Ten Tax-Time IRS Tips to Consider

The tax filing deadline is Tuesday, April 18 this year. This is because April 15 falls on a weekend and the following Monday is a holiday in the District of Columbia. Even with an extra three days, the IRS urges taxpayers to avoid waiting until the last minute to file their taxes.
For those who have yet to file, the IRS has 10 quick ideas to help:
1. Gather Records. Good recordkeeping is important. It helps to ensure that nothing gets overlooked. Records such as receipts and cancelled checks also provide expense documentation.
2. Use IRS Online Tools. The IRS has many useful online tools. The Interactive Tax Assistant tool provides answers to many tax questions. It gives the same answers that an IRS representative would give over the phone.
3. File Electronically. Most taxpayers file electronically these days. It offers ease and convenience. The tax software guides people through the entire process. There are no forms to fill out. Electronic filing is also a more accurate way to file.
4. Use the IRS app, IRS2Go, to check the status of your refund
5. Report All Income. Taxpayers must report all of their income from Forms W-2, Wage and Tax Statements, and Forms 1099. Other income may be reportable as well, even if the taxpayer does not receive a statement.
6. Choose Direct Deposit. The fastest and safest way to a refund is to file electronically and choose Direct Deposit. The IRS issues most refunds in less than 21 days.
7. Visit IRS.gov. IRS.gov is an excellent resource. Taxpayers can click on the “Filing” icon for links to filing tips, answers to frequently asked questions and IRS forms and publications. The IRS Services Guide outlines the many ways to get help on IRS.gov.
8. Explore Filing Options. Taxpayers have many options to file. Self-prepare or use a tax preparer. Millions are eligible for free help from a Volunteer Income Tax Assistance or Tax Counseling for the Elderly site. The IRS Directory of Federal Tax Return Preparers provides information on tax professionals including their qualifications and credentials. IRS tools are available 24/7.
9. Check out IRS Publication 17, Your Federal Income Tax, is a complete tax resource. This 300-page guide is available as an eBook as well.
10. Avoid Errors. Taxpayers should take extra time to review their return to file accurately the first time. Mistakes slow down refunds. IRS e-file is the most accurate way to file as using it eliminates many common errors. Paper return filers should check all names, Social Security numbers and sign the tax return.
Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return

Tax Time Guide: Electronic Payment/Payment Agreement Options Available to Those Who Owe Taxes

