Best Reasons to E-File Taxes in 2016

Six Reasons to E-file your Taxes in 2016

Are you one of the few tax filers who still file a paper return? If so, now may be the best time to switch to e-file. Last year almost 129 million taxpayers filed their taxes electronically. They chose to e-file because it’s the fastest and safest way to file.

 

Here are the top six reasons why you should file electronically in 2016:

  1. Accurate and Easy. IRS e-file is the best way to file an accurate tax return. The tax software helps you avoid mistakes by doing the math for you. It guides you through each section of your tax return. It is much easier than doing your taxes by hand and mailing paper tax forms.
  2. Safe and Secure. IRS e-file meets strict security guidelines. It uses modern encryption technology to protect tax returns. The IRS has processed more than 1.5 billion e-filed tax returns to date. This year, the IRS is working with states and tax industry leaders to protect your tax return from identity theft refund fraud. This new effort has put strong new safeguards in place to make tax filing safer than ever before.
  3. Convenient and Often Free. You can e-file for free through IRS Free File. Free File is only available on IRS.gov. You may qualify to have your taxes e-filed for free through IRS volunteer programs. Volunteer Income Tax Assistance, or VITA, offers free tax preparation if you earned $54,000 or less. Tax Counseling for the Elderly, or TCE, generally helps people who are age 60 or older. You can buy commercial tax software to e-file or ask your tax preparer to e-file your tax return. Most paid preparers are required to file their clients’ returns electronically.

 

Get Your Tax Refund Quicker

  1. Faster Refunds. In most cases, e-file helps get your refund faster. That’s because there is nothing to mail and your tax return is virtually mistake-free. The fastest way to get your refund is to combine e-file with direct deposit into your bank account. The IRS issues more than nine out of 10 refunds in less than 21 days.
  2. Health Care Tax Reporting. IRS e-file can help with tax provisions of the health care law. The software will walk you through the lines on the tax forms that relate to the Affordable Care Act.
  3. Payment Options. If you owe taxes, you can e-file early and set up an automatic payment on any day until the April 18 deadline. You can pay electronically from your bank account with IRS Direct Pay. You also have many other options to pay, including electronic funds withdrawal or payment by debit or credit card. Visit IRS.gov/payments for details.

 

Taxpayer Rights in Front of IRS

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

 

Save Money: Use IRS Free File to File Tax in 2016

Millions of Americans have safely filed their taxes and saved money using IRS Free File, and you can, too. You can use name-brand software or fillable forms to prepare and electronically file your federal tax return – for free. Combined with direct deposit, choosing e-file is the quickest way to get your refund.

 

Here are some tips about IRS Free File:

  1. Get Started at the IRS Website. The only way to use IRS Free File is through the IRS website. Once you choose a Free File company, you’ll click on a link to their website to prepare and e-file your federal tax return.
  2. Find Tax Breaks. The question and answer format of tax software will help you find tax breaks. This could include tax credits, such as the Earned Income Tax Credit. The software selects the appropriate tax forms and does the calculations for you. Free File can help with the health care law tax provisions as well.
  3. Free for All. If you made $62,000 or less you can use brand-name software. If you earned more, you can use Free File Fillable Forms. This option allows you to complete IRS forms electronically. It is best for people who are used to doing their own taxes.
  4. Easy Online Extensions. If you can’t finish your tax return by the April 18 deadline, it’s easy to use Free File to ask for a six-month extension. An extension of time to file is not an extension of time to pay. If you owe federal taxes, you need to estimate the amount and pay it with your request to avoid penalties and interest.

 

IRS Free File Alliance

The IRS partners with leading tax software companies, the Free File Alliance, to make this service available. Some companies offer free state tax return preparation as well. Choose your option.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

 

Electronic Postmark for Sending IRS Tax Return

A Transmitter may provide an electronic postmark to taxpayers that file Individual Income Tax Returns and Extensions of Time to File Individual Income Tax Returns, through an ERO or through Online Filing. The Transmitter creates the electronic postmark bearing the date and time (in the Transmitter’s time zone) that the return is received at the Transmitter’s host computer.

What is an IRS Electronic Postmark?

The taxpayer must adjust the electronic postmark to the time zone where the taxpayer resides to determine the postmark’s actual time. For example, if the Transmitter provides an electronic postmark with a time in the Pacific Time Zone but the taxpayer resides in the Eastern Time Zone, the taxpayer must add three hours to the postmark time to determine the actual postmark time (Eastern Time Zone).

 

Electronic postmark is on or before the prescribed deadline for filing

If the electronic postmark is on or before the prescribed deadline for filing, but the IRS receives the return after the prescribed deadline for filing, the IRS treats the return as timely filed. In order for the IRS to treat a return as timely filed, based on the electronic postmark’s date, the taxpayer must meet all requirements for signing the return and when applicable, mailing Form 8453 with supporting documents not included in the electronic record. If the electronic postmark is after the prescribed deadline for filing, the IRS actual receipt date, not the date of the electronic postmark, is the filing date. If the IRS rejects a return, the taxpayer must file a corrected return in accordance with the rules for timely filing corrected returns after rejection of an electronic return.

