Deductions & Related Phase Outs 

  • The maximum earned income tax credit (EITC) for low- and moderate- income workers and working families rises to $5,891, up from $5,751 in 2011.
  • The maximum income limit for the EITC rises to $50,270, up from $49,078
  • The foreign earned income deduction rises to $95,100, up from $97,300–an increase of $2,200.
  • The modified adjusted gross income threshold at which the lifetime learning credit begins to phase out is $104,000 for joint filers, up from $102,000
    • $52,000 for singles and heads of household, up from $51,000
  • Annual deductible amounts for Medical Savings Accounts (MSAs) increased from the tax year 2011 amounts; please see the table below.

Medical Savings Accounts (MSAs)

Self-only coverage

Family coverage

Minimum annual deductible



Maximum annual deductible



Maximum annual out-of-pocket expenses



  • The $2,500 maximum deduction for interest paid on student loans begins to phase out for a married taxpayers filing a joint returns at $125,000 and phases out completely at $155,000, an increase of $5,000 from the phase out limits for tax year 2011. For single taxpayers, the phase out ranges remain at the 2011 levels

Estate & Gift 

  • For an estate of any decedent dying during calendar year 2012, the basic exclusion from estate tax amount is $5,120,000, up from $5,000,000 for calendar year 2011. Also, if the executor chooses to use the special use valuation method for qualified real property, the aggregate decrease in the value of the property resulting from the choice cannot exceed $1,040,000, up from $1,020,000 for 2011.
  • The annual exclusion for gifts remains at $13,000.


  • The monthly limit on the value of qualified transportation benefits exclusion for qualified parking provided by an employer to its employees for 2012 rises to $240, up $10 from the limit in 2011. However, the temporary increase in the monthly limit on the value of the qualified transportation benefits exclusion for transportation in a commuter highway vehicle and transit pass provided by an employer to its employees expires and reverts to $125 for 2012.
  • Several tax benefits are unchanged in 2012. For example, the additional standard deduction for blind people and senior citizens remains $1,150 for married individuals and $1,450 for singles and heads of household
If you would like more information on inflation adjustments and it can affect your tax status, contact an R&G Brenner representative today for assistance.
Source:  IRS.gov

Are you Eligible for the Earned Income Tax Credit?

With the unemployment rate soaring, more taxpayers than ever will qualify for the Earned Income Tax Credit.  The Earned Income Tax Credit also known as EITC, is a refundable tax credit that was created to assist low to moderate income individuals and families.  This year the EITC can mean up to $5,666 for some families, and that is only the federal credit.  For those who live in New York there is an additional credit on the NYS income tax return as well.  Take a look at the Federal income limitations and credit amounts for the current tax filing 2010.

Tax Year 2010 Income Limits

Earned income and adjusted gross income (AGI) must each be less than:

  • $43,352 ($48,362 married filing jointly) with three or more qualifying children
  • $40,363 ($45,373 married filing jointly) with two qualifying children
  • $35,535 ($40,545 married filing jointly) with one qualifying child
  • $13,460 ($18,470 married filing jointly) with no qualifying childrenInvestment income must be $3,100 or less for the year

Tax Year 2010 maximum credit:

  • $5,666 with three or more qualifying children
  • $5,036 with two qualifying children
  • $3,050 with one qualifying child
  • $457 with no qualifying children

If you are unsure whether or not you qualify for this credit you can use the EITC Calculator, or visit your local R&G Brenner Income Tax Professional.

Source: EITC.irs.gov