WASHINGTON — The Internal Revenue Service today opened the 2013 filing season by announcing a variety of enhanced products and services to help taxpayers prepare and file their tax returns by the April 15 deadline.
New and expanded services for taxpayers this year include a redesigned IRS.gov web site that’s easier to navigate and improved service options, including more video-conferencing assistance sites and additional social media tools. In addition, the IRS has stepped up its enforcement efforts to protect taxpayers from refund fraud and identity theft.
The IRS began accepting and processing most individual tax returns today after updating forms and completing programming and testing of its processing systems to reflect the American Taxpayer Relief Act (ATRA) that Congress enacted on Jan. 2. The vast majority of taxpayers can file now, but the IRS is continuing to update its systems for some tax filers. The IRS will begin accepting tax returns from people claiming education credits in mid-February while taxpayers claiming depreciation deductions, energy credits and many business credits will be able to file in late February or early March. A full list of the affected forms is available on IRS.gov.
This year, taxpayers have until Monday, April 15, to file their 2012 tax returns and pay any tax due. The IRS expects to receive more than 147 million individual tax returns this year, with about 75 percent projected to receive a refund.
Last year for the first time, 80 percent of all individual returns were filed electronically. E-file, when combined with direct deposit, is the fastest way to get a refund. Last year, about three out of four refund filers selected direct deposit.
If you need assistance filing your tax return or if you just have questions about filing you may call Tax On Wheels, LLC at 803 732-4288
The IRS will begin processing most individual income tax returns on Jan. 30 after updating forms and completing programming and testing of its processing systems. The IRS anticipated many of the tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), but the final law requires some changes before the IRS can begin accepting tax returns.
The IRS will not process paper or electronic tax returns before the Jan. 30 opening date, so there is no advantage to filing on paper before then. Using e-file is the best way to file an accurate tax return, and using e-file with direct deposit is the fastest way to get a refund.
Many major software providers are accepting tax returns in advance of the Jan. 30 processing date. These software providers will hold onto the returns and then electronically submit them after the IRS systems open. If you use commercial software, check with your provider for specific instructions about when they will accept your return. Software companies and tax professionals send returns to the IRS, but the timing of the refunds is determined by IRS processing, which starts Jan. 30.
After the IRS starts processing returns, it expects to process refunds within the usual timeframes. Last year, the IRS issued more than nine out of 10 refunds to taxpayers in less than 21 days, and it expects the same results in 2013. Even though the IRS issues most refunds in less than 21 days, some tax returns will require additional review and take longer. To help protect against refund fraud, the IRS has put in place stronger security filters this filing season.
After taxpayers file a return, they can track the status of the refund with the “Where’s My Refund?” tool available on the IRS.gov website. New this year, instead of an estimated date, Where’s My Refund? will give people an actual personalized refund date after the IRS processes the tax return and approves the refund.
“Where’s My Refund?” will be available for use after the IRS starts processing tax returns on Jan. 30. Here are some tips for using “Where’s My Refund?” after it’s available on Jan. 30:
Please bookmark this page and return here for the latest information about the Jan. 30 tax season opening, tax law changes and tax refunds, or call Tax On Wheels, LLC at 803 732-4288
WASHINGTON — Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on Jan. 30.
The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted Jan. 2. The announcement means that the vast majority of tax filers — more than 120 million households — should be able to start filing tax returns starting Jan 30.
The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.
“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”
The IRS will not process paper tax returns before the anticipated Jan. 30 opening date. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.
“The best option for taxpayers is to file electronically,” Miller said.
The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on Jan. 1, 2013, with many affecting tax returns for 2012. While the IRS worked to anticipate the late tax law changes as much as possible, the final law required that the IRS update forms and instructions as well as make critical processing system adjustments before it can begin accepting tax returns.
The IRS originally planned to open electronic filing this year on Jan. 22; more than 80 percent of taxpayers filed electronically last year.
Who Can File Starting Jan. 30?
The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.
Who Can’t File Until Later?
There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.
The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available on IRS.gov.
As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure as smooth a tax season as possible under the circumstances.
If you have questions about how the delayed filing season affects please contact Tax On Wheels, LLC at 803 732-4288.
The congress has passed and the President has signed into law The American Taxpayer relief act of 2012. This bill is over 150 pages and retroactively extends many provisions that were slated to expire The law also permanently patches the AMT (alternative minimum tax). The permanent patching of the AMT is alone worth any inconvenience we may endure this year.