 

The IRS authorizes a Transmitter to provide an electronic postmark if the Transmitter:

  • Creates an electronic postmark bearing the date and time (in the Transmitter’s time zone) the return was received by the Transmitter’s host system;
  • Provides the electronic postmark to the taxpayer or the ERO no later than when the acknowledgment is made available to the taxpayer in a format that precludes alteration and manipulation of the electronic postmark information;
  • Provides the same electronic postmark data to the IRS in the electronic record of the return;
  • Provides taxpayers with an explanation of the electronic postmark and when the IRS treats the electronic postmark as the filing date;
  • Refrains from using terms that currently have specific meaning in the postal industry such as “certified” or “registered” and similar terms, and from using “Internal Revenue Service”, “IRS” or “Federal” as a definer of the electronic postmark when discussing the electronic postmark , including in all advertising, product packaging, articles, press releases and other presentations;
  • Retains a record of each electronic postmark until the end of the calendar year and provides the record to the IRS upon request;
  • Transmits all tax returns and extensions of time to file that received an electronic postmark to the IRS within two days of receipt from the ERO or from the taxpayer in the case of Online Filing; and

Keeping Electronic Tax Documents

Retains the original electronic postmark of the rejected return for a corrected return that the Transmitter received through the last date for retransmitting rejected returns and creates a new postmark for all returns, including corrected returns received after the last date for retransmitting returns. All corrected returns retaining an electronic postmark of a date through the prescribed last day of filing must be transmitted to the IRS within two days of the date the return was received by the Transmitter or the twenty second day of the respective month of the prescribed due date, whichever is earlier.

EFINs, ETINs and Password

Providers must protect their EFINs, ETINs and passwords from unauthorized use. Providers must never share the numbers and passwords with others including not transferring EFINs or ETINs to another entity when transferring the business by sale, gift or other disposition. If the IRS learns of a compromised EFIN or ETIN, we will change the number and notify the Provider by mail.

 

Requesting New ETIN

The IRS mails a security letter to Transmitters, Software Developers and Online Providers containing a replacement password when necessary. The last two digits of the corresponding Electronic Transmitter Identification Number (ETIN) are in the letterhead.

 

Getting ETIN to File Taxes

All Providers must include their identification numbers with the electronic return data of all returns it transmits to the IRS. If more than one Authorized IRS e-file Provider is involved in the origination and transmission of the return data, applicable electronic filing identification numbers (EFIN and ETIN) for each Provider must be included in the electronic return record. Online Providers must include an EFIN with a Prefix Code of 10, 21, 32, 44 or 53 with each Online Return.

 

Authorized IRS e-file Providers (Providers)

Authorized IRS e-file Providers (Providers) may use only other Authorized IRS e-file Providers to perform IRS e-file activities, including but not limited to origination and transmission of electronic submission. For example, Transmitters must ensure they are transmitting only for Providers. Providers should request other Providers provide information to ascertain that they are Authorized IRS e-file Providers. Care is necessary to safeguard IRS e-file.

 

Using Third Parties for IRS e-file Related Activities

Authorized IRS e-file Providers may associate with third parties that are not Authorized IRS e-fileProviders for related activities only if the third party agrees to adhere to all applicable requirements for participation in IRS e-file. The IRS may require the Provider to discontinue their association with third parties that are not adhering to IRS e-file requirements. The IRS may also sanction a Provider that knowingly and either directly or indirectly associates with a third party that is not adhering to applicable IRS e-file requirements.

 

Applicants and Authorized IRS e-file Providers (Providers)

Applicants and Authorized IRS e-file Providers (Providers) must either submit a new application or reapply for any of the reasons below. Principals and Responsible Officials may have to provide fingerprints or professional status information.

  • They never participated in IRS e-file
  • They were previously denied participation in IRS e-file
  • They were previously suspended from IRS e-file
  • They have not submitted any e-file returns for more than two years
  • The structure of the business has changed, requiring use of a new or different Taxpayer Identification Number (TIN)

 

Changes to Your IRS e-file Application

Authorized IRS e-file Providers (Providers) should ensure that the IRS has current information by reviewing and updating their IRS e-file Applications. Providers may review their IRS e-fileApplication information electronically via e-services. A Principal, Responsible Official or a Delegated User authorized to revise an IRS e-file Application may submit all revisions.

 

Updating E-File Application

Providers must submit updates within thirty days of a change of any information. It is important to provide updates such as, changes to business structure, Principals, Responsible Officials, addresses and telephone numbers and to remove individuals no longer associated with the firm, including deceased individuals. The IRS needs current information to be able to contact Providers and obtain or provide important information.

 

When to update e-file application

If a Principal or Responsible Official loses their professional status, the firm must update its e-file application and provide the required fingerprints of the individual.

The IRS removes deceased individuals including Principals, Responsible Officials, and Delegated Users from the e-file application if the Provider does not remove the individual within 30 days of the date of death. The IRS also removes Providers from participation in IRS e-file when it receives undeliverable mail or is unable to contact a Provider. Until the Provider updates the information, the IRS rejects all returns submitted by the Provider.

 

Changing E-File Address

NOTE:  Changes submitted on an IRS e-file Application do not change the address of record for a business’ tax records, just as a change to tax records does not automatically update information on a Provider’s IRS e-file Application.

