Security Awareness for Taxpayers: The Tax Community Needs Your Help

ANNAPOLIS, Md. (January 10, 2017) – The Maryland Comptroller’s Office and the federal Internal Revenue Service are doing everything they can to protect Marylanders from identity theft. But officials at both agencies urge Marylanders to take steps necessary to protect their personal and financial data.

Cybercriminals continue to steal enormous amounts of personal data from outside the tax system and to use that data to file fraudulent tax returns or commit other crimes while impersonating the victims.
Comptroller Peter Franchot urges Marylanders to take these steps to protect themselves and their data:

Keep Computers Secure
• Use security software and make sure it updates automatically; essential tools include using a firewall, virus/malware protection and file encryption for sensitive data.
• Treat personal information like cash, don’t leave it lying around.
• Taxpayers should check out companies to find out who they are really dealing with.
• Give personal information only over encrypted websites – look for “https” addresses.
• Use strong passwords and protect them.
• Back up their files.

Avoid Phishing and Malware
• Avoid phishing emails, texts or calls that appear to be from the IRS, tax companies and other well-known business; instead, go directly to their websites.
• Marylanders should not open attachments in emails unless they know who sent it and what it is.
• Download and install software only from known, trusted websites.
• Use a pop-up blocker.
• Families should talk about safe computing practices.

Protect Personal Information

Citizens should not routinely carry their Social Security card or any documents with their SSN. They should not overshare personal information on social media. Information about past addresses, a new car, a new home and one’s children help identity thieves pose as someone they’re not. Maryland citizens should keep old tax returns and tax records under lock and key or encrypted, if electronic. They should shred tax documents before trashing.

The IRS urges citizens to watch out for IRS impersonators. Officials there say “the IRS will not call you with threats of jail or lawsuits. The IRS will not send you an unsolicited email suggesting you have a refund or that you need to update your account. The IRS will not request any sensitive information online. These are all scams, and they persistent and change frequently. Don’t fall for them. Forward IRS-related scam emails to phishing@irs.gov. Report IRS-impersonation telephone calls at www.tigta.gov.”

Additional steps:
• Citizens should check their credit report at least annually and check their bank and credit card statements often;
• Citizens should review their Social Security Administration records annually. They can sign up for My Social Security at www.ssa.gov.
• If someone is an identity theft victim whose tax account is affected, they should review http://www.irs.gov/identitytheft for details.

For more information, visit IRS.gov.

 

Tax Preparedness Series: What to Do Before the Tax Year Ends on Dec. 31

ANNAPOLIS (December 28, 2016) – As tax filing season approaches, the Internal Revenue Service is reminding taxpayers there are things they should do now to get ready for filing season.

For most taxpayers, Dec. 31 is the last day to take actions that will impact their 2016 tax returns. For example, charitable contributions are deductible in the year made. Donations charged to a credit card before the end of 2016 count for the 2016 tax year, even if the bill isn’t paid until 2017. Checks to a charity count for 2016 as long as they are mailed by the last day of the year.

Taxpayers who are over age 70½ are generally required to receive payments from their individual retirement accounts and workplace retirement plans by the end of 2016, though a special rule allows those who reached 70½ in 2016 to wait until April 1, 2017 to receive them. Most workplace retirement account contributions should be made by the end of the year, but taxpayers can make 2016 IRA contributions until April 18, 2017. For 2016, the limit for a 401(k) is $18,000. For traditional and Roth IRAs, the limit is $6,500 if age 50 or older and up to $15,500 for a Simple IRA for age 50 or older.

Taxpayers who have moved should tell the U.S. Postal Service, their employers and the IRS. To notify the IRS, mail IRS Form 8822, Change of Address, to the address listed on the form’s instructions. For taxpayers who purchase health insurance through the Health Insurance Marketplace, they should also notify the Marketplace when they move out of the area covered by their current Marketplace plan.

