Norvell and Associates Certified Public Accountants - 4 tax tips from IRS commissioner
Koskinen had some tips for taxpayers, who can begin filing as early as Tuesday, Jan. 20:
E-file your return
The IRS wants taxpayers to file their returns electronically. Ninety percent of those who e-file will get their refunds back in less than 21 days. File paper returns and expect to wait twice as long for refund. The traditional wait period of four to six weeks is expected to be extended by at least a week.
The IRS is launching its Free File program on Jan. 16, which can be used by anyone who earns no more than $60,000. That’s 70 percent of all taxpayers, or 100 million individuals and families, according to the IRS.
Last year, 3.2 million returns were filed using Free File, a 10 percent uptick from the previous year. The program is available through an agreement between the IRS and the 14 companies that form the Free File Alliance.
Be prepared for the health care question
This is the first year taxpayers will have to provide information about their health care coverage under the Affordable Care Act and the Foreign Account Tax Compliance Act, or FATCA.
The process will be easy for most taxpayers who receive their coverage through work or government programs like Medicaid. They only need to check a box on their Form 1040 return to indicate they had health insurance in 2014.
Others who got insurance through state and federal marketplaces will have to file a new form, while people who received subsidies will have to provide more detailed information.
People who didn't have health insurance last year face fines unless they qualify for a waiver, which requires more paperwork.
The new ACA requirements and the IRS’ cuts back are intertwined.
Republicans in Congress adamantly oppose Obama's health law, so some have been working to starve the IRS of funds just as its role in implementing the law ramps up.
Congress cut the IRS;s budget by $346 million for the fiscal year that ends Sept. 30. Koskinen told the Associated Press that the agency's $10.9 billion budget is its lowest since 2008. When adjusted for inflation, the budget hasn't been this low since 1998.
Koskinen said the agency is required by law to help implement the health program, and the cuts could cost the government at least $2 billion in lost tax revenue this year from a reduction in enforcement. He expects the agency will audit only million of the 150 million tax returns filed.
Wait for all your forms
Taxpayers need to wait until they receive information returns like W-2s or 1099s, so they have the data they need to prepare an accurate return. Some taxpayers will need information from the form 1095-A that they will receive from the Health Insurance Marketplace.
Koskinen warns that having to file an amended return could lead to extensive processing delays, including delays of refunds.
Don’t call if possible.
The IRS is encouraging taxpayers who have questions, or need forms to look for answers on the agency’s website.
On IRS.gov, taxpayers will find online tools such as “Where’s My Refund?” that checks the status of a refund, or IRS Direct Pay that offers a quick, easy and secure way to pay taxes online.
Related post: http://www.norvellcpas.com/
E-file your return
The IRS wants taxpayers to file their returns electronically. Ninety percent of those who e-file will get their refunds back in less than 21 days. File paper returns and expect to wait twice as long for refund. The traditional wait period of four to six weeks is expected to be extended by at least a week.
The IRS is launching its Free File program on Jan. 16, which can be used by anyone who earns no more than $60,000. That’s 70 percent of all taxpayers, or 100 million individuals and families, according to the IRS.
Last year, 3.2 million returns were filed using Free File, a 10 percent uptick from the previous year. The program is available through an agreement between the IRS and the 14 companies that form the Free File Alliance.
Be prepared for the health care question
This is the first year taxpayers will have to provide information about their health care coverage under the Affordable Care Act and the Foreign Account Tax Compliance Act, or FATCA.
The process will be easy for most taxpayers who receive their coverage through work or government programs like Medicaid. They only need to check a box on their Form 1040 return to indicate they had health insurance in 2014.
Others who got insurance through state and federal marketplaces will have to file a new form, while people who received subsidies will have to provide more detailed information.
People who didn't have health insurance last year face fines unless they qualify for a waiver, which requires more paperwork.
The new ACA requirements and the IRS’ cuts back are intertwined.
Republicans in Congress adamantly oppose Obama's health law, so some have been working to starve the IRS of funds just as its role in implementing the law ramps up.
Congress cut the IRS;s budget by $346 million for the fiscal year that ends Sept. 30. Koskinen told the Associated Press that the agency's $10.9 billion budget is its lowest since 2008. When adjusted for inflation, the budget hasn't been this low since 1998.
Koskinen said the agency is required by law to help implement the health program, and the cuts could cost the government at least $2 billion in lost tax revenue this year from a reduction in enforcement. He expects the agency will audit only million of the 150 million tax returns filed.
Wait for all your forms
Taxpayers need to wait until they receive information returns like W-2s or 1099s, so they have the data they need to prepare an accurate return. Some taxpayers will need information from the form 1095-A that they will receive from the Health Insurance Marketplace.
Koskinen warns that having to file an amended return could lead to extensive processing delays, including delays of refunds.
Don’t call if possible.
The IRS is encouraging taxpayers who have questions, or need forms to look for answers on the agency’s website.
On IRS.gov, taxpayers will find online tools such as “Where’s My Refund?” that checks the status of a refund, or IRS Direct Pay that offers a quick, easy and secure way to pay taxes online.
Related post: http://www.norvellcpas.com/