Ready to file your tax return? Here are 10 quick facts about the upcoming tax season that you need to know:
1. Tax season opens on January 23, 2017. Taxpayers who e-file can submit returns to their software provider or tax professional before that date, but the returns will not be accepted by IRS until the systems open. More than four out of five taxpayers are expected to e-file their return either on their own or with the help of a tax professional.
2. Taxpayers have a few extra days to file their 2016 returns this year. The due date is April 18, 2017, and not April 15, 2017. That’s because April 15, 2017, falls on a Saturday which would normally result in a move to the following Monday (April 17, 2017). However, this year, Emancipation Day falls on Monday, April 17. Since that’s a legal holiday in the District of Columbia, the tax filing deadline will be pushed ahead for all individual taxpayers to Tuesday, April 18, 2017.
3. FreeFile is now open. The program, available through the Internal Revenue Service (IRS) website, partners with commercial partners to provide free filing software for about 100 million taxpayers with incomes of $64,000 or less. Seven in ten of the nation’s taxpayers are eligible for IRS FreeFile.
4. Some taxpayers will have their tax refunds delayed. A new law requires the IRS to hold refunds tied to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until February 15. The hold allows IRS to match information from forms W-2 and 1099 with information reported on tax returns; in prior years, refunds could be issued before forms were matched which increased the likelihood of fraud. The hold, together with bank processing times and bank holidays, means that taxpayers should not count on seeing those tax refunds until the week of February 27.
5. You will need an appointment for in-person tax assistance from the IRS. In prior years, IRS served taxpayers on a first-come, first-served basis but for 2017, you’ll need an appointment for in-person tax help at all IRS Taxpayer Assistance Centers (TAC). To schedule an appointment, taxpayers can call 844.545.5640. You can also use the TAC tool to find a location near you.
6. The IRS anticipates issuing more than 9 out of 10 taxpayer refunds in less than 21 days. The “Where’s My Refund?” tool is available on IRS.gov and mobile (the IRS2Go app, available through Google Play, the Apple Store, and Amazon) and is the best way to check the status of a refund. You can begin checking the status of your refund within 24 hours after the IRS has received your e-filed tax return or four weeks after mailing your paper return.
7. Eight out of 10 taxpayers will receive their tax refunds by using direct deposit rather than requesting a paper check. According to the IRS, e-filing your return together with direct deposit is the fastest way to receive your refund.
8. Anyone who prepares federal tax returns for compensation must have a valid 2017 PTIN. PTINs don’t last forever: they must be renewed each year. Without a current PTIN, a tax preparer is not allowed to prepare your return. You can check out PTIN qualifications on your own by using the IRS online PTIN directory.
9. Under a new law, an Individual Taxpayer Identification Number (ITIN) that has not been used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return after Sunday, January 1, 2017, unless renewed by the taxpayer (this is a departure from the “once in the last five years” rule from 2013). Also, any ITIN with middle digits of either 78 or 79 (meaning 9NN-78-NNNN or 9NN-79-NNNN) will also expire on that date. Any taxpayers filing a tax return this season with an expired ITIN could experience return processing and refund delay as well as denial of some tax benefits until the ITIN is renewed.
10. To help combat identity theft and refund fraud, beginning in 2017, taxpayers who self-prepare returns using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns on the IRS website.