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IRS Tax Tip: Tax Filing Season is Here – Things for Taxpayers to Consider

IRS Tax Tip: Tax Filing Season is Here – Things for Taxpayers to Consider

The IRS is now accepting tax returns as the annual tax filing season is underway. The IRS expects taxpayers to file more than 155 million returns this year. Here are some things for taxpayers to consider as they are filing:

  • People have until Tuesday, April 17, 2018, to file their 2017 returns and pay any taxes due.
  • Choosing e-file and direct deposit is the fastest and safest way to file an accurate income tax return and receive a refund.
  • Families with incomes of $66,000 or less can file for free. They can do so using brand name software through the IRS Free File program. People who earned more than $66,000 may use Free File Fillable Forms.
  • By law, the IRS cannot issue some refunds before mid-February. These refunds are for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit. The IRS expects the earliest refunds related to EITC and ACTC to be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2018.
  • The best way for taxpayers to check the status of a refund is to use “Where’s My Refund?” ‎on IRS.gov or the IRS2Go mobile app.
  • Taxpayers with low and moderate incomes can get help filing their taxes for free. The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs have more than 12,000 sites around the country. To find the nearest site, use the VITA/TCE Site Locator on IRS.gov or the IRS2Go mobile app.
  • Taxpayers should have their year-end statements in hand before filing. This includes Forms W-2 from employers and Forms 1099 from banks and other payers. Doing this helps avoid refund delays and the need to file an amended return.
  • IRS.gov is the place to go online for tools that help people as they prepare and file their tax return. This includes:
  • Many Individual Taxpayer Identification Numbers expired on Dec. 31, 2017. This includes any ITIN not used on a tax return at least once in the past three years. Also, any ITIN with middle digits of 70, 71, 72 or 80 is now expired. Affected taxpayers should act soon to renew their number.
  • Some taxpayers using a tax filing software product for the first time may need their Adjusted Gross Income amount from their prior-year tax return. They need this to verify their identity. Taxpayers using the same tax software they used last year will not need to enter this information.

IRS Tax Tip: Taxpayers Can Choose to Itemize or Take Standard Deduction for Tax Year 2017

IRS Tax Tip: Taxpayers Can Choose to Itemize or Take Standard Deduction for Tax Year 2017

Most taxpayers claim the standard deduction when they file their federal tax return. However, some filers may be able to lower their tax bill by itemizing when they file their 2017 tax return. Before choosing to take the standard deduction or itemize, it’s a good idea to figure deductions using both methods and choose the method with the most benefit. The IRS offers the following tips to help taxpayers decide:

  • Figure Itemized Deductions. Taxpayers who itemize basically add up the year’s deductible expenses to arrive at their total deduction. Deductions include:
    • Home mortgage interest
    • State and local income taxes or sales taxes – but not both
    • Real estate and personal property taxes
    • Gifts to charities
    • Casualty or theft losses
    • Unreimbursed medical and employee business expenses above certain amounts
  • Know the Standard Deduction. For taxpayers who don’t itemize, the standard deduction for 2017 depends on their filing status:
    • Single — $6,350
    • Married Filing Jointly — $12,700
    • Head of Household — $9,350
    • Married Filing Separately — $6,350
    • Qualifying Widow(er) — $12,700

If a taxpayer is 65 or older, or blind, the standard deduction is more, but may be limited if another person claims that taxpayer as a dependent.

  • Use IRS Free File. Taxpayers who earned $66,000 or less in 2017 qualify to use free, brand-name software to prepare and file their federal tax returns electronically. IRS Free File software helps taxpayers determine if they should itemize. Taxpayers who can’t use Free File have other e-file options.
  • Check the Exceptions. There are some situations where the law doesn’t allow people to claim the standard deduction. This rule applies to married taxpayers who file separate returns, and either spouse itemizes. In this case, the standard deduction is zero and they should itemize any deductions.
  • Use IRS.gov Tool. Use the Interactive Tax Assistant on IRS.gov. There are several tools that can help people determine whether to itemize or take the standard deduction.
  • File the Right Forms. For taxpayers to itemize their deductions, they must file Form 1040 and Schedule A, Itemized Deductions. Filers can take the standard deduction on Forms 1040, 1040A or 1040EZ.

