The campaign, which will continue beyond the period of April tax filing, was announced today at an event sponsored by the Federation of Tax Administrators event, made by state tax agencies nationwide. The effort is part of the Security Summit, a collaborative effort initiated in March between states, the IRS and the tax industry.
The coordinated campaign to the consumer contains several components, including YouTube videos, weekly tax tips easily accessible to consumers and local events around the country. Various IRS publications have been added or updated to help taxpayers and tax professionals. Information through IRS.gov, state websites and platforms used by the programming community and other taxes in the tax community will also be shared.
IRS Protecting Personal Data on Tax Returns
“Governments and industry are taking new measures to protect taxpayers To reinforce this further, we are joining forces to share important information through our websites -. Either at the state level, in the tax industry or IRS. This is an unprecedented collaborative effort to tax administration, “said David Sullivan, tax administrator for the tax division of Rhode Island and the former President of the Federation of Tax Administrators.
Clearly, thieves increasingly sophisticated identity have access to a vast amount of personal and financial data, who buy and sell on the black market, and use this data to file fraudulent tax returns using the names and Social Security numbers of the victims. Although the IRS, tax states and industry are taking new measures to strengthen their protection systems to taxpayers, there are things that people can do.
“People cope with some of its most sensitive prepare your taxes on your home computer and personal financial data. But when they sit down, we want to help cerciorar who are preparing their taxes in an apparatus that is safe. Tax season is two months but is not too early for people to ensure they are doing the right things to protect themselves, “said Bernie McKay, executive vice president of Intuit, one of more than 20 members of the tax industry participating in the Summit process.
The IRS, states and industry taxes are urging the public to take active steps to protect themselves.
- Use security program to protect computers. This includes antivirus and “firewall” protection. If the tax or sensitive data stored in computers, encrypt files. Use strong passwords.
- Beware of phishing emails and telephone scams. A common way that identity thieves steal names and Social Security numbers, passwords, credit card numbers, and bank account information is simply requesting the same. Offenders are presented as suspicious organizations trust that you recognize and send spam emails, make calls or send text messages. Your emails can ask update a bank account or a tax program and provide a link to a fake website designed to steal your information only at the beginning of the session. They can call posing as the IRS threatening with lawsuits or imprisonment unless you make an immediate payment. It can provide an annex that if you download it, infect your machine and allow the thief to access confidential files or continue its use keyboard.
- Protect personal information. Do not charge routinely get their Social Security number.Properly dispose of old statements and other shredding sensitive documents before throwing them away. Check your credit reports and accounts of the Social Security Administration at least annually to ensure that no one is using your good credit or using your SSN for employment.Share too much on social media also provides identity thieves even more personal details.
“These are all basic measures, common sense has certainly heard many times if you are a regular user of the Internet. But there are 150 million households that have taxes, problems still occur.Programming safety is still disabled. And there are still daily victims are tricked by these phishing schemes suspicious. This can not only hurt the targeted individuals, this can have a direct impact on the tax administration, “Koskinen said.
The partners are asking all tax preparers and companies to share information with employees, customers and users. See www.irs.gov/spanish/impuestos.-seguridad.-juntos. for more information.There is also the Publication 4524 , security awareness for taxpayers (in English), which provides a brief description of the measures that taxpayers can take.
In March, Koskinen called an unprecedented meeting between the IRS, state tax officials and tax industry to determine what further action might be taken. On October 20, the participants of the Security Summit provided an update to the public.
For the 2016 tax season, there will be new rules for accessing all tax software products such as minimum requirements for passwords, security questions and new standard features blockade. The software industry will provide more than 20 additional data elements of the presentation of the tax return to the IRS and in turn, to the states to help identify fraudulent claims. All participants agreed to share information on a weekly basis to help quickly identify fraud schemes related to new and emerging tax and adjustments.