IRS Ready to Start 2016 Tax Season; Encourages use of IRS.gov and e-File

More than four out of five returns are expected to be filed electronically, with  a similar proportion of refunds issued through direct deposit. 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 anticipates issuing more than nine out of 10 refunds in less than 21 days.

 

2016 IRS Free File Program

The IRS Free File program, available at IRS.gov, opens Friday, Jan. 15, and the IRS will begin accepting and processing all tax returns on Tuesday, Jan. 19. Commercial partners of the IRS offer free brand-name software to about 100 million individuals and families with incomes of $62,000 or less. Seventy percent of the nation’s taxpayers are eligible for IRS Free File.

All taxpayers regardless of income will again have access to free online fillable forms, which provide electronic versions of IRS paper forms to complete and file. This option, available through IRS.gov, is free.

The IRS also reminded people to plan ahead, especially students and home buyers who request a copy of a tax transcript or tax return information for a specific year using the online Get Transcript tool. They should allow five to 10 days from the time they make the request to receive it by mail.

 

Protecting Taxpayers from ID-Theft-Related Refund Fraud

The IRS is working diligently with state tax authorities and the tax industry to address tax-related identity theft and refund fraud.  As part of the Security Summit effort, stronger protections for taxpayers and the nation’s tax system have gone into effect for the 2016 tax filing season.

The new measures attack tax-related identity theft from multiple sides. Many changes will be invisible to taxpayers but help the IRS, states and the tax industry provide new protections. There will be new security requirements when you’re preparing your taxes online, especially when you sign in to your tax software account, to better protect your tax software account and personal information.

 

How to Avoid Tax Related Identity Theft

Despite these security improvements to fight identity theft issues, the IRS will still process nine out of 10 federal refunds within 21 days. States have their own refund processing timeframes that may vary, and some states may make additional reviews to ensure refunds are being issued properly.

 

Health Care Basics and ACA Tax

Similar to last year, meeting the tax obligation of the Affordable Care Act for the vast majority of taxpayers will simply mean checking a box to verify everyone on their return has health coverage. For others, IRS.gov/aca features useful information, tips and interactive online tools to help taxpayers with the premium tax credit, the individual shared responsibility requirement, and other tax features of the ACA.

The Affordable Care Act requires that a taxpayer and each member of their family either hasqualifying health coverage for each month of the year, qualifies for an exemption, or makes anindividual shared responsibility payment when filing their tax returns.

 

Here are some important ACA tax reminders:

  • Check the box: Like last year, the vast majority of taxpayers will simply check a box on their tax return to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required to report coverage.
  • Claim a Coverage Exemption if you qualify:  If you or anyone on your return did not have coverage for the entire year, you should determine if you qualify for one of the many coverage exemptions that are available.  You can use our online interactive tool  to help determine if you qualify.
  • File to reconcile Advance Payments of the Premium Tax Credit:  If you enrolled in coverage through the Health Insurance Marketplace during 2015, you most likely received the benefit of advance payments of the premium tax credit.  You must file a tax return and submit Form 8962 to reconcile these payments with the actual premium tax credit to which you are entitled.  You will need Form 1095-A from the Marketplace to complete Form 8962. Failure to reconcile your advance payments of the premium tax credit on Form 8962 may make you ineligible to receive future advance payments.
  • Don’t wait for 1095-B/C:  Many taxpayers will receive a Form 1095-B or 1095-C with information about their health care coverage.  You may have heard that the IRS has extended the time for health coverage providers and employers to furnish these forms.  You should be aware that you don’t have to wait for these forms in order to file your tax return and you don’t have to send these forms to the IRS.  You can rely on other information to determine your health coverage. The IRS has additional information about these forms in questions and answers on IRS.gov/aca.
  • Wait for Form 1095-A:  If you enrolled in coverage through the Marketplace you should receive Form 1095-A from the Marketplace with important information that you need to accurately file your tax return.  Unlike the Forms 1095-B and 1095-C, you should wait to file your tax return until you receive your Form 1095-A. Contact your marketplace with questions about your Form 1095-A.

 

VITA and ACA Tax Requirements

Low-and moderate-income taxpayers can get help meeting this health-care requirement and filing their return for free by visiting one of the more than 12,000 community-based tax help sites staffed by more than 90,000 volunteers that participate in the Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA/TCE) programs. To find the nearest site, use the VITA/TCE Site Locator on IRS.gov.
myRA

 

What is a myRA?

In November, the Treasury Department launched myRA, a new, simple way to open a starter retirement account. myRA has no fees, and participants can fund their myRA accounts through a:

  • Payroll deduction. Set up automatic direct deposit contributions to myRA through an employer.
  • Checking or savings account. Savers can also fund a myRA account directly by setting up recurring or one-time contributions from a checking or savings account.
  • Federal tax refund. At tax time, you may direct all or a portion of a federal tax refund to your myRA account.

For more information about myRA or to sign up for an account, visit www.myRA.gov.

 

Assistance Filing the Tax Return

Well over 90 percent of all tax returns are prepared using tax return preparation software. This software generally includes tax law help along with reminders and prompts about tax breaks and responsibilities. The IRS also reminds taxpayers that a trusted tax professional can also provide helpful information about the tax law. A number of tips about selecting a preparer and national tax professional groups are available on IRS.gov.

