As on August 31, 2016, IRS issued warning of 2017 tax refund delays for certain taxpayers and urged them to adjust their withholding tax for now. This is about Tax Return 2016 that will be done in April 15,2017.
A tax return starts with identification part and rest is divided is further into three main sections which are income, deductions and credit. These sections are of critical nature of course. The return is simple but depending upon the types of income you have, you can attach several schedules to the return.
Income Section : Salaries, dividends, interests along with other incomes received are to reported.
Deductions : It is tax payer specific. Some of the typical deductions include Contributions to retirement savings plans, expenses for businesses and so on.
Credits : Tax credits are attributed for dependent children, educations, old age pensions and many more. Tax credit amount is subtracted from the tax payable amount .
Tax Liability : Taxable event gives rise to creation of tax which is called tax liability. Tax Liability and Tax Payable are two different things. Tax Liability is adjusted for tax credits and other items to arrive at tax payable.
Things to Know :
The following are things to be known if you have taxes to pay :
- Tax refunds are likely issued within 21 calendar days.
- IRS offers free File Software available only to those having annual income of less than $62000. If the annual income is above $62000, it offers Free File Fillable Forms, which is helpful if you know to do taxes by yourself.
- Obamacare penalties are high. Do visit healthcare.gov or consult a tax professional if in doubt.
- Chances of Audit are very likely if you are wealthy ($200000 and above annual income) and live abroad.
- FATCA requires IRS to share information with agreed countries for US tax payers who hold financial assets of at least $50,000.
- It is advised due to high pressure in filing tax returns during last days, that you gather documents and sent it to your tax professional as early as possible.
- If you have income outside of wages and salaries, you need to pay estimated taxes in quarterly installments (You do not have to make such quarterly arrangement if estimated tax due after subtracting withholding tax and credits is less than $1000).
- The employees are advised to receive W-2 from employers they worked during the tax year by the deadline date of 31st January, 2017. If they do not receive them , they are advised to contact their payroll departments and ask them to resend their tax documents before this date.
- Do not worry if you cannot file the tax return by April 17,2017. You can easily apply for extension requests. The downside is you have to pay interest for the late payment unless you show that you have already paid at least 90 % of tax liability or show reasonable cause.
When does the IRS start accepting tax return 2016?
When the time comes for starting to file tax returns, there are probably few questions like
- What amount of taxes are to be paid?
- How it is to be calculated?
- What deductions are to be taken?
- When is the return be filed.
While the first three questions are person specific and professionals are generally hired, the last question is what we are inclined to provide information about. Apart from deadlines mentioned, the most important thing to note down is that you can file tax return immediately after the beginning of the year, but IRS will not process the same or any other returns until IRS e-file goes live. As per the past dates and various sources, we are able to frame the table below which shows the proposed deadlines for Tax return 2016:
|January 1, 2017||It is the first day to file Tax Return 2016. However , processing will be done only when the e-file goes live as per the below date.|
|January 19, 2017||IRS e-file goes live on this date and starts processing the electronic tax returns. Paper tax returns also begins to be processed from this date.|
|January 31, 2017||This is the date by which employees receive W-2 from the employers for work done during the corresponding tax year.|
|February 1, 2017||It is the deadline date for 1099 statements. 1099 forms are for incomes from other sources such as Non-employee compensation, bank interest, dividends, independent contractors income,etc|
|February 16, 2017||By this date, financial institutions should have mailed Form 1099.|
|April 17, 2017*||It is also called the Tax Day. It is the last day for filing federal income tax returns and extension requests. It is also the last day for filing state income tax returns and extension requests. The dates may fluctuate by 1-2 days for various states. By this date, contribution to health saving account, 401 (k) or SEP shall be made. If you cannot file by this date, you have the option to obtain automatic 6-month filing extension through Form 4868.|
|June 15, 2017||US citizens or resident aliens living abroad must file tax returns by this date. They also have the option to file for 4-months extension in case they do not file the return timely.|
|June 30, 2017||Foreign Bank Account Report (FACTA) forms are due for taxpayers by this date if they over $10,000 in total in foreign bank accounts in the previous year. No extensions are allowed for these forms and e-filing is mandatory.|
|October 15, 2017||If you made the extension request by April 17,2017 as mentioned earlier, this would be the last day of filing within the extension.|
|April 15 , 2020||File amended tax return 2016. There is deadline of 3 years from the original due date i.e. April 17, 2017 to claim any tax refund.|
*April 15 is Saturday. So, the date is shifted to April 17,2017.
When the tax returns are accepted by IRS, it processes the refund if applicable. Exact refund dates are pre-defined by IRS. Federal refund is generally received between 8-21 days provided the tax return is filed and processed orderly. However, Rule of thumb of getting state tax return is upto 30 days from the date of filing the return.
Tax King Inc is Bookkeeping Services provider to offer services in Taxes handling also. We are ready for you to do it before deadline.