If you search the IRS website for tax forms, you’ll get over 900 results. Here are the ones you need to know.
Walbert Castillo, Ramon Padilla, Karl Gelles, USA TODAY
Forget everything you learned about tax reform — at least temporarily. Most of the prior rules involving deductions and other issues will stay in force for one more year.
Only a couple tax-reform measures enacted in December will affect individuals filing 2017 returns in coming weeks and months, says researcher Wolters Kluwer. Here’s a look at those changes and other provisions of note, including some pertaining to the upcoming tax-return filing season:
The main reform change that will apply to some taxpayers this filing season is a more favorable rule for people who incurred large medical expenses last year or this year.
Taxpayers who itemize will be able to deduct medical costs above 7.5 percent of adjusted gross income in 2017 and 2018, before the threshold climbs to 10 percent in 2019. (In Arizona, medical expenses remain fully deductible on state returns for individuals who itemize.)
Another reform change affects people who took out or take out a new mortgage after Dec. 15, 2017. After that date, interest may be deducted on up to $750,000 in mortgage debt, down from a prior mortgage interest cap of $1 million in debt.
Many Americans also are starting to notice another impact of reform, though not one tied directly to the filing of returns: Paychecks now are beginning to show different withholding amounts. The IRS unveiled the new withholding rules in early January and wants employers to start using them no later than mid-February.
The Internal Revenue Service began accepting returns Jan. 29, and the agency expects 155 million individuals will file this year.
Returns will be due April 17, as the normal April 15 deadline falls on a weekend and federal offices will be closed April 16 for Emancipation Day, a legal holiday in Washington, D.C.
Taxpayers may receive an automatic six-month extension, taking their return deadlines to Oct. 15. If seeking an extension, you should submit IRS Form 4868. However, filing for and receiving an extension doesn’t lengthen the time to pay any taxes due.
The IRS said it expects to issue the vast majority of refunds within 21 days of receiving a completed individual return. However, refunds on returns claiming the Earned Income Tax Credit or Additional Child Tax Credit won’t be issued before mid-February.
In 2016, taxpayers who were owed refunds received an average payment of nearly $2,900.
Most taxpayers — around 70 percent, according to the IRS — are eligible to file their returns with the use of free software. The free-filing option is available to individuals or families with incomes of up to $66,000.
Look for the “free file” link at irs.gov to get the process rolling.
Each software company participating in the program has different requirements — some won’t allow free filing of state returns, for example, and others have an income cutoff below $66,000.
Participating software providers include H&R Block, TurboTax and TaxSlayer. Some 23 states, including Arizona, allow their state-tax returns to be filed for free, using at least some software providers.
IRAs still deductible
Tax reform mostly left retirement plans alone. This means one of the few ways to lower last year’s taxes, retroactively, remains in play. Many Americans may continue to invest in a traditional Individual Retirement Account and get a deduction. Contributions can be made as late as April 17, 2018, and deductions still taken on 2017 returns.
IRA-eligibility rules are a bit tricky, and the deduction benefit phases out for higher-income individuals who also have a retirement plan at work. But assuming you have a 401(k) or other workplace plan, you can get at least a partial IRA deduction if your income is below $72,000 (singles) or $119,000 (married couples).
For people lacking retirement coverage at work, IRA deductions can be taken regardless of income. If you lack workplace retirement coverage but your spouse has it, a partial deduction is available on up to $196,000 in income.
You may invest up to $5,500 in an IRA each year ($6,500 if you’re 50 or older), assuming you have at least that much in taxable compensation.
One big tax scam this year isn’t targeted to individuals, but rather employers.
The IRS has been alerting payroll departments about how to avoid being tricked into divulging sensitive employee information to cybercriminals. Last year, at least 200 organizations fell victim to this W-2 phishing scam, imperiling thousands of employees, the IRS said.
Here’s how the scam works: Criminals, posing as chief financial officers or other senior managers at a company or non-profit group, send emails to payroll staff at that entity requesting employee W-2 files. Criminals first read up on key executives to make the emails more believable in hopes of tricking payroll officers.
Sensitive W-2 information includes employee names, Social Security numbers, income and withholding amounts.
Passports in peril
The IRS in late January began implementing its “passport certification” program by notifying the State Department of individuals with seriously delinquent tax debts of $51,000 and up, including interest and penalties.
The effort could result in passports being denied or revoked for these taxpayers.
However, National Taxpayer Advocate Nina Olson issued a report complaining that the IRS isn’t notifying affected taxpayers prior to certifying their debts to the State Department, which she said could infringe on constitutional due-process protections.
Taxpayers can remedy the situation by paying outstanding tax debts or by entering into payment agreements with the IRS.
Arizona data online
Arizona taxpayers can confirm their prior-year state-tax refund by going to the Department of Revenue’s website and downloading Form 1099-G. Taxpayers will want to click on “View my 1099-G” at www.AZTaxes.gov.
Taxpayers lacking internet access can request their Form 1099-G by contacting the department at 602-255-3381 or 800-352-4090. The department has a dedicated email address, 1099G@azdor.gov, to handle additional questions.
About 3.3 million individual Arizona returns were filed in 2016.
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