The IRS urges all taxpayers to make sure they have all their year-end statements in hand before they file their return. This includes Forms W-2 from employers, Forms 1099 from banks and other payers, and for those claiming the premium tax credit, Form 1095-A from the Marketplace. Doing so will help avoid refund delays and the need to file an amended return later.

Free Tax Filing Software AGI Under 62k

The IRS’s Free File program allows those with adjusted gross incomes under $62k to use the Free File software for their federal taxes for no charge in a partnership with the Free File Alliance. Many states also partner with the FFA to offer free state tax returns to those that qualify, and some states offer free e-filing for all taxpayers.

 

When does the IRS process tax returns?

Tax return processing will begin January 19, 2016. For 2016, there are 13 brand-name tax software providers making their federal tax return products available for free. Taxpayers whose adjusted gross income was $62,000 or less during 2015 are eligible for at least one, if not more, of the 13 tax software products. The income limitation is $2,000 higher than last year. People can use Free File software immediately but e-filed returns will not be transmitted to the IRS until Tuesday, Jan. 19, when the filing season officially begins

(Note: Every taxpayer regardless of income can file for free if you want to fill out the tax forms by hand. The free service being provided here is the software back end that does the calculations for you. Tax returns prepared electronically are generally more accurate than those filled out by hand, reducing processing time and the potential for penalties that result from errors in your filing.)

E-File Forms Speed Tax Returns

For taxpayers who earned more than $62,000, there’s Free File Fillable Forms, the electronic version of IRS paper forms.  Free File Fillable Forms will be available on Jan. 19 2016. Free File is available only at IRS.gov/FreeFile. Since 2003, more than 46 million people have used Free File, saving nearly $1.4 billion based on a conservative $30-fee estimate.

 

What can you do in January to prepare for tax season?

  • Finish up any IRA contributions for 2015 (you have until April 15, 2016 to make 2015 IRA contributions).
  • Look up the schedules your various financial institutions are planning on issuing your documentation (1099s, etc) so you can watch for them. Ask your employer when you will receive your W-2.
  • If you are considering professional tax preparation and haven’t done so before (or are switching preparers), now is the time to be asking around to find a tax preparer. If you have an established relationship, it’s always nice to reach out to say you will/will not be going with the same person again.
  • I’m sure you’ll have ideas as well, leave them in the comments.

Remember, the fastest way to get your refund is through e-file and direct deposit. Direct deposit is fast, safe and easy. Just have your routing number and account number handy. Nine out of 10 taxpayers will receive their refunds within 21 days.

 

Free State Tax Filing Links

For 2016, more Free File software providers are offering both free federal and free state tax return preparation for states with income tax requirements. Some providers also are offering state tax return preparation for a fee. State tax return offers are at the discretion of the providers.

 

Links to state tax portals are below with Free File of State Tax

Alabama – Free e-filing: http://revenue.alabama.gov/eservices/mat-signup-help.cfm

Alaska – No state income tax.

Arizona – Partners with several major tax software providers: http://www.azdor.gov/EServices/Individuals.aspx

Arkansas – Partners with several major tax software providers:http://www.dfa.arkansas.gov/offices/incomeTax/eFile/Pages/freeFileProgram.aspx

California – Free filing through CalFile: https://www.ftb.ca.gov/online/calfile/index.asp?WT.mc_id=EfileOptions_Feature_CalFile_Start

Colorado – Free filing through Revenue Online: https://www.colorado.gov/revenueonline/_/

Connecticut – Free e-filing through the Taxpayer Services Center:https://drsindtax.ct.gov/AUT/welcomeindividual.aspx

Delaware – Online filing: http://www.revenue.delaware.gov/pit_onlinefiling.shtml

District of Columbia – Free e-filing through the Taxpayer Services Center:https://www.taxpayerservicecenter.com/individual/Ind_Logon.jsp?type=100

Florida – No state income tax.

Georgia – Partners with several major tax software providers: http://dor.georgia.gov/free-file-alliance

Hawaii – Free e-filing (fee to make a payment): http://tax.hawaii.gov/eservices/efile/

Idaho – Free e-filing for qualifying taxpayers: http://tax.idaho.gov/i-1020.cfm

Illinois – Free e-filing: http://www.revenue.state.il.us/MyTax/IL-1040.htm

Indiana – Free e-filing for qualifying taxpayers: http://www.in.gov/dor/4740.htm

Iowa – Free e-filing for qualifying taxpayers: https://tax.iowa.gov/individual-income-tax-electronic-filing-options

Kansas – Free e-filing: http://www.ksrevenue.org/iiwebfile.html

Kentucky – E-filing: http://revenue.ky.gov/etax.htm

Louisiana – Free e-filing: http://revenue.louisiana.gov/EServices/LouisianaFileOnline

Maine – Free iFile: http://www.maine.gov/revenue/netfile/IFileDesc.htm

Maryland – Free iFile: https://interactive.marylandtaxes.com/Individuals/iFile_ChooseForm/default.asp

