IRS won’t accept returns next year without health coverage

The Internal Revenue Service said that for the upcoming 2018 filing season, it‎ will not accept electronically filed tax returns where the taxpayer does not address the health coverage requirements of the Affordable Care Act, the first tax season it has refused to accept such returns.‎

In an update Friday to the web page of its ACA Information Center for Tax Professionals, the IRS said will not accept the electronic tax return until the taxpayer indicates whether they had coverage, had an exemption or will make a shared responsibility payment. On top of that, the IRS said tax returns filed on paper that don’t address the health coverage requirements may be suspended pending the receipt of additional information and any refunds may be delayed.

In previous tax seasons the IRS has held up processing of tax returns that didn’t have the health care coverage box checked, but it didn’t prevent the returns from being processed. During this year’s tax season, President Trump signed an executive order directing agencies not to impose burdens from the Affordable Care Act pending repeal, so the IRS processed the returns, but still required taxpayers to pay a penalty known as an individual shared responsibility payment if they lacked coverage and didn’t receive an exemption.

“To avoid refund and processing delays when filing 2017 tax returns in 2018, taxpayers should indicate whether they and everyone on their return had coverage, qualified for an exemption from the coverage requirement or are making an individual shared responsibility payment,” the IRS advised. “This process reflects the requirements of the ACA and the IRS’s obligation to administer the health care law.”

The announcement comes after unsuccessful efforts this year by the Trump administration and Republicans in Congress to repeal the Affordable Care Act and replace it with a Republican health care plan as an alternative to Obamacare. Last week, President Trump announced he would end cost-sharing reduction payments, subsidies to health insurance companies to help provide coverage to low-income people. He also signed an executive order allowing consumers to buy coverage from so-called “association health plans,” which could be sold across state lines and wouldn’t need to meet the minimum coverage requirements or consumer protections of the Affordable Care Act.

However, with the Affordable Care Act largely still in place, the IRS said taxpayers remain obligated to follow the law and pay what they may owe when filing‎.

“The 2018 filing season will be the first time the IRS will not accept tax returns that omit this information,” said the IRS. “After a review of our process and discussions with the National Taxpayer Advocate, the IRS has determined identifying omissions and requiring taxpayers to provide health coverage information at the point of filing makes it easier for the taxpayer to successfully file a tax return and minimizes related refund delays.”

Source: Accounting Today

Use Free File for Help with Tax Returns

The Internal Revenue Service today reminded the millions of taxpayers who have yet to file their taxes that IRS Free File remains available either online at IRS.gov/FreeFile or through the mobile app, IRS2Go. The IRS2Go app is available for Android and iOS devices.
The IRS Free File service makes brand-name tax software products and electronic filing available to most taxpayers for free. Some products offer both free federal and free state return preparation.
The IRS has developed a series of tips, the Tax Time Guide, to help taxpayers navigate common tax issues as this year’s April 18 deadline approaches. This is the second in a series of 10 tips.
Taxpayers have the option to prepare their return at any time and schedule a tax payment as late as the April 18deadline. Taxpayers who cannot meet the April tax filing deadline can also use IRS Free File to request an automatic six-month extension until Monday, Oct. 16, 2017.
Through a partnership between the IRS and the Free File Alliance, a group of 12 leading tax software companies makes their branded products available for free. Since 2003, more than 49 million people have used IRS Free File, saving $1.4 billion based on a conservative $30 fee estimate.
Anyone who earned $64,000 or less last year qualifies to choose from among 12 software products. Those earning more than $64,000 can use IRS Free File Fillable Forms, the electronic version of IRS paper forms. The Fillable Forms option is best for people who are comfortable preparing their own tax returns.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999.

Tips on Validating Your Identity on Your Tax Return

You should always keep a copy of your tax return. It is even more important for 2017, as the Internal Revenue Service moves to strengthen its e-signature validation process.

You must use your 2015 adjusted gross income or your 2015 self-select PIN to validate your identity on your federal electronic tax return this tax season. The electronic filing PIN is no longer available as an option.

The IRS, state tax agencies and the nation’s tax industry – partners in combating identity theft -ask for your help in their efforts. Working in partnership with you, we can make a difference.

That’s why we launched a public awareness campaign that we call “Taxes. Security. Together.” We’ve also launched a series of security awareness tips that can help protect you from cybercriminals.

As part of the IRS efforts to protect taxpayers, the e-signature validation change mostly affects those taxpayers who have used tax software in the past but are changing software brands in 2017.