The IRS also continues to work to help victims of identity theft and pursue criminals who use identity information to file fraudulent tax returns. The Criminal Investigation Division IRS has worked on thousands of cases of identity theft. Since 2013, nearly 2,000 identity thieves have been convicted, with an average sentence of more than three years.
The IRS Tax Bracket for 2015 tax is different, yet similar to the tax bracket for 2014. Every year, the IRS adjusts more than 40 tax provisions for inflation to make sure the numbers do not get out of whack with what is going on in the economy.
IRS Tax Bracket for 2015 and Standard Deduction
This is done to prevent what is called “bracket creep.” and occurs when people are pushed into higher income tax brackets or have reduced value from credits or deductions due to inflation. Tax rates often vary by tax year and may be different for each filing status.
Choosing Correct Tax Filing Status for 2015
It is very important to accurately identify your filing status in order to ensure you are using the right IRS tax bracket for 2015. Specifically, for tax year 2015, the IRS announced annual inflation adjustments for more than 40 tax provisions, including the tax rate schedules, and other tax changes. Revenue Procedure 2014-61 provides details about these annual adjustments and some of the most important changes to the tax brackets for 2015 are addressed below beginning more importantly with the tax bracket for single, married join, and head of household tax filers.
IRS Tax Bracket for 2015
|Married/Separate||Head of Household|
|10%||$1 – $9,075||$1 – $18,150||$1 – $9,075||$1 – $12,950|
|15%||$9,076-$36,900||$18,151 to $73,800||$9,076 to $36,900||$12,951 to $49,400|
|25%||$36,901 to $89,350||$73,801 to $148,850||$36,901 to $74,425||$49,401 to $127,550|
|28%||$89,351 to $186,350||$148,851 to $226,850||$74,426 to $113,425||$127,551 to $206,600|
|33%||$186,351 to $405,100||$226,851 to $405,100||$113,426 to $202,550||$206,601 to $405,100|
|35%||$405,101 to $406,750||$405,101 to $457,600||$202,551 to $228,800||$405,101 to $432,200|
|39.6%||over $406,750||over $457,600||over $228,800||over $432,200|
3.8% federal Medicare tax
Furthermore, Additional 3.8% federal Medicare tax applies to individuals on the lesser of net investment income or modified AGI in excess of $200,000 (single) or $250,000 (married/filing jointly and qualifying widow(er)s). Also applies to any trust or estate on the lesser of undistributed net income or AGI in excess of the dollar amount at which the estate/trust pays income taxes at the highest rate.
IRS Standard Deduction for 2015
In addition to changes in the tax brackets for 2015, all taxpayers will see a slight bump in the standard deduction which is also adjusted for inflation. The standard deduction in 2015 rises to $6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly, up from $6,200 and $12,400, respectively, for tax year 2014. The standard deduction for heads of household rises to $9,250, up from $9,100 in tax year 2015. Remember, that with all these values, this will be for taxes in 2015 and not for taxes in 2014. Furthermore, the personal exemption rose by $50 in 2015 to $4,000. The personal exemption is subject to a phase-out that begins with AGI of $258,250 ($309,900 for married couples filing jointly). It phases out completely at $380,750 ($432,400 for married couples filing jointly). This means that couples above these income limits will start seeing a reduction in their personal exemptions.
2015 Personal Exemption Amounts
You are allowed to claim one personal exemption for yourself and one for your spouse (if married). However, if somebody else can list you as a dependent on their tax return, you are not permitted to claim a personal exemption for yourself. For tax year 2015, the personal exemption amount is $4,000 (up from $3,950 in 2014).