The IRS is reviewing the details of the legislation and assessing the impact it will have on the tax filing season. We expect that the IRS will soon make some pronouncement regarding when taxpayers can begin filing tax returns. The tax e-filing season is scheduled to begin January 22, 2012, however, due to this last minute legislation just signed into law we anticipate that there will be some delay processing most if not all tax returns this year.
At this point many common tax forms have not been released by the IRS. We would not be surprised to find that processing for many of these forms has been delayed for a number of weeks, similar to the delays back in 2011 when late breaking legislation caused certain taxpayers to have to wait until February to file.
As a general rule, we encourage our clients to let other taxpayers be the first guinea pigs through the tax system to avoid software programming and processing issues. This year will be no different.
Tax On Wheels, LLC has installed our tax software for this year but it is not yet ready for production. We expect our tax software will be stable in another week or so, January 10, 2013. At that point we will begin taking appointments for fairly simple returns. Those with more complicated returns should probably wait until at least the end of January to schedule appointments. Remember, however, that even if we complete your appointment we may not be able to process your tax return until the IRS authorizes processing for all of the forms needed for your return.
Bottom line, expect delays this tax season.
Please feel free to contact Tax On Wheels, LLC at 803 732-4288 if you have questions or concerns about the coming tax season.
The IRS has some advice for taxpayers who missed the tax filing deadline.
Don’t panic but file as soon as possible. If you owe money the quicker you file your return, the less penalties and interest you will have to pay. Even if you have to mail us your return, the sooner we receive it, the better.
E-file is still your best option. IRS e-file programs are available for most taxpayers through the extension deadline – October 15, 2012.
Free File is still available. Check out IRS Free File at irs.gov/freefile. Taxpayers whose income is $57,000 or less will qualify to file their return for free through IRS Free File. For people who make more than $57,000 and who are comfortable preparing their own tax return, the IRS offers Free File Fillable Forms. There is no software assistance with Free File Fillable Forms, but it does the basic math calculations for you.
Pay as much as you are able. Taxpayers who owe tax should pay as much as they can when they file their tax return, even if it isn’t the total amount due, and then apply for an installment agreement to pay the remaining balance.
Installment Agreements are available. Request a payment agreement with the IRS. File Form 9465, Installment Agreement Request or apply online using the IRS Online Payment Agreement Application available at irs.gov.
Penalties and interest may be due. Taxpayers who missed the filing deadline may be charged a penalty for filing after the due date. Filing as soon as possible will keep this penalty to a minimum. And, taxpayers who did not pay their entire tax bill by the due date may be charged a late payment penalty. The best way to keep this penalty to a minimum is to pay as much as possible, as soon as possible.
Although it cannot waive interest charges, the IRS will consider reductions in these penalties if you can establish a reasonable cause for the late filing and payment. Information about penalties and interest can be found at Avoiding Penalties and the Tax Gap.
Refunds may be waiting. Taxpayers should file as soon as possible to get their refunds. Even if your income is below the normal filing requirement, you may be entitled to a refund of taxes that were withheld from your wages, quarterly estimated payments or other special credits. You will not be charged any penalties or interest for filing after the due date, but if your return is not filed within three years you could forfeit your right to the refund.
Please call Tax On Wheels, LLC at 803 732-4288 if you need assistance with your tax filing obligations.
WASHINGTON — The Internal Revenue Service today reminded taxpayers that 2011 federal income tax returns, extension requests and tax payments are due by April 17, 2012. For people unable to pay their taxes in full by that date, payment agreements and other relief are usually available and can even be requested online.
Taxpayers will avoid late filing penalties if they file either their income tax return or a request for a tax-filing extension by midnight on Tuesday. The late-filing penalty, normally five percent per month based on the unpaid balance, applies to returns filed after the deadline. Taxpayers should file, even if they can’t pay the full amount due.
Any payment made by April 17 will reduce or eliminate interest and late-payment penalties that apply to payments made after that date. The current interest rate is three percent per year, compounded daily, and the late-payment penalty is normally 0.5 percent per month.
Whether paying tax in full or in part, the fastest and easiest way to do so is by using one of the electronic payment options. E-pay options include:
• Electronic Federal Tax Payment System (EFTPS). This free service gives taxpayers a safe and convenient way to pay individual and business taxes by phone or online. To enroll or for more information, call 800-316-6541 or visit eftps.gov.
