What To Know For Tax Season 2017

Posted on Posted in Tax Laws

What should you know for this year’s upcoming tax season?

1. New Filing Date

Generally, taxes are due on April 15, but this year the deadline has changed because April 15 falls on a Saturday. This was normally push the deadline to Monday, April 17, but that is Emancipation Day, a holiday in Washington, DC.

Therefore, the deadline to file returns is April 18.

2. Delay on Refunds

New newly established law by delay refunds for low to moderate income taxpayers who file early.

The Protecting Americans from Tax Hikes Act, known as the PATH Act, requires the IRS to withhold refunds on tax returns claiming either the Earned Income Tax Credit or the Additional Child Tax Credit until mid-February. The change is designed to give the IRS more time to investigate in order to prevent tax fraud.

The affected refunds will start being released on February 15, but they may not show in bank accounts until the week of February 27, as it will take more time for financial institutions to accept and deposit the refunds. T

The three day holiday weekend involving President’s Day on February 20 may also affect the timing of when funds are available.

Regardless, the IRS said it still anticipates issuing more than nine out of 10 refunds in less than 21 days. Taxpayers can use the “Where’s My Refund?” tool on the IRS website and the IRS2Go phone app to find projected deposit dates for early EITC and ACTC refund filers a few days after February 15.

3. Identification Numbers

The PATH Act also requires that certain individual taxpayers renew their identification numbers.
Any ITIN that has not been used on a tax return at least once in the past three years, as well as any ITIN with middle digits of 78 or 79, must be renewed. A return will not be processed until this is renewed.

Anyone filing a tax return with an expired ITIN could experience delays and a denial of some tax benefits until the number is renewed. Keep in mind, an ITIN renewal application could take up to 11 weeks to process during the tax filing season.
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.

4. Healthcare Coverage Changes

Limits have increased, and continue to increase, for tax-deferred Medical Savings Accounts (MSAs) for the self-employed. The maximum deductible amount for out-of-pocket expenses for self-only coverage ($4,500), the deductible limit on a plan with family coverage ($6,750), and the minimum deductible amount for annual family coverage ($4,500) have all increased by $50. The limit on out-of-pocket medical expenses under family coverage ($8,250) increased by $100.