Today, January 23, 2017, is the official first day of tax season. Here are 5 important things to know before you file your taxes.
1. Filing Deadline
The filing deadline this year is actually April 18, 2017. The 15th falls on a Saturday which pushes the deadline to the next business day. Monday the 17th is a holiday in Washington D.C. (Emancipation Day) thus making the deadline Tuesday April 18th.
2. Delayed Refunds
Some refunds will be delayed this year. The IRS is holding onto refunds on tax returns that have an Earned Income Tax Credit or an Additional Child Tax Credit. Both of these credits are for low income earners and have many requirements to qualify. The IRS will be holding these returns until at least February 15th to ensure that these credits are not claimed fraudulently.
Remember that scammers love tax time. Every year there are new scams going around where criminals try to impersonate the IRS and get people to reveal sensitive information. If you get an unsolicited email or phone call that claims to be from the IRS it is a scam. The IRS will only contact you by letter. It’s that simple.
4. Health Insurance
Just like last year, everyone in a taxpayer’s household was required to have health insurance in 2016. If you or someone in your household didn’t have health insurance during any of the 12 months of 2016, be aware that you could face a tax penalty. The penalty can be complicated to calculate and requires more information to be entered so be prepared for your tax return to tax a little longer to complete. Also, if you use a tax professional to file your taxes be aware there could be an additional fee for the extra forms that go along with calculating the penalty.
If you paid for tuition for yourself or a qualified relative you could qualify for the American Opportunity Credit. Your accountant is now required to fill out a due diligence checklist when claiming this credit. This checklist requires the taxpayer to provide the tax preparer with an actual receipt for tuition paid. In the past you could just rely on the form 1098-T but that wont be the case going forward.
If you have any questions as you are gathering all of your tax documents, please do not hesitate to give me a call or shoot me an email.