Barring any late glitches, the federal income tax return filing season is set to begin on Monday, Jan. 23, 2017, the IRS announced last week.
The last day for filing 2016 tax returns without an extension is Tuesday, April 18. The traditional tax due date of April 15 falls on a Saturday next year, which would normally move the filing deadline to the following Monday – April 17. However, Emancipation Day, a legal holiday in the District of Columbia, will be observed on April 17, pushing the federal tax return filing deadline to April 18. Under the Internal Revenue Code, legal holidays in Washington, DC, affect the filing deadline across the nation.
The IRS expects that more than 153 million individual tax returns will be filed in 2017. It estimates about four out of five returns will be prepared electronically through tax-preparation software.
Software companies and tax professionals accepting tax returns before Jan. 23 will submit the returns when IRS systems open. The IRS will begin processing paper tax returns on the same schedule.
“For this tax season, it’s more important than ever for taxpayers to plan ahead,” IRS Commissioner John Koskinen said in a written statement. “People should make sure they have their year-end tax statements in hand, and we encourage people to file as they normally would, including those claiming the credits affected by the refund delay. Even with these significant changes, IRS employees and the entire tax community will be working hard to make this a smooth filing season for taxpayers.”
A new law requires the IRS to hold refunds on returns claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until mid-February. This change, required by the Protecting Americans from Tax Hikes Act of 2015, forces the IRS to hold the entire refund, even the portion not associated with the EITC and the ACTC, until at least Feb. 15. This gives the IRS extra time to ensure that taxpayers get the refund they are owed, as well as to help detect and prevent fraud.
The IRS is warning taxpayers that it will take several days for these refunds to be released and processed through financial institutions. When you factor in weekends and the Presidents Day holiday on Feb. 20, affected taxpayers may not have actual access to their refunds until the week of Feb. 27.
Taxpayers should keep copies of their previous tax returns for at least three years, the IRS said. Furthermore, taxpayers who are changing tax software products this filing season will need their adjusted gross income from their 2015 tax return to file electronically. The electronic filing PIN is no longer an option.
Taxpayers can find tips on preparing their 2016 tax return here.
“The opening of filing season reflects months and months of work by IRS employees,” Koskinen said. “This year, we had a number of important legislative changes to program into our systems, including the EITC refund date, as well as dealing with resource limitations. Our systems require extensive programming and testing beforehand to ensure we’re ready to accept and process more than 150 million returns.”
Keep in mind that a filing extension – but not an extension to pay tax – is automatically available to anyone who files Form 1040. This gives you until Monday, Oct. 16, 2017, to complete your 2016 return.
Source: ACCOUNTINGWEB.COM