For name changes due to marriage or divorce, notify the Social Security Administration (SSA) so the new name will match IRS and SSA records. Also notify the SSA if a dependent’s name changed. A mismatch between the name shown on your tax return and the SSA records can cause problems in the processing of your return and may even delay your refund.

Effective Jan. 1, 2017, any Individual Taxpayer Identification Number (ITIN) not used at least once on a tax return in the past three years will no longer be valid for use on a return. In addition, an ITIN with middle digits 78 or 79 will also expire on Jan. 1. Those with expiring ITINs who need to file a return in 2017 must renew their ITIN. Affected ITIN holders can avoid delays by starting the renewal process now.

Taxpayers should allow seven weeks from Jan. 1, 2017, or the mailing date of the Form W-7, whichever is later, for the IRS to notify them of their ITIN application status – nine to 11 weeks if taxpayers wait to submit Form W-7 during the peak filing season, or send it from overseas. Those who fail to renew before filing a return could face a delayed refund and may be ineligible for some important tax credits. For more information, including answers to frequently-asked questions, visit the ITIN information page on IRS.gov.

Keeping copies of tax returns is important as the IRS makes changes to protect taxpayers and authenticate their identity. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income amount from a prior tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign their tax return at Validating Your Electronically Filed Tax Return.

For more information, visit IRS.gov.

Tax Preparedness Series: Tax Records – What to Keep

ANNAPOLIS (December 14, 2016) – As tax filing season approaches, the Internal Revenue Service has information for taxpayers who wonder how long to keep tax returns and other documents.

Generally, the IRS recommends keeping copies of tax returns and supporting documents at least three years. Some documents should be kept up to seven years in case a taxpayer needs to file an amended return or if questions arise. Keep records relating to real estate up to seven years after disposing of the property.

Health care information statements should be kept with other tax records. Taxpayers do not need to send these forms to IRS as proof of health coverage. The records taxpayers should keep include records of any employer-provided coverage, premiums paid, advance payments of the premium tax credit received and type of coverage. Taxpayers should keep these – as they do other tax records – generally for three years after they file their tax returns.

Whether stored on paper or kept electronically, the IRS urges taxpayers to keep tax records safe and secure, especially any documents bearing Social Security numbers. The IRS also suggests scanning paper tax and financial records into a format that can be encrypted and stored securely on a flash drive, CD or DVD with photos or videos of valuables.

Now is a good time to set up a system to keep tax records safe and easy to find when filing next year, applying for a home loan or financial aid. Tax records must support the income, deductions and credits claimed on returns. Taxpayers need to keep these records if the IRS asks questions about a tax return or to file an amended return.

It is even more important for taxpayers to have a copy of last year’s tax return as the IRS makes changes to authenticate and protect taxpayer identity. Beginning in 2017, some taxpayers who e-file will need to enter either the prior-year Adjusted Gross Income or the prior-year self-select PIN and date of birth. If filing jointly, both taxpayers’ identities must be authenticated with this information. The AGI is clearly labeled on the tax return. Learn more at Validating Your Electronically Filed Tax Return.

Taxpayers who need tax information can request a free transcript for the past three tax years. The ‘Get Transcript’ tool on IRS.gov is the fastest way to get a transcript.

If taxpayers are still keeping old tax returns and receipts stuffed in a shoebox in the back of the closet, they might want to rethink that approach. Keep tax, financial and health records safe and secure whether stored on paper or kept electronically. When records are no longer needed for tax purposes, ensure the data is properly destroyed to prevent the information from being used by identity thieves.

If disposing of an old computer, tablet, mobile phone or back-up hard drive, keep in mind it includes files and personal data. Removing this information may require special disk utility software. More information is available on IRS.gov at How long should I keep records?.