Massachusetts – WebFile: https://wfb.dor.state.ma.us/webfile/wsi/

Michigan – Free e-filing for qualifying taxpayers: http://www.michigan.gov/taxes/0,4676,7-238-44070_46640-288774–,00.html

Minnesota – Free e-filing for qualifying taxpayers:http://www.revenue.state.mn.us/individuals/individ_income/Pages/Online_Filing_Software.aspx

Mississippi – Partners with several major tax software providers:http://www.dor.ms.gov/taxareas/individ/efiling/developers.html

Missouri – Partners with several major tax software providers: http://dor.mo.gov/personal/electronic.php

Montana – e-filing through the Taxpayer Access Point: https://tap.dor.mt.gov/_/#2

Nebraska – Free NebFile: http://www.revenue.nebraska.gov/electron/ind_e-file.html

Nevada – No state income tax.

New Hampshire – No state income tax.

New Jersey – Free NJWebFile: http://www.state.nj.us/treasury/taxation/pcfile/njwebfile.shtml

New Mexico – e-filing through the Taxpayer Access Point: https://tap.state.nm.us/tap/_/

New York – Free e-filing for qualifying taxpayers: http://www.tax.ny.gov/pit/efile/default.htm

North Carolina – Free e-filing for qualifying taxpayers: http://www.dornc.com/electronic/e-file.html

North Dakota – Free e-filing for qualifying taxpayers: http://www.nd.gov/tax/indincome/elecfiling/

Ohio – Free e-filing: http://www.tax.ohio.gov/ohio_individual/individual/filefaster.aspx

Oklahoma – Free e-filing for qualifying taxpayers: https://www.ok.gov/tax/Individuals/Income_Tax/E-File_Options/Free_File/

Oregon – Free e-filing for qualifying taxpayers: http://www.oregon.gov/DOR/programs/individuals/Pages/individuals-e-filing.aspx

Pennsylvania – Free e-filing for qualifying taxpayers: http://www.revenue.pa.gov/OnlineServices/PersonalIncomeTaxe-Services/Pages/File-My-Taxes-(PA-e-File).aspx#.VHSUtVXF_Iw

Rhode Island – Partners with several major tax software providers: http://www.tax.ri.gov/misc/efile.php

South Carolina – Partners with several major tax software providers:http://www.sctax.org/Electronic+Services/FastFile/default.htm

South Dakota – No state income tax.

Tennessee – No state income tax.

Texas – No state income tax.

Utah – e-filing through the Taxpayer Access Point: https://tap.tax.utah.gov/TaxExpress/_/

Vermont – Partners with several major tax software providers: http://www.state.vt.us/tax/eservices.shtml

Virginia – Partners with several major tax software providers: http://www.tax.virginia.gov/site.cfm?alias=freefile

Washington – No state income tax.

West Virginia – Partners with several major tax software providers:http://tax.wv.gov/Individuals/ElectronicFiling/Pages/FreeFileOptions.aspx

Wisconsin – e-filing through WI efile: https://www.revenue.wi.gov/wi_efile/

Wyoming – No state income tax.

 

IRA VITA Tax Filing Locations

Additionally, there are programs to have your taxes prepared by someone else for free. I “worked” for Volunteer Income Tax Assistance (VITA) in college. The IRS says you qualify if your income is under $54k, but in my own experience, as long as your return is simple, the dollar amounts don’t really matter. But the guy in charge of our site was pretty lenient.

They have locations listed on the IRS website.

https://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers

Free File also can help taxpayers with the new health care requirements. Just as last filing season, almost everyone will need to do something when filing a tax return this year. For each month in 2015, taxpayers and everyone on their return must:

  • Report health care coverage, or
  • Claim an exemption from coverage or
  • Make a shared responsibility payment with their tax return.

IRS Starts Accepted 2015 Tax Returns on January 19, 2016

After the review of the legislation of tax extensions that were signed into law last week, service of internal taxes (IRS) today announced that national tax season will begin Tuesday, January 19, 2016, as it was planned.

When does the IRS Start Accepting 2015 Tax Returns?

The IRS will begin accepting individual electronic statements that day. The IRS expects to receive more than 150 million individual returns in 2016, with more than four in five of them being prepared and filed electronically using tax preparation program. The IRS will begin processing tax returns printed at the same time. People do not get any advantage to file tax returns on paper in early January rather than wait to be given home to electronic filing or e – file.

2016 IRS Tax Season

“We hope to open the 2016 tax season on time,” said the Commissioner of the IRS, John Koskinen. “Our employees have worked hard this year to make this happen. We also appreciate the help of the nation tax professionals and the software community, as they are essential providing assistance to taxpayers during tax season”.
As part of the initiative of the Security Summit, the IRS has been working closely with the industry tax and state tax agencies to provide taxpayers greater protection against identity theft during the upcoming tax season.

When is the Tax Filing Deadline?

The deadline for filing taxes for the year 2015 is the Monday, April 18, 2016, rather than the traditional date of April 15. Washington, D.C., will celebrate the day of emancipation that Friday, which pushed the date limit for Monday 18 for most in the nation. (Due the day of the Patriots, in Maine and Massachusetts the those States will be on Tuesday, April 19).

When do you file taxes in 2016?