The personal exemption amount “phases out” for taxpayers with higher incomes. The Personal Exemption Phaseout (PEP) thresholds are as follows:
|Filing Status||PEP Threshold Starts||PEP Threshold Ends|
|Married Filing Jointly||$309,900||$432,400|
|Married Filing Separately||$154,950||$216,200|
|Head of Hosuehold||$284,050||$406,550|
2015 Limitation on Itemized Deductions
As in 2013 and 2014, the amount of itemized deductions which you are allowed to claim is reduced by 3% of the amount by which your adjusted gross income exceeds certain threshold amounts. These threshold amounts are the same as the lower threshold amounts listed above for the personal exemption phaseout (e.g., $258,250 for single taxpayers). However:
- Your itemized deductions cannot be reduced by more than 80% as a result of this limitation, and
- Your itemized deductions for medical expenses, investment interest expense, casualty/theft losses, and gambling losses are not reduced as a result of this limitation.
Other Important Tax Increases for 2015
In addition the changes in the 2015 tax bracket, there are also several other important tax increases that occurred in 2015.
- The 2015 maximum Earned Income Credit (EIC Credit) amount is $6,242 for taxpayers filing jointly who have 3 or more qualifying children that are eligible for the EITC, This is up from a total of $6,143 for tax year 2014. The IRS has information on the earned income credit and a table providing maximum credit amounts for other categories, income thresholds and phaseouts.
- The small business health care tax credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,800 for tax year 2015, up from $25,400 for 2014.
- Lastly, the Alternative Minimum Tax (AMT) exemption amount for tax year 2015 is $53,600 ($83,400, for married couples filing jointly). The 2014 exemption amount was $52,800 ($82,100 for married couples filing jointly). The AMT is something that taxpayers in certain taxpayers must pay. Online tax preparation software will have all the information needed to calculate returns using the updated tax bracket information for 2015.
2015 IRA and 401(k) Contribution Limits
For 2015, the contribution limit to Roth and traditional IRAs is unchanged at $5,500, with an additional catch-up contribution of $1,000 for people age 50 or older.
The contribution limit for 401(k), 403(b), and most 457 plans, however, is increased to $18,000, with an additional catch-up contribution of $6,000 for people age 50 or older. The maximum possible contribution for defined contribution plans is increased from $52,000 to $53,000.
More Information about 2015 and 2016 Earned Income Tax credit (2015 EIC)
- Claiming EITC for Prior Tax Years
- 2015 Earned Income Tax Credit (2015 EIC)
- 2016 Earned Income Tax Credit (2016 EITC)
- Is child support considered earned income when calculating the earned income credit?
- EITC and Veterans
- Filed Tax Return Forgot Earned Income Credit EIC
- Form W-5 Earned Income Credit
- State Earned Income Tax Credit
Most people have their taxes filed because it is required, but even if they do not have to legally file taxes, there are times when you should file a federal tax return. For example, you may be eligible for a tax refund and not know it.
Who Must File a Tax Return for 2014
This year there are several new rules for some people in regards to health insurance. It is important to remember, that when in doubt, it is probably better to file a tax return than not filing. Forgetting to file a tax return can lead to IRS penalties and fine. No one wants that. . Here are six tax tips to help you decide whether to file a tax return.
Do you need to file a tax return?
- General filing requirements. The need to file a tax return depends on several factors. For most taxpayers, the amount of your income, filing status, and age determine whether you should file taxes. For example, if you are single and 30 years old, you must file a tax return if your income was at least $ 10,150 in 2015. Other rules may apply if you are self-employed or if you are a dependent of another person. There are other situations in which they must submit. Visit IRS.gov/filing to determine if you need to file a tax return.
- New for 2014: ACA Tax Credit. If you obtained health coverage through the Health Insurance Marketplace in tax year 2014, you may be eligible for a new tax credit. You must file a tax return to claim the credit. If you purchased coverage through the market in 2014 and chose the premium tax credits that were sent in advance directly to the insurance company during the year, you must file a federal tax return. You must reconcile any prepayment premium tax credit allowed. Your health insurance market will provide the form 1095-A, Statement Health Insurance Market in early February.The new form contains the information you need to file your tax return in order to properly be eligible for this tax credit.