Here are a few important steps:

Find a copy of your 2015 tax return; the original return filed with the IRS.
Create a five-digit Self-Select PIN to serve as your electronic signature. It can be any five numbers except all zeros.
If married filing jointly, each taxpayer must create a self-select PIN.
Provide your date of birth when prompted
Provide either your 2015 adjusted gross income or your 2015 self-select PIN as the “shared secret” between you and the IRS. Either number, along with your date of birth, will serve to help validate your identity and verify your e-signature.
On your 2015 tax return, your adjusted gross income (AGI) is on line 37 of the Form 1040; line 21 on the Form 1040-A or line 4 on the Form 1040-EZ.
This change will not affect most taxpayers. For example, if you are a returning customer, your software generally will automatically populate your date of birth and “shared secret” information. Those of you who switched software products generally must enter the “shared secret” information yourself.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

IRS Offers Tips on Filing an Amended Tax Return

You may discover you made a mistake on your tax return. You can file an amended return if you need to fix an error. You can also amend your tax return to claim a tax credit or deduction. Here are 10 tips from the IRS on amending your return:

When to amend. You should amend your tax return if you need to correct filing status, the number of dependents or total income. You should also amend your return to claim tax deductions or tax credits that you did not claim when you filed your original return.

When NOT to amend. In some cases, you don’t need to amend your tax return. The IRS will make corrections, such as math errors, for you. If you didn’t include a required form or schedule, for example, the IRS will mail you a notice about the missing item.

Form 1040X.  Use Form 1040X to amend a federal income tax return that you filed before. You must file it by paper; you cannot file it electronically. Make sure you check the box at the top of the form that shows which year you are amending.

More than one tax year.  If you file an amended return for more than one year, use a separate 1040X for each tax year. Mail them in separate envelopes to the IRS.

Other forms or schedules. If your changes have to do with other tax forms or schedules, make sure you attach them to Form 1040X when you file the form. If you don’t, this will cause a delay in processing.

Amending to claim an additional refund. If you are waiting for a refund from your original tax return, don’t file your amended return until after you receive the refund.

Amending to pay additional tax. If you’re filing an amended tax return because you owe more tax, you should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges.

When to file. To claim a refund file Form 1040X no more than three years from the date you filed your original tax return. You can also file it no more than two years from the date you paid the tax, if that date is later than the three-year rule.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

IRS Offers Tips on Filing an Amended Tax Return

You may discover you made a mistake on your tax return. You can file an amended return if you need to fix an error. You can also amend your tax return to claim a tax credit or deduction. Here are 10 tips from the IRS on amending your return:

When to amend. You should amend your tax return if you need to correct filing status, the number of dependents or total income. You should also amend your return to claim tax deductions or tax credits that you did not claim when you filed your original return.

When NOT to amend. In some cases, you don’t need to amend your tax return. The IRS will make corrections, such as math errors, for you. If you didn’t include a required form or schedule, for example, the IRS will mail you a notice about the missing item.

Form 1040X.  Use Form 1040X to amend a federal income tax return that you filed before. You must file it by paper; you cannot file it electronically. Make sure you check the box at the top of the form that shows which year you are amending.

More than one tax year.  If you file an amended return for more than one year, use a separate 1040X for each tax year. Mail them in separate envelopes to the IRS.

Other forms or schedules. If your changes have to do with other tax forms or schedules, make sure you attach them to Form 1040X when you file the form. If you don’t, this will cause a delay in processing.

Amending to claim an additional refund. If you are waiting for a refund from your original tax return, don’t file your amended return until after you receive the refund.

Amending to pay additional tax. If you’re filing an amended tax return because you owe more tax, you should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges.

When to file. To claim a refund file Form 1040X no more than three years from the date you filed your original tax return. You can also file it no more than two years from the date you paid the tax, if that date is later than the three-year rule.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Did you file late? Here are some things you should know.

April 18 was this year’s deadline for most people to file their federal tax return and pay any tax they owe. If you are due a refund there is no penalty if you file a late tax return. If you owe tax, and you failed to file and pay on time, you will most likely owe interest and penalties on the tax you pay late. To keep interest and penalties to a minimum, you should file your tax return and pay the tax as soon as possible.
Here are some facts that you should know.

1. Two penalties may apply.
2. Penalty for late filing.
3. Penalty for late payment.
4. Combined penalty per month.
5. File even if you can’t pay.
6. Payment Options.
7. Late payment penalty may not apply.

For more details contact Neikirk, Mahoney & Smith at 502-896-2999.

Do you need an amendment made to your 2015 tax return?

After filing your return, you may realize you made an error or omitted something from your return. The IRS often finds and corrects errors during the processing of returns. However, there are certain situations in which you may need to file an amended return if you wish to correct an error or make other changes to your return. Need more information on amending your return call Neikirk, Mahoney & Smith at 502-896-2999.