Koskinen noted that new legislation makes many provisions permanent and extend others for several years. “This provides security to plan, which will help taxpayers and the tax community as well as the IRS,” he said.

What to do in order to file taxes?

The IRS urges all taxpayers to make sure that they have all their statements to the end of the year to hand before submitting their tax return, including W-2 forms from their employers, the forms 1099 of the banks and other institutions and 1095-A form of the market for those claiming the tax credit of premium. “We encourage taxpayers to that take advantage of the growing range of tools and information on IRS.gov to make tax preparation easier,” said Koskinen.
Although the IRS starts accepting statements of January 19, many companies tax programming will begin to prepare tax returns in January to be then presented to the IRS when processing systems are open.
Choose the e-file or e – file and direct deposit for refunds is still way faster and more secure file an accurate tax return and receive a refund. The IRS anticipates issuing more than nine of every 10 refunds in less than 21 days. See free options to get help with taxes and to prepare and file your return at IRS.gov or in your community if you qualify. Visit IRS.gov and click on the presentation or “Filing” section to view your options.

What is IRS FreeFile?

Seventy percent of taxpayers of the nation are eligible for Free File of the IRS. IRS business partners offer free software brand at about 100 million individuals and families with incomes of $62,000 or less;

How do you file taxes for free?

Online fillable forms offer electronic versions of the IRS paper forms to all taxpayers, regardless of their income, which can be prepared and submitted by people who feel comfortable filling your own tax return

Assistance volunteer tax preparation (VITA)

Assistance volunteer tax preparation (VITA) and the tax counseling for seniors elderly (TCE), offer help of free tax for people who qualify. Visit IRS.gov and enter “free tax assistance” in the search box to learn more and find a site VITA or TCE, or download the IRS2Go app on your Smartphone and find a free tax preparation provider.
The IRS also reminds taxpayers that a trust tax professional can provide useful information and advice about the tax code, which changes frequently. Tips are available at IRS.gov to choose a preparer and details of national groups of tax professionals.

Using Electronic Federal Tax Payment System EFTPS

How do you use Electronic Federal Tax Payment System EFTPS to pay taxes and estimated taxes?

Now let’s talk about how to pay your Federal taxes.IRS direct pay is a new secure service to pay an individual tax bill or estimated tax payments directly from your checking or savings account at no cost to you. You’ll receive instant confirmation that your payment has been submitted. Your bank account information is not retained in IRS systems after payments are made. Also, if you have already made a payment through direct pay, you can use the Look Up a Payment feature to view your payment details and status. There you can modify or cancel your payment until two business days before your payment date.

 

Pay your Federal taxes using the Electronic Federal Tax Payment System (EFTPS)

You can also pay your Federal taxes using the Electronic Federal Tax Payment System. It’s a payment system provided free by the U.S. Department of Treasury. By using this system, you can pay Federal taxes electronically via the Internet or by phone 24 hours a day/7 days a week. Businesses and individuals can pay all their Federal taxes using the Electronic Federal Tax Payment System. Individuals can pay their quarterly 1040 estimated taxes electronically using EFTPS; and they can make payments weekly, monthly or quarterly.

 

Who can use EFTPS to pay taxes online?

Both businesses and individual payments can be scheduled in advance. EFTPS via the Internet is a secure government website that allows users to make Federal tax payments.Every user must have a secure Internet browser to access the site.

 

Using EFTPS and IRS Website

To log onto the system, an enrolled user must authenticate it with three pieces of unique information: taxpayer identification number, and again, that’s going to be your EIN or Social Security number; the EFTPS personal identification number or pin; and an Internet password. The combination of these three pieces of identification adds to the security of the site and the privacy of your data. To use EFTPS, you must first enroll.To enroll, or for more information online, visit www.irs.gov and select the EFTPS link.

 

What is IRS Free File for Self Employed Individuals?

Now let’s talk about Free File. It makes filing your Federal tax returns easy if your income is less than $60,000 a year. The Free File software does the hard work for you, with free tax preparation and free e-Filing. It’s available only through the www.irs. gov website where tax software companies make their products available for free. Some also support State tax returns for free. Go to www.irs.gov and select the Free File link on the Home Page to take advantage of this option. Regardless of income, everyone can use online fillable forms, which are electronic versions of the IRS’s paper forms. This option is best for people who are comfortable preparing their tax returns but want the advantages of fast, free, and secure e-Filing.

 

Who can use IRS efile to pay taxes?

Fillable forms do only basic math and do not support State tax returns. Everyone can file their Federal tax return electronically with IRS e-File. The advantages of e-File are receiving your refund in half the time or, if you owe taxes, payment options are available.Buy tax preparation software either over the counter or online, prepare your own returns, and press Send to e-File. Your return is sent through e-mail in a safe and secure manner. Prices do vary so shop around. Or use Free File if you qualify. Or you could find a tax professional you trust to prepare and e-File your return. It’s still a good idea to tell your tax preparer you want the advantages of e-File.