 

IRS Advice to Those with Expiring ITINs: Apply Now to Avoid Refund Delays; Agency Offers Tips To Avoid Common Errors

ANNAPOLIS (December 9, 2016) – The Internal Revenue Service urges any taxpayer with an expiring Individual Taxpayer Identification Number (ITIN) and a need to file a return in the upcoming filing season to file a renewal application in the next few weeks to avoid refund and processing delays. In addition, the IRS encouraged people to check their renewal application, Form W-7, carefully before filing and offered tips for avoiding common errors being seen.

ITINs are used by people who have tax-filing or payment obligations under U.S. law but are not eligible for a Social Security number. Under a recent law change by Congress, any ITIN not used on a tax return at least once in the past three years will expire on Jan. 1, 2017. In addition, any ITIN with middle digits of either 78 or 79 (9NN-78-NNNN or 9NN-79-NNNN) also will expire on that date.

This means that anyone with an expiring ITIN should act now to make sure they have a renewed ITIN in time to file a return during the upcoming tax season. Failure to do so will result in refund delays and possible loss of eligibility for some tax benefits.

The IRS said that an ITIN renewal application filed now before the end of the year will be processed before one submitted in January or February at the height of tax season.
Currently, a complete and accurate renewal application can be processed in as little as seven weeks. But this timeframe is expected to lengthen to 11 weeks during tax season.

The IRS reports several common errors being seen in recent weeks that are currently slowing down and holding up some ITIN renewal applications. The mistakes generally center on missing information, and/or insufficient supporting documentation. The tax agency stressed that ITIN renewal applicants should be sure to use the latest version of Form W-7, revised September 2016. This is the version of the form, along with its instructions, currently posted on IRS.gov.

To ensure prompt processing of the form, ITIN renewal applicants should also complete the following steps:

• At the top of the form, be sure to check the box that says, “Renew an existing ITIN.”

• Under, “Reason you’re submitting Form W-7,” every applicant must check one of the eight boxes. If more than one applies, be sure to check the option that best describes the tax purpose for filing the application. Do not write, “ITIN renewal,” in this section of the form, as it is not a valid reason.

• On Line 3, an applicant living outside the United States should enter their foreign address, if different from the mailing address on Line 2. If now living in the U.S., be sure to enter the foreign country of last residence. See the Form W-7 instructions for details.

• Include original supporting and required identification documentation, or certified copies from the issuing agency to prove foreign status and identity.

ITIN renewal applicants also are reminded that only a passport with a U.S. entry date is now acceptable as a stand-alone identification document for dependents. This is a change from past policy. This means that dependent ITIN applicants who use a passport without a date of entry must provide additional documentation, along with the passport, to prove U.S. residency. Acceptable documents include:

• If under age 6, a U.S. medical record.

• If under age 18, a U.S. school record.

• If at least age 18, a U.S. school record for anyone who is a student. Otherwise, anyone 18 and over can provide a rental or bank statement or a utility bill listing the applicant’s name and U.S. address.

Dependents from Canada, Mexico, or dependents of U.S. military personnel stationed overseas are exempt from these additional requirements.

 

IRS Warns Taxpayers of Numerous Tax Scams Nationwide; Provides Summary of Most Recent Schemes

IRS Warns Taxpayers of Numerous Tax Scams Nationwide; Provides Summary of Most Recent Schemes

ANNAPOLIS (December 8, 2016) — As tax season approaches, the Internal Revenue Service, many states, including Maryland, and the tax industry remind taxpayers to be on the lookout for emerging tax scams related to identity theft and refund fraud.