- Withholding or Paid. Does your employer withheld federal income tax from your pay? Did you pay over the last year and applied to tax this year? If you answered “yes” to any of these questions, you may have a refund due. But you must file a tax return to get it.
- Earned Income Tax Credit (EITC). Did you work last year and earned less than $ 52,427? You may receive the EITC as a refund if you qualify, with or without a qualifying child. You may be eligible for up to $ 6,143.
- Additional Child Tax Credit. Do you have at least one qualifying child for the child tax credit? If you do not receive the full amount of the credit, you may qualify for the Additional Child Tax Credit.
- The American Opportunity Credit. The American Opportunity Credit is available for the first four years of higher education and can be up to $ 2,500 per eligible student. You or your dependent must be students enrolled at least half time during an academic period. Even if you do not owe taxes you may qualify. However, you must file Form 8863, Education Credits, and file a tax return to receive credit. Use the Interactive Tax Assistant Tool on IRS.gov to determine if you can claim the credit. Learn more by visiting online on Education Credits. Instructions for Forms 1040 , 1040A or 1040EZ listed requirements to file a tax return.
Additional IRS Resources on Who Should File Taxes
- Form 8962 , Health Insurance Tax Credit
- Publication 5187 , Health Care Law: What’s New for individuals and families
- Annex 8812 (1040A or 1040), Child Tax Credit
- Form 8863 , Education Credits
- Publication 596 , Earned Income Tax Credit
- Publication 972 , Child Tax Credit
- Publication 970 , Tax Benefits for Education
Most people forget about taxes after filing. But there is no better time than the present to start planning all about taxes for the next year. It’s never too early to establish a system of organized record. Here are six tips from the IRS to help you plan for taxes this year:
Planning for Next Years Tax Return in 2014
- Take action when changes in your life . Some events in life, such as a change in marital status, birth of a child or buying a house can change the amount of tax you owe. When such events occur during the year, you may need to change the amount of taxes withheld from your pay. To do so, you must file a new Form W-4 “Form for Withholding Allowance Certificate Employee” with your employer. Use the Withholding Calculator on IRS.gov to help you complete the form. If you receive advance payments of the tax credit insurance premium, it is important to declare changes in circumstances, such as changes in income or family size, in Health Insurance Market.
- Save documents in a safe place . Keep your 2013 tax return and all attachments relevant in a safe place. This way if you ever need to refer to your statement, you will know where to find it.For example, you may need a copy of your return if you apply for a home loan or financial aid.You can also use it as a useful guide to the statement next year.
- Stay organized. sure your family keep tax records in the same place throughout the year. This will prevent a search for records that are out of place when tax season arrives next year.
- Find a Tax Preparer. Whether you want to hire a tax preparer to help you plan your taxes, now is the time to start the search. Choose wisely your tax professional. You are responsible for the information in your own statement regardless of who is preparing it. Find tips for choosing a trainer on IRS.gov.
- Consider itemize deductions. If you usually claim a standard deduction on your tax return, you could reduce your tax liability if you choose to itemize deductions . A charitable donation could save tax. See the instructions for Schedule-A “Itemized deductions” to the list of expenses that can be deducted.
- Keep up with the changes. Subscribe to IRS Tax Tips for emails about changes in tax laws, how to save money and more. You can also get advice on IRS.gov or IRS2Go, the mobile app from the IRS. The IRS gives advice on weekdays during tax season and three days a week in the summer.
Remember, a little planning can now pay in more than during tax season next year.
Additional Resources IRS on Filing Tax Return
- Publication 505 , (in English) Tax Withholding and Estimated Tax
If you file your tax returns electronically using software to file online, you must sign the tax return using the method of self-signed personal identification number ( PIN).This method allows taxpayers to electronically sign your tax on personal income by selecting a PIN five digits.