Picking a Tax Preparer for 2015

Although there is still time before the next 2015 tax season, choosing a tax preparer now allows more time for taxpayers to consider appropriate options for your tax preparation need. You can also find and speak with possible tax preparers and not during tax season when they are busiest. Lastly, this also allows taxpayers to make a little tax planning for the rest of the year. If a taxpayer would prefer to pay someone to prepare your return, the IRS encourage taxpayers to find someone qualified.

Here some tips that taxpayers can take into account when selecting a tax professional:

  • Select a preparer with ethics. Taxpayers trust some of your most important personal information with the person who prepares your tax return, including income, investments and Social Security numbers.
  • Ask Questions. Avoid preparers who based their fees on a percentage of the refund or those who say they can get refunds higher than others. Taxpayers should make sure that any refund that is due to them be sent to them or deposited in your bank account, not in a tax preparer bank account.
  • Be sure to choose a preparer with an identification number (PTIN). Paid tax preparers must have a current PTIN to prepare a tax return. It is also a good idea to ask the tax preparer if they belong to a professional organization and attends continuing education classes for learn about 2015 tax changes.
  • Investigue history of the tax preparer. Check with the Better Business Bureau (BBB) to see if your tax preparer has a questionable record. To check the status of an enrolled agent license, check with the registration office of the IRS (enrolled agents are licensed by the IRS and are trained specifically in the federal tax planning, preparation and representation). For certified public accountants (CPAs), check with the State Board of accountancy; for attorneys, call the State Bar Association.
  • Request  E – file. Any tax preparer that prepares and files more than 10 tax returns for customers, in general must submit returns electronically to the IRS
  • Provide tax records. A good preparer will ask you to show your records and receipts. Avoid the tax preparer who is willing to file a return electronically using the last paystub rather than the form W-2. This goes against the rules of e – file for IRS.
  • Make sure that the tax preparer is available throughout the year. This can be useful if you have questions about taxes. Taxpayers can designate your pay or other third party tax preparer to speak with the IRS regarding the preparation of your tax return, problems with the payment and/or refund and mathematical errors. The box of permission of the third party in the form 1040, 1040A, and 1040EZ gives the third designated the authority to receive and inspect statements and declarations information for one year from the original deadline for the tax return (without taking into account the extensions).
  • Check the tax return and ask questions before you sign it. Taxpayers are legally responsible for what appears on their tax return, regardless if someone else prepared it. Make sure that it is accurate before you sign it.
  • Never sign a blank tax return. If a taxpayer signed a blank 1040, the preparer could put whatever he wants in the tax return – even his own bank account for tax refund number.
  • The tax preparer must sign the tax return and include their PTIN as required by law.
To assist taxpayers in determining the credentials and qualifications of a tax preparer, the IRS launched a public directory  at the beginning of this year that contains some tax professionals. The directory is a database where you can search and sort with the name, city and postcode of credentialed tax preparers as well as those who have completed the requirements for the new annual program of tax filing from the IRS  and have a PTIN
Any professional with a PTIN from the IRS tax is authorized for preparing federal tax returns. However, tax professionals have different levels of skill, education and experience. An important difference in the types of preparers are “rights to representation”. Below is a guide on each credential and qualification:
Rights of representation without limit: enrolled agents, lawyers and public accountants have rights of representation without limits with the IRS. With these credentials tax professionals may represent clients on any matter, including audit, issues of payment and collection, and appeals.

What is an IRS Enrolled Agent?

Enrolled agents (EAs) are authorized by the IRS. Enrolled agents are subject to a verification and must pass a special exam for registration of three parts, this full test forces them to demonstrate his skill in the federal tax planning, preparation and representation of business and individual tax statements. They must complete 72 hours of continuing education every three years.

What is a Certified Public Account (CPA)?

Certified Public Accountants (CPAs) – are authorized by the State boards of accountancy, the District of Columbia and the U.S. territories. Accountants have passed the Uniform CPA examination. They have completed a study of accounting at a college or University and also met the requirements of experience and good behavior set forth by their respective boards of Directors of accounting. In addition, public accountants must comply with ethics requirements and complete continuing education courses to maintain active CPA license. The CPAs can provide a range of services; some public accountants specialize in the tax preparation & planning.

What is a Lawyer?

Lawyers – authorized by State courts, the District of Columbia or its designee, as the status bar. In general, they have obtained a degree in law and passed a test of access to the legal profession. Lawyers usually have continuing education and professional behavior standards. They can also provide a range of services; Some lawyers specialize in tax preparation and planning.

Non-Registered Tax Preparers

 Preparers without one of these (also known as non-registered preparers) credentials have limited practice rights. They may only represent clients whose statements they prepared and signed, but only to the agents of taxes, representatives of service to the customer and similar IRS employees, including the taxpayer advocate service. They cannot represent clients whose statements are not prepared, and not representing clients with respect to appeals or payment issues even if they prepared and signed the Declaration in question.

IRS Registration of Tax Preparers

The participants of the annual program of tax filing from the IRS – this new voluntary program recognizes the efforts of preparers of tax returns that are usually not lawyers, registered agents or certified public accountants. The IRS issues a record of compliance with the annual programme of tax filing from the IRS preparers who obtain a certain number of hours of continuing education as they prepare for a given tax year. After the presentation of tax of the 2015 season, non-enrolled tax preparers might choose to participate in this program from the IRS, which was designed to promote the education and prepare for the tax filing season.