Every tax season, there is an increase in schemes that target innocent taxpayers by email, by phone and online. The IRS and Security Summit partners remind taxpayers and tax professionals to be on the lookout for these deceptive schemes. This reminder is presented to taxpayers during the “National Tax Security Awareness Week.” Some of the most prevalent IRS impersonation scams include:

• Requesting fake tax payments: The IRS has seen automated calls where scammers leave urgent callback requests telling taxpayers to call back to settle their “tax bill.” These fake calls generally claim to be the last warning before legal action is taken. Taxpayers may also receive live calls from IRS impersonators. They may demand payments on prepaid debit cards, iTunes and other gift cards or wire transfer. The IRS reminds taxpayers that any request to settle a tax bill using any of these payment methods is a clear indication of a scam. (IR-2016-99)

• Targeting students and parents and demanding payment for a fake “Federal Student Tax”: Telephone scammers target students and parents demanding payments for fictitious taxes, such as the “Federal Student Tax.” If the person does not comply, the scammer becomes aggressive and threatens to report the student to the police to be arrested. (IR-2016-107)

• Sending a fraudulent IRS bill for tax year 2015 related to the Affordable Care Act: The IRS has received numerous reports of scammers sending a fraudulent version of CP2000 notices for tax year 2015. Generally, the scam involves an email or letter that includes the fake CP2000. The fraudulent notice includes a payment request that taxpayers mail a check made out to “I.R.S.” to the “Austin Processing Center” at a Post Office Box address. (IR-2016-123)

• Soliciting W-2 information from payroll and human resources professionals: Payroll and human resources professionals should be aware of phishing email schemes that pretend to be from company executives and request personal information on employees. The email contains the actual name of the company chief executive officer. In this scam, the “CEO” sends an email to a company payroll office employee and requests a list of employees and financial and personal information including Social Security numbers (SSN). (IR-2016-34)

• Imitating software providers to trick tax professionals: Tax professionals may receive emails pretending to be from tax software companies. The email scheme requests the recipient download and install an important software update via a link included in the e-mail. Upon completion, tax professionals believe they have downloaded a software update when in fact they have loaded a program designed to track the tax professional’s key strokes, which is a common tactic used by cyber thieves to steal login information, passwords and other sensitive data. (IR-2016-103)

• “Verifying” tax return information over the phone: Scam artists call saying they have your tax return, and they just need to verify a few details to process your return. The scam tries to get you to give up personal information such as a SSN or personal financial information, including bank numbers or credit cards. (IR-2016-40)

• Pretending to be from the tax preparation industry: The emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics. E-mails or text messages can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information. (IR-2016-28)

If you receive an unexpected call, unsolicited email, letter or text message from someone claiming to be from the IRS, here are some of the telltale signs to help protect yourself.
If you get a suspicious phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

• Do not give out any information. Hang up immediately.

• Search the web for telephone numbers scammers leave in your voicemail asking you to call back. Some of the phone numbers may be published online and linked to criminal activity.

• Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page or call 800-366-4484.

• Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.

• If you think you might owe taxes, call the IRS directly at 800-829-1040.
If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov.

Registration Now Open for 2017 Advance Monthly Payments of the Health Coverage Tax Credit

ANNAPOLIS (November 15, 2016) – The Internal Revenue Service has opened the new registration and enrollment process for qualified taxpayers to receive the benefit of the Health Coverage Tax Credit (HCTC) on an advance monthly basis during 2017.

Eligible taxpayers can have 72.5 percent of their qualified health insurance premiums paid in advance directly to their health plan administrator each month. Each payment made on their behalf to the health plan administrator lowers their out-of-pocket premium costs.

Taxpayers may be eligible to elect the HCTC only if they are one of the following:

• An eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient or reemployment TAA recipient,
• An eligible Pension Benefit Guaranty Corporation (PBGC) payee, or
• The family member of an eligible TAA, ATAA, or RTAA recipient or PBGC payee who is deceased or who finalized a divorce with them.

Taxpayers can now begin the process of registering with the IRS and providing required information to participate in the 2017 Advance Monthly Payment program for the HCTC. This includes completing and mailing Form 13441-A, HCTC Monthly Registration and Update, with all required supporting documents to the IRS.