WASHINGTON — The Internal Revenue Service today reminded taxpayers that it’s easier than ever to pay taxes electronically. For those unable to pay on time, several quick and easy solutions are available.
This is the seventh in a series of 10 IRS tips called the Tax Time Guide. Taxpayers can use these tips to find solutions to common tax issues as the April 18 tax deadline approaches.
Taxpayers who owe taxes can now choose among several quick and easy electronic payment options, including the following:
• Electronic Funds Withdrawal allows taxpayers to e-file and pay from their bank account when using tax preparation software or a tax professional. EFW is only available when electronically filing a tax return.
• Direct Pay. Available at IRS.gov/directpay, this free online tool allows taxpayers to securely pay their taxes directly from checking or savings accounts without any fees or preregistration. Taxpayers can schedule payments up to 30 days in advance. Those using the tool will receive instant confirmation when they submit their payment.
• Credit or Debit Card. Taxpayers can pay online, by phone or with their mobile device through any of the authorized debit and credit card processors. The processor charges a fee. The IRS doesn’t receive or charge any fees for payments made with a debit or credit card. Go to https://www.irs.gov/payments for authorized card processors and phone numbers.
• IRS2Go. The IRS2Go mobile app is free and offers taxpayers the option to make a payment with Direct Pay for free or by debit or credit card through an approved payment processor for a fee. Download IRS2Go free from Google Play, the Apple App Store or the Amazon App Store.
• Electronic Federal Tax Payment System. This free service gives taxpayers a safe and convenient way to pay individual and business taxes by phone or online. To enroll or for more information, call 800-555-4477, or visit eftps.gov.
• Cash. Taxpayers paying with cash can use the PayNearMe option. Payments are limited to $1,000 per day, and a $3.99 fee applies to each payment. The IRS urges taxpayers choosing this option to start early, because PayNearMe involves a four-step process. Initiating a payment well ahead of the tax deadline will help taxpayers avoid interest and penalty charges. The IRS offers this option in cooperation with OfficialPayments.com/fed and participating 7-Eleven stores in 34 states. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash.
Taxpayers can electronically request an extension of time to file. An extension of time to file is not an extension to pay. Taxes are still due by the original due date. Taxpayers can get an automatic extension when making a payment with Direct Pay, Electronic Federal Tax Payment System or by debit or credit card. Select “Form 4868” as the payment type to receive the automatic extension.
Taxpayers who choose to pay by check or money order should make the payment out to the “United States Treasury.” To help ensure that the payment gets credited promptly, also enclose a Form 1040-V payment voucher. Also, print on the front of the check or money order: “2016 Form 1040”; name; address; daytime phone number; and Social Security number.
Taxpayers can view their federal tax account balances online. It’s safe, secure and available on the “Finding out How Much You Owe” page on IRS.gov. They can also access payment options or apply for an installment agreement on this page.
The IRS advises taxpayers to file either an income tax return or a request for a tax-filing extension by this year’s April 18 deadline to avoid late-filing penalties. This penalty can be ten times as costly as the penalty for paying late.
Taxpayers who owe, but can’t pay the balance in full, do have options. Often they qualify for one of several relief programs, including:
• Payment Plans, Installment Agreements — Most people can set up a payment plan with the IRS online in a matter of minutes. Those who owe $50,000 or less in combined tax, penalties and interest can use the Online Payment Agreement application to set up a short-term payment plan of 120-days or less, or a monthly payment agreement for up to 72 months. With the Online Payment Agreement, no paperwork is required, there is no need to call, write or visit the IRS and qualified taxpayers can avoid the IRS filing a Notice of Federal Tax Lien unless it previously filed one. Alternatively, taxpayers can request a payment agreement by filing Form 9465. This form can be downloaded from IRS.gov and mailed along with a tax return, IRS bill or notice.
• Offer In Compromise — Some struggling taxpayers may qualify for an offer-in-compromise. This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to make a determination on their ability to pay. To help determine eligibility, use the Offer in Compromise Pre-Qualifier, a free online tool available on IRS.gov.

IRS Offers IRA Tax Tips for the 2016 Tax Year

Taxpayers often have questions about Individual Retirement Arrangements, or IRAs. Common questions include: When can a person contribute, how does an IRA impact taxes, and what are other common rules.
The IRS offers the following tax tips on IRAs:
• Age Rules. Taxpayers must be under age 70½ at the end of the tax year to contribute to a traditional IRA. There is no age limit to contribute to a Roth IRA.
• Compensation Rules. A taxpayer must have taxable compensation to contribute to an IRA. This includes income from wages and salaries and net self-employment income. It also includes tips, commissions, bonuses and alimony. If a taxpayer is married and files a joint tax return, only one spouse needs to have compensation in most cases.
• When to Contribute. Taxpayers may contribute to an IRA at any time during the year. To count for 2016, a person must contribute by the due date of their tax return. This does not include extensions. This means most people must contribute by April 18, 2017. Taxpayers who contribute between Jan. 1 and April 18 need to advise the plan sponsor of year they wish to apply the contribution (2016 or 2017).
• Contribution Limits. Generally, the most a taxpayer can contribute to their IRA for 2016 is the smaller of either their taxable compensation for the year or $5,500. If the taxpayer is 50 or older at the end of 2016, the maximum amount they may contribute increases to $6,500. If a person contributes more than these limits, an additional tax will apply. The additional tax is six percent of the excess amount contributed that is in their account at the end of the year.
• Taxability Rules. Normally taxpayers don’t pay income tax on funds in a traditional IRA until they start taking distributions from it. Qualified distributions from a Roth IRA are tax-free.
• Deductibility Rules. Taxpayers may be able to deduct some or all of their contributions to their traditional IRA. See IRS Publication 590-A.
• Saver’s Credit. A taxpayer who contributes to an IRA may also qualify for the Saver’s Credit. It can reduce a person’s taxes up to $2,000 if they file a joint return. Use Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the credit. A taxpayer may file either Form 1040A or 1040 to claim the Saver’s Credit.
• Rollovers of Retirement Plan and IRA Distributions. When taxpayers roll over a retirement plan distribution, they generally don’t pay tax on it until they withdraw it from the new plan. If they don’t roll over their distribution, it will be taxable (other than qualified Roth distributions and any amounts already taxed). The payment may also be subject to additional tax unless the taxpayer is eligible for one of the exceptions to the 10% additional tax on early distributions.
• myRA. If a taxpayer’s employer does not offer a retirement plan, they may want to consider a myRA. This is a retirement savings plan offered by the U.S. Department of the Treasury. It’s safe and affordable. Taxpayer’s may also direct deposit their entire refund or a portion of it into an existing myRA.

