What to Expect this Tax Season
In 2017, we have a new President and new Congress. It is clear there will be change, but how tax law will be impacted remains to be seen. The good news is there will be no impact on your 2016 income tax returns.
That said, what can you expect this tax season?
Form 1099-B and Form 1099-Consolidated from Investment Accounts
The IRS requires these forms be made available by January 31st. If previous years are any indication, expect them to be delayed again this year. If you have all your other tax information, bring it in so we can get started on your returns.
Form 1095, including Form 1095-A, Form 1095-B & Form 1095-C, showing Health Insurance Coverage
This form comes in several different versions depending on where you get your health insurance.
If you had a break in health insurance coverage or purchased your health insurance through the federal or your state’s health insurance exchange in 2016, the IRS requires a Form 1095 to prepare your income tax return.
However, if you’ve been covered all year and have verification such as a Medicare deduction from your Social Security, cost of employer health insurance shown in Box 12, Code DD on your W-2, or can show it’s been deducted from your retirement, Form 1095 is not required to file your tax return. You should still retain this form for your records.
The IRS is requiring more information from taxpayers and more due diligence from tax professionals preparing returns claiming education credits. In order to claim the credit, taxpayers must have Form 1098-T from their college or university. The credits are based on the amount paid in 2016 for tuition and qualified expenses, so receipts and account statements showing proof of payment are required too.
Visit the IRS Tax Benefits for Education Information Center for all of the details.
We’ve noticed an uptick in IRS requests for verification of eligibility for education credits, so be sure to keep your receipts and proof of payment handy.
Identity Theft, Fraud and Scams
Identity theft continues to be a concern for all of us, including the IRS. Please see Identity Protection: Prevention, Detection and Victim Assistance at irs.gov to learn what the IRS is doing to combat this problem.
The IRS assigned IP PINs to some taxpayers. If you have an IP PIN, be sure to provide the IRS IP PIN letter to your tax professional so your tax return may be e-filed.
The IRS also warns of the latest scams at here. An important part of protecting yourself from scams is awareness.
Online Tax Documents
Many companies make tax documents available online. Don’t overlook a document because it doesn’t arrive in the mail. Log into your account to retrieve your tax documents. Contact the document issuer if the documents aren’t available online or haven’t arrived in your mailbox.
These are just a few highlights, and I hope you find them useful. If your specific situation requires further discussion on these or any other tax topics, please contact us to schedule an appointment.
Written By Johnson Bixby