Once the registration is complete and they are enrolled in the Advanced Monthly Payment HCTC program, the taxpayer must pay 27.5 percent of their health insurance premiums in advance to the HCTC program. Payments are due by the 10th day of each month and must be made through the US Bank Lockbox system. The HCTC program then adds the 72.5 percent advance portion of the HCTC and sends the full payment to the health plan or third party administrator each month.

For more information, including a helpful set of questions and answers, visit IRS.gov/HCTC.

Renewing Your ITIN? Things You’ll Need

ANNAPOLIS, Md. (November 4, 2016) Some Individual Taxpayer Identification Numbers (ITIN) expire at the end of 2016. The Internal Revenue Service issues an ITIN to those who have a filing or reporting requirement but don’t have and are not eligible to get a Social Security number. If you need to renew your ITIN, you should submit a complete application this fall to avoid delays.

The following list includes the documents you’ll need to renew your ITIN:

1. Form W-7. You must submit a completed Form W-7, Application for IRS Individual Taxpayer Identification Number (Rev 9-2016). You don’t need a completed tax return for the renewal application. You must include the identification documents with the form.
2. Proof of foreign status and identity. Several documents satisfy this requirement. These are:

• Passport. (Note: You can use a passport as a stand-alone document for dependents with a U.S. date of entry. Otherwise, an additional ID from the list below is required)
• National ID card (must show photo, name, current address, date of birth and expiration)
• U.S. driver’s license
• Birth certificate (required for dependents under 18)
• Foreign driver’s license
• U.S. state ID card
• Foreign voter’s registration card
• U.S. military ID card
• Foreign military ID card
• Visa
• U.S. Citizenship and Immigration Services (USCIS) photo identification
• Medical records (only dependents under 6)
• School records (dependents under 14, or under 18 if a student)

Only original documents or copies certified by the issuing agency are accepted. If you would rather not mail original documents, you may use the IRS Certified Acceptance Agent (CAA) Program or make an appointment at a designated IRS Taxpayer Assistance Center.

3. Dependent requirements. If you need to renew your ITIN, you have the option to renew ITINs for your entire family at the same time. For dependents from countries other than Canada or Mexico or dependents of U.S. military members overseas, a passport with a U.S. entry date may serve as stand-alone identification. Along with the passport, dependent applications require:

• U.S. medical records for dependents under age 6, or
• U.S. school records for dependents under age 18
• U.S. school records for dependents age 18 and over or,
o Rental statement with the applicant’s name and U.S. address or
o Utility bill with the applicant’s name and U.S. address or
o Bank statement with applicant’s name and U.S. address

To claim certain credits and to receive a timely refund, renew your ITIN before you file your taxes.

Additional IRS Resources:
• Form W-7, Application for IRS Individual Taxpayer Identification Number
• IR-2016-100, IRS Works to Help Taxpayers Affected by ITIN Changes; Renewals Begin in October
• IR-2016-129, IRS Now Accepting ITIN Renewal Applications; Taxpayers Encouraged to Act Soon to Avoid Processing Delays in 2017
• ITIN Expiration Frequently Asked Questions

To share this tip on social media, got to #IRStaxtip: #Renewing Your ITIN? Things You’ll Need. http://go.usa.gov/xkz2p#IRS

 

Employers Face New Jan. 31 W-2 Filing Deadline; Some Refunds Delayed Until Feb. 15

ANNAPOLIS, Md. (Nov. 1, 2016) — The Internal Revenue Service reminds employers and small businesses of a new Jan. 31 filing deadline for Forms W-2. The IRS also must hold some refunds until Feb. 15.

A new federal law, aimed at making it easier for the IRS to detect and prevent refund fraud, will accelerate the W-2 filing deadline for employers to Jan. 31. For similar reasons, the new law also requires the IRS to hold refunds involving two key refundable tax credits until at least Feb. 15. Here are details on each of these key dates.