Winter Storm Extension: Many Businesses Have Extra Time to Request A Six-Month Extension

WASHINGTON — The Internal Revenue Service today granted many businesses affected by this week’s severe winter storm additional time to request a six-month extension to file their 2016 federal income tax returns. The IRS is providing this relief to victims and tax professionals affected by this week’s storm (known as Winter Storm Stella) that hit portions of the Northeast and Mid-Atlantic.
Business taxpayers who are unable to file their tax return by today’s due date (March 15, 2017) can request an automatic extension by filing Form 7004, available on IRS.gov, on or before March 20, 2017. Form 7004 provides a six-month extension for returns filed by partnerships (Forms 1065 and 1065B) and S corporations (Forms 1120S).
Eligible taxpayers taking advantage of this relief should write “Winter Storm Stella” on their Form 7004 extension request (if filing Form 7004 by paper). As always, the fastest and easiest way to get an extension is to file this form electronically.
The IRS will continue to monitor conditions and provide additional relief if circumstances warrant.

Mar 15, 2017 – IRS Funding Information

The IRS releases refunds each weekday throughout the year. We provide the percentage of refunds that have not yet been funded by the IRS. We update these funding statistics at approximately 2:00pm eastern each weekday throughout the year.

As of today, the estimated percentage of refunds not yet released by the IRS are:

– for returns filed 02/07 and prior, most refunds have been released by the IRS.

– for returns filed 02/08 – 02/20, approximately 10% have not yet been released by the IRS.

– for returns filed 02/21 – 02/28, approximately 15% have not yet been released by the IRS.

– for returns filed 03/01 – 03/01, approximately 25% have not yet been released by the IRS.

– for returns filed 03/02 – 03/06, approximately 35% have not yet been released by the IRS.

– for returns filed 03/07 – 03/07, approximately 40% have not yet been released by the IRS.

– for returns filed 03/08 – 03/08, approximately 60% have not yet been released by the IRS.

– for returns filed 03/09 – 03/09, approximately 95% have not yet been released by the IRS.

– for returns filed 03/10 and beyond, the IRS has released very few refunds.

    Mar 14, 2017 – IRS Funding Information

The IRS releases refunds each weekday throughout the year. We provide the percentage of refunds that have not yet been funded by the IRS. We update these funding statistics at approximately 2:00pm eastern each weekday throughout the year.

As of today, the estimated percentage of refunds not yet released by the IRS are:

– for returns filed 02/06 and prior, most refunds have been released by the IRS.

– for returns filed 02/07 – 02/20, approximately 10% have not yet been released by the IRS.

– for returns filed 02/21 – 02/28, approximately 15% have not yet been released by the IRS.

– for returns filed 03/01 – 03/01, approximately 30% have not yet been released by the IRS.

– for returns filed 03/02 – 03/05, approximately 35% have not yet been released by the IRS.

– for returns filed 03/06 – 03/07, approximately 40% have not yet been released by the IRS.

– for returns filed 03/08 – 03/08, approximately 90% have not yet been released by the IRS.

– for returns filed 03/09 and beyond, the IRS has released very few refunds.

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