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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