New Jan. 31 Deadline for Employers
The Protecting Americans from Tax Hikes (PATH) Act, enacted last December, includes a new requirement for employers. They are now required to file their copies of Form W-2, submitted to the Social Security Administration, by Jan. 31. The new Jan. 31 filing deadline also applies to certain Forms 1099-MISC reporting non-employee compensation such as payments to independent contractors.

In the past, employers typically had until the end of February, if filing on paper, or the end of March, if filing electronically, to submit their copies of these forms. In addition, there are changes in requesting an extension to file the Form W-2. Only one 30-day extension to file Form W-2 is available and this extension is not automatic. If an extension is necessary, a Form 8809 Application for Extension of Time to File Information Returns must be completed as soon as you know an extension is necessary, but by January 31. Please carefully review the instructions for Form 8809, for more information.

“As tax season approaches, the IRS wants to be sure employers, especially smaller businesses, are aware of these new deadlines,” said IRS Commissioner John Koskinen. “We are working with the payroll community and other partners to share this information widely.”

The new accelerated deadline will help the IRS improve its efforts to spot errors on returns filed by taxpayers. Having these W-2s and 1099s earlier will make it easier for the IRS to verify the legitimacy of tax returns and properly issue refunds to taxpayers eligible to receive them. In many instances, this will enable the IRS to release tax refunds more quickly than in the past.

The Jan. 31 deadline has long applied to employers furnishing copies of these forms to their employees and that date remains unchanged.

Some Refunds Delayed Until at Least Feb. 15
Due to the PATH Act change, some people will get their refunds a little later. The new law requires the IRS to hold the refund for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until Feb. 15. By law, the IRS must hold the entire refund, not just the portion related to the EITC or ACTC.

Even with this change, taxpayers should file their returns as they normally do. Whether or not claiming the EITC or ACTC, the IRS cautions taxpayers not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. Though the IRS issues more than nine out 10 refunds in less than 21 days, some returns are held for further review.

For more information, please visit www.irs.gov.

 

In 2017, IRS Says Some Tax Benefits Increase Slightly Due to Inflation, Others Remain Unchanged

ANNAPOLIS, Md. (October 26, 2016) — The Internal Revenue Service has announced the tax year 2017 annual inflation adjustments for more than 50 tax provisions, including the tax rate schedules, and other tax changes. Revenue Procedure 2016-55 provides details about the annual adjustments. The tax year 2017 adjustments generally are used on tax returns filed in 2018. The tax items for tax year 2017 of greatest interest to most taxpayers include the following dollar amounts:

• The standard deduction for married filing jointly rises to $12,700 for tax year 2017, up $100 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $6,350 in 2017, up from $6,300 in 2016. For heads of households, the standard deduction will be $9,350 for tax year 2017, up from $9,300 for tax year 2016.

• The personal exemption for tax year 2017 remains as it was for 2016: $4,050. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $261,500 ($313,800 for married couples filing jointly). It phases out completely at $384,000 ($436,300 for married couples filing jointly.)

• For tax year 2017, the 39.6 percent tax rate affects single taxpayers whose income exceeds $418,400 ($470,700 for married taxpayers filing jointly), up from $415,050 and $466,950, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds for tax year 2017 are described in the revenue procedure.

• The limitation for itemized deductions to be claimed on tax year 2017 returns of individuals begins with incomes of $287,650 or more ($313,800 for married couples filing jointly).

• The Alternative Minimum Tax exemption amount for tax year 2017 is $54,300 and begins to phase out at $120,700 ($84,500, for married couples filing jointly for whom the exemption begins to phase out at $160,900). The 2016 exemption amount was $53,900 ($83,800 for married couples filing jointly). For tax year 2017, the 28 percent tax rate applies to taxpayers with taxable incomes above $187,800 ($93,900 for married individuals filing separately).

• The tax year 2017 maximum Earned Income Credit amount is $6,318 for taxpayers filing jointly who have three or more qualifying children, up from a total of $6,269 for tax year 2016. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phase-outs.