Using PIN to file Tax
The PIN consists of five digits (excluding all zeros) you choose to enter as your electronic signature. Each taxpayer who files a joint return need a PIN and each can select any combination of five digits. As part of the identity verification process, each taxpayer enters his birth date and the adjusted gross income ( AGI , for its acronym in English), as entered on the original return for the preceding year, or PIN last year .
If you can not access information from your tax return for tax year 2012 for purposes of verification of electronic signatures, the IRS will issue a PIN for electronic filing temporarily to taxpayers who qualify . If you need an EFP, you can access the application on the IRS website.
E-File your Tax Return
Generally, you can electronically file your tax return even if you are required to submit certain paper forms or certain corroborating documents. Use Form 8453, Report of Individual Income Tax in the United States by Means of E-filing IRS e-file, to transmit paper forms or corroborating documents required.
Taxpayers appearing as the main respondent who are under 16 years of age who have never presented and secondary taxpayers under age 16 who did not show for 2012 can not use the method of self-signing PIN to sign. Affected taxpayers can still file electronically using the method of PIN professional preparer.
Using a PIN to File Tax Return Electronically
The IRS advised taxpayers to retain a copy of your return for your records, so that this helps with the electronic signature of the declaration submitted electronically next year. If you need a copy of your tax transcript, you are also able to do this from the IRS website.
Students applying to college and their parents generally need to supply tax information on the FAFSA for financial aid.
IRS Information and FAFSA Form for College
The Internal Revenue Service (IRS) is helping to reduce the time spent preparing the Free Application for Federal Student Aid (FAFSA) by the automated access to federal tax Tool IRS Data Recovery. This tool provides the opportunity for applicants to automatically transfer tax data required on the FAFSA.
Here are some tips on using the IRS Data Recovery Tool for FAFSA.
- It is an easy and secure way to access and transfer information from your tax return directly to the FAFSA form, saving time and improving accuracy. In addition, the increased accuracy reduces the likelihood of being selected for verification by the financial aid office.
- Eligibility Taxpayers wishing to use the tool to complete your FAFSA form 2014 must:
- have filed a 2012 tax return;
- have a valid Social Security Number;
- will have a PIN Federal Student Aid (people who do not have a PIN, you will be given the option of requesting one through the FAFSA application process);
- not have changed marital status since December 31, 2013.
- Exceptions If any of the following conditions apply to students or parents, the tool data recovery IRS can not be used for the 2014 FAFSA application:
- amended tax return was filed for 2013;
- has not filed a federal tax return for 2013;
- the filing status of the 2013 tax return is married filing separately;
- has filed a Puerto Rican or other foreign tax return.
- Alternatives If the IRS Data Recovery Tool can not be used if the college requires verification of documentation may be required to obtain an official transcript from the IRS. To order transcripts of tax returns or tax bills, visit www.irs.gov and select Order a Transcript (in English) or call toll free 1-800-908-9946.
FAFSA by the Data Recovery Tool from the IRS
Besides helping to reduce the time and effort required to complete and submit the FAFSA by the Data Recovery Tool from the IRS, the IRS provides information to save money for college students and their parents.
If you are an independent contractor or drive your own business, there are some basic things you should know when it comes to their federal taxes. Here are six tips on receipts from self-employment:
Self-Employment Tax Tips
- Income from self-employment may include receiving pay for work part time. This is in addition to your regular income job.
- You must file a Schedule C , Profit or Loss from Business, or Schedule C-EZ , Net Profit from Business (in English) with your Form 1040.
- Usually you have to pay taxes self-employed as well as the federal income tax if it had. The self-employment taxes include Social Security taxes and Medicare. Use Schedule SE , Self-Employment Tax Account to calculate the tax. Be sure to attach this form to your return.
- If self-employed have to make payments of estimated tax . People often make these payments on income that is not subject to withholding. You will pay a penalty if you do not pay enough tax during the year.
- You can deduct certain expenses for business costs to execute your trade or business. You can deduct most business expenses in full, but some of the costs should be capitalized.This means you can deduct a portion of the cost each year over a period of years.
