The Internal Revenue Service (IRS) has announced changes as the individual income tax filing season opens Monday, January 23.
Due to a new change in tax law, the IRS cannot issue refunds before Wednesday, February 15, for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit.
This applies to the entire refund, even the portion not associated with these credits, according to the IRS.
Although tax refunds containing the credits will be released beginning February 15, the IRS is cautioning taxpayers that these refunds are unlikely to arrive in bank accounts or on debit cards until the week of Monday, February 27.
“For this tax season, it’s more important than ever for taxpayers to plan ahead,” IRS Commissioner John Koskinen said.
“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.”
Filers are reminded that they do not need to wait until February 15 to file a tax return. While the IRS must hold the refund until that date, it will begin taking the steps it normally does to process tax returns at the opening of the filing season.
Those filing returns can check “Where’s My Refund?” online at www.irs.gov for their personalized refund status after February 15.
The changes are driven by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). The goal is to prevent revenue lost due to identity theft and refund fraud related to fabricated wages and withholdings.
The IRS says that it still expects to issue most refunds in less than 21 days even though some refunds will be held until February 15.
This year’s tax deadline will also fall on a new date. Taxes are usually due April 15, but that falls on a Saturday this year and is followed by Emancipation Day in Washington, D.C., on Monday, April 17.
Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.
For these reasons, the tax deadline will be Tuesday, April 18.
Some individual tax filers who are obligated to file taxes but ineligible for a Social Security number will also see changes this year.
Such taxpayers with an individual taxpayer identification number (ITIN) with middle digits of 78 or 79 or those with numbers that have not been used on a tax return at least once in the past three years, must renew their numbers or they could experience delays.
Those filing taxes are also reminded that tax season is a busy time for identity thieves.
Tax identity theft occurs when someone uses your Social Security number to get a tax re-fund or even a job.
According to the Federal Trade Commission (FTC), tax identity thieves get your personal information in a number of ways, including: going through your trash or mailbox; through emails asking for information, which appear to come from the IRS; employees at hospitals, nursing homes, banks and other businesses stealing data; and phony or dishonest tax preparers misusing confidential information or passing it along to identity thieves.
To lessen the chances of becoming a victim of tax identity theft, the FTC has the following advice, whether you choose to file your return yourself or use a tax preparer:
File your tax return early. And do it before identity thieves have a chance to steal your information. Also, make sure your address is up-to-date so your W-2 doesn’t get lost in the mail or end up in the wrong hands.
Use a secure internet connection. If you file your return electronically, don’t use unsecure, publicly available Wi-Fi hot spots.
Shred documents. This includes copies of your tax return, drafts or calculation sheets you no longer need. The IRS recommends that most people keep three years’ worth of tax returns in case of an audit. Keep hard copies and electronic files in a secure location.
Check your credit report. To ensure your identity hasn’t been stolen or compromised, go to annualcreditreport.com to get your free credit report.
For more information about this year’s tax season, visit www.irs.gov.
Source: HILLSBORO REPORTER