More Information:

IRS Tax Tip: Taxpayers Have Several Tax Return Preparation Options

IRS Tax Tip: Taxpayers Have Several Tax Return Preparation Options

As taxpayers look ahead to the April 17 filing deadline this year, they will consider how to prepare their return. Taxpayers have several options:

  • Prepare their own return:
    • E-file — Taxpayers can use commercial tax software to prepare and file their tax returns.   The software uses a question and answer format that makes doing taxes easier. After the taxpayer responds to the questions, the software selects the appropriate tax forms and does the calculations automatically. Once complete, the software securely transmits the return to the IRS.
    • Free File — Seventy percent of taxpayers have an adjusted gross income of $66,000 or less and are therefore eligible to file using free, brand-name software. Taxpayers can find the right software for them at IRS.gov.
    • Paper Forms — Free File Fillable Forms have no age, income or residency restrictions for taxpayers who are comfortable completing a paper return. Taxpayers can also find forms (/node/6) on IRS.gov, fill them out in Adobe Acrobat, and then print and mail them to the IRS. Taxpayers may also fill out their forms by hand after they print them. Taxpayers who mail a paper Form 1040, U.S. Individual Income Tax Return, should know that it can take six to eight weeks for the IRS to process their return.
  • Free Volunteer Tax Preparation — The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs provide free tax preparation help for qualifying taxpayers.
    • Volunteer Income Tax Assistance: This program is also known as VITA. IRS-certified volunteers provide free, basic income tax return preparation with electronic filing to eligible taxpayers who generally earn $54,000 or less.
    • Tax Counseling for the Elderly: TCE is mainly for people age 60 or older, but offers service to all taxpayers. The program focuses on tax issues unique to seniors. AARP participates in the TCE program through AARP Tax-Aide.
  • Tax Preparers — Professional tax preparers across the country provide paid tax preparation services. Taxpayers can visit the Choosing a Tax Professional page on IRS.gov for tips on choosing a preparer who fits their needs.

All taxpayers should keep a copy of their tax return. Taxpayers using a software product for the first time may need their adjusted gross income 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 at Validating Your Electronically Filed Tax Return.

IRS Tax Tip: IRS Alerts Taxpayers about Refund Scam

IRS Tax Tip: IRS Alerts Taxpayers about Refund Scam

The IRS warns taxpayers of a new twist on an old scam. Criminals are depositing fraudulent tax refunds into individuals’ actual bank accounts, then attempting to reclaim the refund from the taxpayers.

Here are the basic steps criminals follow to carry out this scam. The thief:

  • Hacks tax preparers’ computers to steal taxpayer data.
  • Uses the stolen information to file tax returns as the taxpayers.
  • Has refunds deposited into taxpayers’ bank accounts.
  • Contacts their victims, telling them the money was mistakenly deposited into their accounts and asking them to return it.

While the IRS is aware of variations of this scam, the agency also knows that this scam may continue to evolve. Here are two current versions of this scam:

  • Criminals pose as debt collection agency officials acting on behalf of the IRS. The thief contacts the taxpayer to report an erroneous refund deposit and request that the taxpayer forward the money to the thief’s collection agency.
  • The taxpayer who received the erroneous refund gets an automated call with a recorded voice saying the caller is from the IRS. The recording threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of his or her Social Security number. The recorded voice gives the taxpayer a phony case number and telephone number to call to return the refund.

