2017 Tax Filing Season Begins Jan. 23 for Nation’s Taxpayers, Tax Returns due April 18

The nation’s tax season will begin Monday, Jan. 23, 2017 and reminded taxpayers claiming certain tax credits to expect a longer wait for refunds.

The IRS will begin accepting electronic tax returns that day, with more than 153 million individual tax returns expected to be filed in 2017. 

Many software companies and tax professionals will be accepting tax returns before Jan. 23 and then will submit the returns when IRS systems open. The IRS will begin processing paper tax returns at the same time. There is no advantage to filing tax returns on paper in early January instead of waiting for the IRS to begin accepting e-filed returns.

The IRS reminds taxpayers that a new law requires the IRS to hold refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until Feb. 15. In addition, the IRS wants taxpayers to be aware it will take several days for these refunds to be released and processed through financial institutions. Factoring in weekends and the President’s Day holiday, the IRS cautions that many affected taxpayers may not have actual access to their refunds until the week of Feb. 27.

The IRS also reminds taxpayers that they should keep copies of their prior-year tax returns for at least three years. Taxpayers who are changing tax software products this filing season will need their adjusted gross income from their 2015 tax return in order to file electronically. The Electronic Filing Pin is no longer an option.

April 18 Filing Deadline

The filing deadline to submit 2016 tax returns is Tuesday, April 18, 2017, rather than the traditional April 15 date. In 2017, April 15 falls on a Saturday, and this would usually 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 that Monday, which pushes the nation’s filing deadline to Tuesday, April 18, 2017. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

Refunds in 2017

Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund.

The IRS still anticipates issuing more than nine out of 10 refunds in less than 21 days, but there are some important factors to keep in mind for taxpayers.

Beginning in 2017, a new law requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit or the Additional Child Tax Credit until mid-February. Under the change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act, the IRS must hold the entire refund — even the portion not associated with the EITC and ACTC — until at least Feb. 15. This change helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent fraud.

As in past years, the IRS will begin accepting and processing tax returns once the filing season begins. All taxpayers should file as usual, and tax return preparers should also submit returns as they normally do – including returns claiming EITC and ACTC.

The IRS will begin releasing EITC and ACTC refunds starting Feb. 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or on debit cards until the week of Feb. 27 (assuming there are no processing issues with the tax return and the taxpayer chose direct deposit). This additional period is due to several factors, including banking and financial systems needing time to process deposits.

After refunds leave the IRS, it takes additional time for them to be processed and for financial institutions to accept and deposit the refunds to bank accounts and products. The IRS reminds taxpayers many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the three-day holiday weekend involving President’s Day may affect their refund timing.

Source: Internal Revenue Service

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Take steps now to make filing your tax return easier next year

Begin taking steps now to ensure smooth processing of your 2016 federal tax return next year.

Be sure to make a copy of your 2015 tax return and keep it and all supporting documents for a minimum of three years. Doing so will make it easier to fill out a return next year. In addition, you may need the adjusted gross income amount from your 2015 return to properly e-file your 2016 return.

Check your withholding. This is especially important if you received a large refund or owed a larger than expected amount of tax this year. You can reduce a large refund amount and boost your take-home pay now by claiming additional withholding allowances on the Form W-4 and give it to your employer. If you owed tax, you can have additional tax withheld or make quarterly estimated tax payments to the IRS. 

You should not count on getting a refund by a certain date next year, especially when making major purchases or paying other financial obligations. Though the IRS issues most refunds in less than 21 days, some returns are held for further review. In addition, starting next year, some people will get their refunds a little later. A recent tax law requires the IRS to hold the refund for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until February 15. By law, the IRS must hold the entire refund, not just the portion related to the EITC or ACTC. 

You may need to renew your ITIN. All ITINs were not used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return as of Jan. 1, 2017. Additionally, all ITINs issued before 2013 will begin expiring this year, starting with those with middle digits of 78 and 79 (Example: (9XX-78-XXXX). All expired ITINs must be renewed before being used on a U.S. tax return. No action is needed by ITIN holders who don’t need to file a tax return next year. Also, there are new documentation requirements when applying for or renewing an ITIN for certain dependents. 

The recent tax law change also includes a new requirement for employers. They must now file their copies of Forms W-2 and certain Forms 1099 with the federal government by January 31. The January 31 deadline has long applied to employers furnishing copies of these forms to their employees.

 Source: Internal Revenue Service

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Package Pricing - Take Advantage Now

Take advantage now for the next tax season, check our package pricing HERE

 

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Using QuickBooks - Price Levels

Price levels allows you set custom pricing for different customers or jobs. When you define price levels and assign them to customers, QuickBooks takes care of adjusting the prices on every invoice you create. You can also apply a price level to specific lines on invoices to mark up or discount individual items. 

Fixed percentage price levels allows you increase or decrease prices of all items for a specific customer or job by a fixed percentage. If you have a fixed set of discounts, you might name the various levels by the percentage, like Discount 20 for example. An alternative is to name them by their purpose, like NewCustomer. That way, it's easy to change the discount amount without changing the price level's name.

To create a price level, make sure the price level preference is turned on. If QuickBooks' Price Level preference is turned off, you won't see the Price  Level Item in the List menu. Check it at Edit - Preferences - Sales & Customers, and then click the Company Preferences tab. Select the Enable Price Levels radio button, and then click OK.

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