Federal Tax Return 2018 Filing Season

Posted on February 8, 2018

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By Fred Pfeil

It’s that time of year again, Tax Filing Season!   The IRS has announced that they will be accepting tax returns beginning on January 29, 2018.  The tax deadline has been extended from its normal April 15th deadline until Tuesday, April 17, 2018 due to the fact that April 15th falls on a Sunday and Monday is Emancipation day – a holiday in Washington D.C.  Two more days of procrastination!

Free File

The federal government has again teamed up with commercial tax software providers to offer Free File, which allows qualifying taxpayer to prepare their own returns using the software free of charge.   To qualify, the taxpayer’s income must be $66,000.00 or less.   It is estimated that approximately 100 million taxpayers, or 70% of the nation’s taxpayers, qualify for Free File.   In addition to that, Volunteer Income Tax Assistance (VITA) locations are available throughout the nation to prepare tax returns for qualifying taxpayers.

EITC and ACTC

By law, the IRS will not begin issuing refunds in which the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) is/are claimed until February 27, 2018.  The IRS will hold the taxpayer’s entire refund in an effort to curb tax fraud which has plagued the IRS.  Preparer fraud is on the rise.  In 2017, our Low Income Tax Credit (LITC) clinic has seen a substantial increase in preparer fraud cases.  The IRS has tools available to assist taxpayers in choosing a reputable tax return preparer, including the ability to research a licensed preparer’s qualifications on their website – IRS.gov.

Identity Theft

The IRS has created an entire division to assist with identity theft issues.   The IRS warns that it will not contact a taxpayer by telephone, unless the taxpayer has contacted the IRS first, and/or received a notice by U.S. mail.  The IRS will never ask for credit card/debit card or bank account information over the telephone.  However, the IRS in 2017 launched its private collection agency (PCA) program, which allows private collection agents to contact taxpayers in an effort to collect a past tax debt.  There are currently four (4) agencies allowed to collect on the IRS’ behalf.  CBE (Waterloo, IA), ConServe (Fairport, NY), Performant (Pleasanton, CA), and Pioneer (Horseheads, NY) are the only agencies which have been approved to collect on behalf of the IRS.   Prior to contacting a taxpayer, the IRS will send a letter to the taxpayer informing them that the IRS has sent their account to a PCA, and that they will also receive a letter from the PCA prior to telephone contact.   A taxpayer can request, in writing, that the PCA return their account back to the IRS.

Tax Reform

The current administration has overhauled the federal income tax laws for tax year 2018.  Some of you may be wondering, where is this massive tax reduction, I have not seen it in my paycheck?  Rest assured, you should be seeing the benefits of the tax reduction by the end of February.  The IRS has just released its new withholding tables – IRS Notice 1036, which is available on IRS.gov.  Employers have to implement the new withholding tables no later than February 15, 2018.  You should complete a new IRS form W-4, Employee’s Withholding Allowance Certificate, and provide the completed form to your employer each year.   Your current W-4 is valid until February 15, 2018; however, the IRS has not released the 2018 Form W-4 as of January 22, 2018.  The new withholding table released by the IRS takes into account withholding reported on your prior W-4, so there is no need to panic if the IRS does not release the new Form W-4 prior to the February 15, 2018 expiration date.   Once the IRS issues the updated Form W-4, you should complete and submit the W-4 with your employer.

If you have any federal income tax issues, please apply for our services by calling our intake office at 1-(888) 346-5592, or online here.

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