Tax preparation season opened on January 23 and once again, due to a Washington DC holiday, the tax -filing deadline is April 18th, rather than April 15th, so procrastinators will have an extra three days to dawdle. For early bird filers, there is also good news: under provisions of the 2015 Protecting Americans from Tax Hikes (PATH) Act, employers are now required to file their copies of Form W-2 and certain 1099-MISC for independent contractors to the Social Security Administration, by January 31.
In terms of how to file, the IRS provides free software called “Free File” to anyone whose adjusted gross income in 2016 was $64,000 or less, or more than 70 percent of taxpayers. People who earned more than $64,000 may use Free File Fillable Forms, the electronic version of paper forms, though it’s nuts to use paper, because the error rate is about twenty percent, compared to less than one percent for electronic filing. If you’re due a refund, it will come faster if you e-file.
The IRS expects more than 153 million tax returns to be filed this year, of which more than 70 percent should receive a refund. Ninety percent of refunds should be issued in less than 21 days. But starting this year, the IRS can’t issue refunds before February 15 for those filers who claim the Earned Income Credit or the Additional Child Tax Credit. This applies to the entire refund, not just the portion associated with these credits. The extra time should help the IRS stop fraudulent refunds from being issued to identity thieves and fraudulent claims with fabricated wages and withholdings.
Scam/Fraud Alert: The IRS saw an approximate 400 percent surge in phishing and malware incidents in the 2016 tax season, which is why it is important to underscore these security reminders:
- The IRS does not initiate contact with taxpayers by email or through social channels to request personal or financial information. The agency is aware of email phishing scams that appear to be from the IRS and include a link to a bogus web site intended to mirror the official IRS web site. These emails contain the direction “you are to update your IRS e-file immediately.” The emails mention USA.gov and IRSgov (without a dot between "IRS" and "gov"). Don’t get scammed. These emails are not from the IRS. If you get a message that looks suspicious, do not respond to the email or click on the links. Instead, forward it to the IRS at email@example.com.
- The IRS will never call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
- The IRS does not threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
- The IRS does not demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owes and never asks for credit or debit card numbers over the phone.
Examples of recent tax scams include:
- Fake IRS tax bills related to the Affordable Care Act, which involves a fraudulent version of CP2000 notices for tax year 2015.
- Telephone scammers targeting students and parents demanding payments for non-existent taxes, such as the “federal student tax.”
- “Robo-calls” where scammers leave urgent callback requests through the phone telling taxpayers to call back to settle their “tax bill.” In the latest trend, IRS impersonators demand payments on iTunes and other gift cards.