• For tax year 2017, the monthly limitation for the qualified transportation fringe benefit is $255, as is the monthly limitation for qualified parking.

• For calendar year 2017, the dollar amount used to determine the penalty for not maintaining minimum essential health coverage is $695.

• For tax year 2017 participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,250 but not more than $3,350; these amounts remain unchanged from 2016. For self-only coverage, the maximum out of pocket expense amount is $4,500, up $50 from 2016. For tax year 2017, participants with family coverage, the floor for the annual deductible is $4,500, up from $4,450 in 2016; however, the deductible cannot be more than $6,750, up $50 from the limit for tax year 2016. For family coverage, the out-of-pocket expense limit is $8,250 for tax year 2017, an increase of $100 from tax year 2016.

• For tax year 2017, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $112,000, up from $111,000 for tax year 2016.

• For tax year 2017, the foreign earned income exclusion is $102,100, up from $101,300 for tax year 2016.

• Estates of decedents who die during 2017 have a basic exclusion amount of $5,490,000, up from a total of $5,450,000 for estates of decedents who died in 2016.

For more information, visit www.irs.gov.

 

 

IRS Reminds Extension Filers of Oct. 17 Deadline

ANNAPOLIS, Md. (October 14, 2016) — Millions of taxpayers ask for an extra six months to file their taxes every year. The Internal Revenue Service says if you are one of them, then you should know that Monday, October 17, is the extension deadline in 2016. This is because October 15 falls on a Saturday. If you have not yet filed, here are some things to keep in mind about the extension deadline and your taxes:

• Try IRS Free File or e-file. You can still e-file your tax return for free through IRS Free File. The program is available only on IRS.gov through Oct. 17. IRS e-file is easy, safe and the most accurate way to file your taxes.

• Use Direct Deposit. If you are due a refund, the fastest way to get it is to combine direct deposit and e-file. Direct deposit has a proven track record; eight out of 10 taxpayers who get a refund choose it.

• Use IRS Online Payment Options. If you owe taxes, the best way to pay them is with IRS Direct Pay. It’s the simple, quick and free way to pay from your checking or savings account. You also have other online payment options. Check them out by clicking on the “Payments” tab on the IRS.gov home page.

• Refunds. As you prepare to file your 2015 return, keep in mind next year’s taxes. IRS is urging taxpayers to check their tax withholding as the year winds down. New factors may delay tax refunds in 2017. For more on what you can do now, see our Aug. 31 news release.

• Don’t Overlook Tax Benefits. Be sure to claim all the tax breaks you are entitled to. These may include the Earned Income Tax Credit and the Saver’s Credit. The American Opportunity Tax Credit can help offset college costs.

• Keep a Copy of Your Return. Be sure to keep a copy of your tax return and supporting documents for at least three years. Among other things, this will make filing next year’s return easier. When you e-file your 2016 return, for example, you will often need the adjusted gross income (AGI) amount from your 2015 return.

• File On Time. If you owe taxes, file on time to avoid a potential late filing penalty. If you owe and can’t pay all of your taxes, pay as much as you can to reduce interest and penalties for late payment. You might also consider an installment agreement where you can pay over time.
• More Time for the Military. Military members and those serving in a combat zone generally get more time to file. If this applies to you, you typically have until at least 180 days after you leave the combat zone to both file returns and pay any taxes due.

• More Time in Disaster Areas. If you have an extension and live or work in a disaster area, you often have more time to file. Currently, taxpayers in parts of Louisiana and West Virginia have additional extensions beyond Oct. 17. See the disaster relief page on IRS.gov for details.

• Try Easy-to-Use Tools on IRS.gov. Use the EITC Assistant to see if you’re eligible for the credit. Use the Interactive Tax Assistant tool to get answers to common tax questions. The IRS Tax Map gives you a single point to get tax law information by subject. Find them all here.

For more information, visit www.irs.gov.