Tax Season 2015

calendarIs there such a thing as GOOD NEWS from the Internal Revenue Service?
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Tax season used to begin with a vengeance on the second Friday of January. Tax season was delayed the last two years until the end of January. Congress waited until January to decide to extend certain deductions and tax credits.  Their delay to act caused a backlog in tax form programming at the Internal Revenue Service.

This year the IRS has announced Electronic Filing of tax returns will begin January 20th. Now that is not a Friday, it’s a Tuesday. Why Tuesday? The reason is because Monday, January 19th, 2015 is Martin Luther King Day.

The first returns to be filed are usually for people who have already received their W2 forms. Wait for all of your W2s if you worked for more than one employer.

Some tax offices still provide a way for taxpayers to get a quick advance of their refund in the form of some kind of bank product. These bank products come at a price, but most people who want this fast refund are taking advantage of what can be called some kind of ” free” money.  This free money usually comes from the Earned Income Tax Credit or the Child Tax Credit. These credits are refundable credits. Taxpayers who are able to claim these credits might have a low or even zero income tax liability. They get a refund of more than the amount of taxes they had withheld to pay their income tax. That is why they are called refundable credits.

Because these credits are like free money from the government, some taxpayers are willing to give up some of this free money to pay the cost to get their money quickly. This is not instant cash. It used to be as fast as one or two days. I am not as “up to date” on this information as I once was because my office no longer offers refund anticipation loans.  I can tell you that if you have your own bank account, you can have your refund deposited directly to that bank account. This direct deposit used to be as quick as ten days depending on which day you filed your return. The IRS is depositing refunds quickly these days.
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Electronic filing, or e-filing, has made such a difference in the processing of tax returns by the IRS. I use professional software to help me prepare accurate  tax returns. Tax returns are prepared with fewer errors. They are sent, or filed,  electronically to the IRS. The IRS is not keying in data from a paper return that was mailed in, so the IRS makes fewer errors in the processing of the tax return. All this is good news for you.

Even better news for 2015 is that the IRS will be accepting electronically tax returns for 2014, 2013 AND 2012. We can file late, or delinquent, tax returns electronically. They do not have to be mailed as in the past. Some of the more complex returns still have to be mailed. We do still have to mail in amended tax returns. We are making progress with technology. Just like the tax laws, things change.

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