• Electronic funds withdrawal. E-file and e-pay in a single step.
• Credit or debit card. Both paper and electronic filers can pay their taxes by phone or online through any of several authorized credit and debit card processors. Though the IRS does not charge a fee for this service, the card processors do. For taxpayers who itemize their deductions, these convenience fees can be claimed on Schedule A Line 23.
Taxpayers who choose to pay by check or money order should make the payment out to the “United States Treasury.” Write “2011 Form 1040,” name, address, daytime phone number and Social Security number on the front of the check or money order. To help insure that the payment is credited promptly, also enclose a Form 1040-V payment voucher.
In many cases, those struggling with unpaid taxes qualify for one of several relief programs, including those recently expanded under the IRS “Fresh Start” initiative. These include the following:
• Most people can set up a payment agreement with the IRS on line in a matter of minutes. Those who owe $50,000 or less in combined tax, penalties and interest can use the Online Payment Agreement to set up a monthly payment agreement for up to six years. Taxpayers can choose this option even if they have not yet received a bill or notice from the IRS. Alternatively, taxpayers can request a payment agreement by filing eft. This form can be downloaded from IRS.gov and mailed along with a tax return, bill or notice.
• Most unemployed filers and self-employed individuals whose business income dropped substantially can apply for a six-month extension of time to pay. Eligible taxpayers will not be charged a late-payment penalty if they pay any tax, penalty and interest due by Oct. 15, 2012. Taxpayers qualify if they were unemployed for any 30-day period between Jan. 1, 2011 and April 17, 2012. Self-employed people qualify if their business income declined 25 percent or more in 2011, due to the economy. Income limits and other special rules apply. Apply using Form 1127-A.
• Some struggling taxpayers may qualify for an offer-in-compromise. This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Generally, an offer will not be accepted if the IRS believes the liability can be paid in full as a lump sum or through a payment agreement. The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay.
Details on all filing and payment options are on IRS.gov.
Please contact Tax On Wheels, LLC at 803 732-4288 if you need assistance with these or any other tax issues.
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Even though the tax filing deadline is later than usual this year – April 17 – many taxpayers may still need more time to file their tax return. If you need extra time, you can get an automatic six-month extension of time to file from the IRS.
Here are seven important things you need to know about filing an extension:
1. File on time even if you can’t pay If you completed your return but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. To pay the balance, apply online for a payment plan using the Online Payment Agreement application at www.irs.gov or send Form 9465, Installment Agreement Request, with your return. If you are unable to make payments, call the IRS at 800-829-1040 to discuss your options.
2. Extra time to file An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the April 17 deadline, plus you may owe penalties.
3. Form to file Request an extension to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return to the IRS. It must be postmarked by April 17, 2012. You also can make an extension-related electronic credit card payment. For more information about extension-related credit card payments, see Form 4868.
4. E-file extension You can e-file an extension request using tax preparation software with your own computer or by contacting Tax On Wheels, LLC and using our state of the art software. You must e-file the request by midnight on April 17, 2012. The IRS will acknowledge receipt of the extension request if you e-file your extension.
5. Traditional Free File and Free File Fillable Forms You can use both Free File options to file an extension. Access the Free File page at www.irs.gov.
6. Electronic funds withdrawal If you ask for an extension via one of the electronic methods, you can also pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the appropriate bank routing and account numbers. For information about these and other methods of payment, visit the IRS website at www.irs.gov or call 800-TAX-1040 (800-829-1040).
7. How to get forms Form 4868 is available for download from the IRS website or you can pick up the form at your local IRS office. You can find a link to the form 4868 on our forms page.
Please feel free to contact Tax On Wheels, LLC at 803 732-4288 if we can be of assistance to you.
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The tax filing deadline is just around the corner. The IRS has 10 tips to help taxpayers still working on their tax returns:
1. File electronically Most taxpayers file electronically. If you haven’t tried it, now is the time! The IRS has processed more than 1 billion individual tax returns safely and securely since the nationwide debut of electronic filing in 1990. In fact, 112 million people — 77 percent of all individual taxpayers — used IRS e-file last year.