- You can deduct only those expenses that are ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business.
IRS Small Business Tax Info Center
Visit IRS.gov the Tax Center for Small Business and Self-employed ( Small Business and Self-Employed Tax Center ,) for all your tax needs.
Additional Resources IRS
Earned Income Credit 2014 table
Earned Income and adjusted gross income (AGI) must each be less than:
- $46,997 ($52,427 married filing jointly) with three or more qualifying children
- $43,756 ($49,186 married filing jointly) with two qualifying children
- $38,511 ($43,941 married filing jointly) with one qualifying child
- $14,590 ($20,020 married filing jointly) with no qualifying children
Tax Year 2014 maximum EITC credit:
- $6,143 with three or more qualifying children
- $5,460 with two qualifying children
- $3,305 with one qualifying child
- $496 with no qualifying children
Investment income must be $3,350 or less for the year in order to qualify for this tax credit. If a taxpayer exceeds this amount, they will not be eligible for the earned income credit in 2014. It is very important to follow this limitation with claiming the EITC.
For more information on whether a child qualifies you for EITC, see Qualifying Child Rules orPublication 596, Rules If You Have a Qualifying Child. The earned income credit 2014 rules will change greatly if a taxpayer has a qualifying child. The more qualifying children, the tax credit will be larger.
The American Tax Relief Act of 2012
The American Tax Relief act extended the relief for married taxpayers, the expanded credit for taxpayers with three or more qualifying children and other provisions to December 31, 2017.
Legal Same-Sex Marriages Will Be Recognized For Federal Tax Purposes
The U.S. Department of the Treasury and the Internal Revenue Service recently ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. Under the ruling, same-sex couples will be treated as married for all federal tax purposes where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit. For tax year 2013 and going forward, same-sex spouses generally must file using a married filing separately or jointly filing status. For tax year 2012 and all prior years, same-sex spouses who file an original tax return on or after Sept. 16, 2013 (the effective date of Rev. Rul. 2013-17), generally must file using a married filing separately or jointly filing status.
The ruling implements federal tax aspects of the June 26 Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act. Read more here.
More Information about 2015 and 2016 Earned Income Tax credit (2015 EIC)
The government shutdown that occurred in October 2013 will likely have effects on the 2014 tax filing season and will push tax refunds from 2013 further back into 2014. The IRS announced that it would not start processing 2013 tax returns until January 31, 2014.
Government Shutdown and 2013 Tax Refund Delays
This is 10 days later than originally scheduled which could mean a delay in a tax refund for certain types of taxpayers. However, this delay won’t matter to a lot of people because W-2s, 1099s, etc. don’t have to be ready until the end of January. Most employers and banks will wait to close to this deadline before sending out information. As such, most people can’t file until sometime in February anyway. Therefore, the delay does not seem as serious as people are making it about getting their tax refunds late. Furthermore, estimated taxes and quarterly returns; individuals with no income who qualify for tax credits (money for not paying any money) and those who estimate their taxes can, in theory, file as early as January 1.
Government Shutdown and IRS
The IRS put that blame on this delay by the 16-day partial government shutdown in October. The shutdown stopped the normal working operations of the IRS and interrupted the process for updating IRS systems for the 2014 tax season. During this shutdown, IRS staff were not working on updating 2013 tax forms and planning how to operate the 2014 tax season.
Taxpayers are advised to file their taxes as soon as possible for 2013 in order to get their tax refunds the quickest. Using e-file will also ensure that 2014 tax refunds are quickly deposited into a taxpayers bank account if they are using the direct deposit option instead of mail to get their refund checks.
The tax due date for returns still remains April 15, 2014 which is set by statute. Taxpayers can request request an automatic six-month extension for filing your return. Although it is heavily recommended that any taxes owed should be paid by April 15 because after that date the taxpayer may be liable for penalties and interest.