Here are some things taxpayers should remember if someone contacts them about an erroneous refund:

  • There are established procedures taxpayers should follow to return erroneous funds to the IRS. Tax Topic Number 161 – Returning an Erroneous Refund has full details about how to return the money, including the actual mailing addresses where a taxpayer should send a paper check, if necessary. By law, interest may accrue on erroneous refunds.
  • The IRS encourages taxpayers to discuss the issue with their financial institutions because there may be a need to close bank accounts.
  • Taxpayers receiving erroneous refunds also should contact their tax preparers immediately.

IRS Tax Tip: IRS Can Help Taxpayers Get Form W-2

IRS Tax Tip: IRS Can Help Taxpayers Get Form W-2

Most taxpayers got their Form W-2, Wage and Tax Statement, by the end of January. Taxpayers need their W-2s to file an accurate tax returns, as the form shows an employee’s income and taxes withheld for the year.

Taxpayers who haven’t received their W-2 by the end of February should:

• Contact their Employer. Taxpayers should ask their current or former employer for a copy of their W-2. Be sure the employer has the correct address.

• Call the IRS. Taxpayers who are unable to get a copy from their employer by the end of February may call the IRS at 1-800-829-1040 for a substitute W-2. The IRS will send a letter to the employer on taxpayers’ behalf. When they call, taxpayers need their:

  • Name, address, Social Security number and phone number.
  • Employer’s name, address and phone number.
  • Employment dates.
  • Estimate of wages and federal income tax withheld in 2017. Use a final pay stub for these amounts.

• File on Time. Taxpayers should file their tax return by April 17, 2018. If they still haven’t received their W-2, they should use Form 4852, Substitute for Form W-2, Wage and Tax Statement. They should estimate their wages and taxes withheld as best as possible. To request more time to file, they should use Form 4868, Application for Automatic Extension of Time to File. Taxpayers can also e-file a request for more time using IRS Free File. Taxpayers should remember that an extension of time to file isn’t an extension of time to pay taxes owed. Taxpayers can also get an extension by paying all or part of their estimated income tax due, and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System, or a credit or debit card. This way, the taxpayer won’t have to file a separate extension form and will receive a confirmation number for their records.

• Correct a Tax Return, if Necessary. Taxpayers may need to correct their tax return. This could happen if they get a missing W-2 after they file. If the tax information on the W-2 is different from what they first reported, they may need to file an amended tax return. Use Form 1040X, Amended U.S. Individual Income Tax Return, to make the change.

All taxpayers should keep a copy of their tax return. Taxpayers using a software product for the first time may need their Adjusted Gross Income from last year’s tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

IRS TaxTip: Most Taxpayers Can File for Free

IRS TaxTip: Tax Filing Deadline is Soon, Remember Most Taxpayers Can File for Free

With April 17 tax filing deadline quickly approaching, the IRS reminds taxpayers that most of them qualify for free tax filing with IRS Free File. The special service is‎ available on IRS.gov and through the IRS2Go ‎mobile app. Both Android and iOS users can download this app. Taxpayers can use Free File to prepare and e-file their federal taxes either through brand-name software or using online fillable forms.

Here are the top ten facts about Free File:

  • Individuals or families with 2017 adjusted gross incomes of $66,000 or less can use Free File software.
  • There is no income limit to use Free File Fillable Forms, which are electronic versions of IRS paper forms.
  • Taxpayers can prepare their return at any time and schedule a tax payment as late as the April 17 deadline.
  • Taxpayers who cannot meet the April tax filing deadline can also use IRS Free File to request an automatic six-month extension. An extension gives them until Oct. 15, 2018, to file their return.
  • Each of the 12 commercial companies in the Free File Alliance has its own special offer.
  • Offers from software companies are generally based on age, income or state residency.
  • Taxpayers can review each company offer individually or the taxpayer can use a “Lookup” tool. This tool will help the taxpayer find the software for which they are eligible.
  • Some of the companies also offer free state return preparation.
  • Active duty military personnel with incomes of $66,000 or less may use any IRS Free File software product of their choice without regard to the criteria.
  • IRS Free File software does the work, including the math. It walks users through the tax preparation process using a series of questions while also helping to find tax changes that may affect their return.

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