2. Check the identification numbers Carefully check identification numbers — usually Social Security numbers — for each person listed. This includes you, your spouse, dependents and persons listed in relation to claims for the Child and Dependent Care Credit or Earned Income Tax Credit. Missing, incorrect or illegible Social Security numbers can delay or reduce a tax refund.
3. Double-check your figures If you are filing a paper return, double-check that you have correctly figured the refund or balance due.
4. Check the tax tables If you e-file, the software will do this for you. If you are using Free File Fillable Forms or a paper return, double-check that you used the right figure from the tax table for your filing status.
5. Sign your form You must sign and date your return. Both spouses must sign a joint return, even if only one had income. Anyone paid to prepare a return must also sign it and enter their Preparer Tax Identification Number.
6. Send your return to the right address If you are mailing a return, find the correct mailing address at www.irs.gov. Click the Individuals tab and the “Where to File” link under IRS Resources on the left side.
7. Pay electronically Electronic payment options are convenient, safe and secure methods for paying taxes. You can authorize an electronic funds withdrawal, or use a credit or a debit card. For more information on electronic payment options, visit www.irs.gov.
8. Follow instructions when mailing a payment People sending a payment should make the check payable to the “United States Treasury” and should enclose it with, but not attach it to, the tax return or the Form 1040-V, Payment Voucher, if used. The check should include the Social Security number of the person listed first on the return, daytime phone number, the tax year and the type of form filed.
9. File or request an extension to file on time By the April 17 due date, you should either file a return or request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.
10. Visit IRS.gov Forms, publications and helpful information on a variety of tax subjects are available at www.irs.gov.
Please contact Tax On Wheels, LLC at 803 732-4288 if you need assistance with these or any other tax issues.
If you need to make a payment with your tax return this year, the IRS wants you to know about its payment options. Here are 10 important facts to help you make your tax payment correctly.
1. Never send cash!
2. If you file electronically, you can file and pay in a single step by authorizing an electronic funds withdrawal via tax preparation software or a tax professional.
3. Whether you file a paper return or electronically, you can pay by phone or online using a credit or debit card.
4. Electronic payment options provide an alternative to checks or money orders. You can pay taxes or user fees 24 hours a day, seven days a week. Visit the IRS website at www.irs.gov and search e-pay, or refer to Publication 3611, Electronic Payments for more details.
5. If you itemize, you may be able to deduct the convenience fee charged for paying individual income taxes with a credit or debit card as a miscellaneous itemized deduction on Form 1040, Schedule A, Itemized Deductions. The deduction is subject to the 2 percent limit.
6. If you file on paper, you can enclose your payment with your return but do not staple it to the form.
7. If you pay by check or money order, make sure it is payable to the “United States Treasury.”
8. Always provide on the front of your check or money order your correct name, address, Social Security number listed first on the tax form, daytime telephone number, tax year and form number.
9. Complete and include Form 1040-V, Payment Voucher, when mailing your payment to the IRS. Double-check the IRS mailing address. This will help the IRS process your payment accurately and efficiently.
10. For more information, call 800-829-4477 and select TeleTax Topic 158, Ensuring Proper Credit of Payments. You can also find out more in Publication 17, Your Federal Income Tax and Form 1040-V, both available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).
Please contact Tax On Wheels, LLC at 803 732-4288 if you need assistance with this or any other tax issue.
The IRS is having issues with the Modernized e-File (MeF) System. MeF is the new and improved e-filing system being implemented this year by the IRS. The IRS has asked that transmitters send as many tax returns through the MeF system as possible in order to stress test the system. The IRS, however, has also retained the ability to process tax returns through the legacy system that was the primary vehicle for processing returns prior to the the current tax season. The IRS has now asked transmitters to revert to sending returns through the legacy system until they work out the bugs in the new MeF system over the next week or so.
The MeF system was supposed to speed up your receipt of tax refunds to a matter of days instead of a matter of weeks. However, taxpayers who had their tax returns sent through the MeF system have experienced delays in receiving their refunds. Also, there have been problems with information not displaying properly in the Where’s My Refund Tool on the IRS website. We have been told that this issue will also be resolved shortly.
There is nothing that individual taxpayers need to do regarding this issue aside from simply being aware of the possible delay in refunds. Everything is being handled by the cog turners at the IRS. Hopefully, everything will be resolved shortly.
Please give us a call at 803 732-4288 if you have questions about the status of your refund.