Common 2015 Tax Errors to Avoid This Year

Before you file your return, review it and make sure it is complete and correct. The following checklist can help you avoid common mistakes:

 

Errors Filing Taxes Electronically

Did you consider filing your taxes electronically? When filing your taxes electronically, you can avoid many common errors, which are corrected by the computer program. Depending on your income, you may qualify to use free electronic filing system of the IRS. Free File More information about the “e-file” is available on the website of the IRS .

 

Entering Mistakes on Tax Forms

Did you write the statement in print and clearly, or print your name, Social Security number and address including postal code in the tax return ? Note: If you are married but filing separately, do not include the name of your spouse designated for the name, address and Social Security number in the declaration fields.

Did you write down the names and Social Security numbers for yourself, your spouse (if they make a joint return), their dependents and children qualified for purposes of the earned income credit or child tax credit, exactly like those names and numbers are on Social Security cards? If there has been any change of name, be sure to contact the Social Security Administration, accessing http://www.ssa.gov/r by calling 1-800-772-1213.

 

Mistakes with Tax Exemptions

Did you check only one filing status declaration? Did you check the appropriate boxes exemption for all dependents claimed by you and scored the names and Social Security numbers exactly as those names and numbers are on the Social Security card for each person? Do I indicate the number full of exemptions claimed?

 

Mistakes on Tax Calculations

Did you write down the income, deductions and credits on the right lines? Are the totals correct? If your tax return shows a negative amount, did you write in the brackets? If you take the standard deduction and marked the boxes that indicate you or your spouse are age 65 or older or is blind, scored the correct standard deduction using the worksheet contained on the tax return? Did you correctly calculated the tax? If you used the correct tax tables for year 2014? Did you use the correct column for your filing status declaration?

 

Forgetting to Sign a Tax Return

Did you sign and date the return? If a joint return, does your spouse also signed and dated the declaration? Do you have a Form W-2 from each of your employers and attached to your statement Copy B of each Form W-2? If you have more than one job, combine wages and withholding taxes of all Forms W-2 to receive and report these amounts in a single statement. Did you append each Form 1099-R showing federal withholding tax? Did you attach to your return all required schedules and forms in sequence numerical order as shown in the upper right corner?

 

Correct Mailing Address with Tax Return

Did you use the correct mailing address to send your return, which can be found in the corresponding instruction booklet to your tax form? Did you include the corresponding postmark on the envelope? If you owe taxes, did you include a check or money order payable to “United States Treasury” with the return? Did you write on the check or money order, your name, address, Social Security number, phone number where we can reach you during the day, the tax form used and the tax year? If you receive a refund and requested direct deposit, did you check account numbers and circulation or transit of your bank? Did you keep a copy of the signed and dated tax return and all schedules and attachments for your records?

 

Some of the most common tax returns errors are:

  1. Social Security numbers missing or incorrect.
  2. The tax does not match recorded taxable income and filing status of the statement indicated in the statement.
  3. Miscalculations in determining taxable income, withholding and estimated tax payments, the Earned Income Tax Credit, the standard deduction for being age 65 or older or be blind, the taxable amount of Social Security benefits and credit care expenses for child and dependent. Furthermore, the identification numbers of child care providers are omitted or are incorrect.
  4. Withholding and estimated tax payments are recorded in the wrong line.
  5. Mathematical errors, both sum and subtraction.

 

Fixing Common Tax Return Errors

It is important to review the full statement as an error could delay the processing for a long time.

 

IRS Free File for Filing 2015 Taxes With IRS

IRS Free File is a fast, secure and free file your federal tax basis. Free File do the hard work for you with a program of tax, whether branded or interactive online forms. Here are five tips you should know about Free File.

 

Information about IRS Free File

  1. Free for all options.   There is a free option for everyone. People who earn $ 60,000 or less – 70 percent of Americans – can choose an easy to use program to do your taxes and e-file for free.People who earn more than $ 60,000 can use Free File Fillable Forms, the electronic version of IRS paper forms.
  2. Free File do the hard work.   IRS Free File is a partnership between the IRS and 14 tax software manufacturers that make their products are available for free. You need not be a tax expert. The program will help you find tax breaks you could claim, but could overlook, as the Earned Income Credit. The program will provide you questions and answers. We will choose the correct tax forms and perform calculations. Free File can also help with the new tax provisions of the law of health care.
  1. Free File on IRS.gov.  Only you can access IRS Free File IRS.gov/freefile . Thus any charges will be avoided by the preparation and electronic filing your federal tax return. Once you choose a company Free File, you will go to your website to prepare, print and send your federal tax.
  1. Free Extensions.   If you can not file by the deadline of April 15, you can use Free File to request an extension. Complete the application is easy and free through the IRS Free File.Simply search “extensions free” (free extension) in the company’s offerings. Remember, this is a six-month extension of time to file your taxes, not to pay the tax. If you think you should, estimate your extension request payment.
  1. Use IRS e-file.   Remember, the fastest way to get your refund is to combine e-file with direct deposit. If you owe taxes, you can file for e-file now set up an automatic payment on any day until the deadline of April 15. To see payment options visit: IRS.gov/payments .