If you still haven’t filed, then you’re among the minority. As of the end of last week, the IRS had received nearly 100 million tax returns — roughly three-quarters of the returns it expects to get this tax season.
For procrastinators who are owed a refund, it won’t hurt to file late. Penalties are only incurred if you owe tax. But it’s still a good idea to file for an extension, just in case you end up being wrong and actually owe money.
So far this tax season, about 12 million taxpayers have requested extensions.
Related: Don’t miss these Tax Day deals
The average refund is $2,792, up 1% from last year, and people are using them for everything from hosting a crawfish boil to paying off student loans.
But because your refund may be one of the biggest checks you may receive all year, be careful to protect your identity. Scammers are also on the prowl during tax season, and the IRS has issued an alert about a new phone scam where IRS impersonators are calling taxpayers and asking for personal information or demanding that they pay back taxes.
The IRS has also warned taxpayers to watch out for fake charities, emails from IRS impersonators and shady tax preparers who do things like claim bogus children or convince you to hide income offshore.
Related: 10 tax audit red flags
The recently discovered Heartbleed bug, a security flaw that exposes Internet users’ passwords, has also raised questions about whether it’s safe to file online, though the IRS says taxpayers should ignore the bug and still file their taxes.
If you want to be extra safe, you can file the old-fashioned way — by snail mail. Although the vast majority of filers prefer to file online, with nearly 90% of all returns submitted electronically this year.
Another thing to watch out for:audit red flags. While the chance of being audited is less than 1% on average, certain actions are more likely to spark scrutiny from the IRS. Common triggers include overstating your charitable donations, being a millionaire, and claiming the Earned Income Tax Credit — a commonly abused credit.
Related: 13 crazy tax deductions
Don’t give Uncle Sam a 0% loan
Claiming strange deductions will also raise eyebrows. Some of the weird write-offs that have failed over the years include airfare for a pet, a birthday party, and pantyhose. But others are perfectly acceptable, even though they may sound bizarre. Hermit crab food, scuba trips and Viagra for a woman were all given the green light by the IRS.
You can even claim a boyfriend or girlfriend as a tax break, but your significant other will have to earn less than $3,900, live with you year-round and you must pay for more than half of their expenses.
Once you’ve filed, relax and celebrate with any one of dozens of Tax Day deals, including free cookies, curly fries, massages and paper shredding.
February 6th, 2014, 12:00A.M. the I.R.S. sent out thousands of tax payments to individuals who filed before January 31st, 2014. Some individuals who filed before January 31st, 2014 were not included in this due to the overflow of individuals who submitted their returns. Those individuals should watch the Where’s My Refund page and expect a payout on the next payout day being “on or before February 13th, 2014.”
Also a very important note: “if your payment was sent to like turbotax type where it has to go through another bank to take out fees then you have to wait until that bank opens and they will process them. Some banks are not open yet so check your accounts later this morning or afternoon.”
Please reply to this post when you submitted, were accepted, approved, and if you received your refund last night.
I.R.S. have finally updated their Where’s My Refund tool. They will be unloading millions of dollars over the next few days to taxpayers.
We have received news that the I.R.S. updated their Where’s My Refund webpage last night at 12 A.M.. Thousands of people have their Direct Deposit date sets to “on or before February 6th, 2014″. This means that the February 5th payout date is still correct. They will send the funds to the bank on Monday and the funds will be set to be direct deposited on Wednesday February 5th 2014. This will give your bank time to handle the huge load of all of the transfer they receive of millions of dollars over a day period.
Please check the I.R.S. Where’s My Refund webpage and then be watching your bank account for the direct deposit. We strive to keep our schedule as accurate as possible and hope that you have enjoyed reading.
We are compiling a list of refund dates for 2014, so please visit this post and comment when you were accepted versus when you actually received your refund. Please like us on Facebook, follow us on Twitter, tell your friends about us.
Today is the official start to the I.R.S. 2013 Tax Season. We want to compile a list of payments dates for our users to see to better help them determine the date that they will get their refund. So we pose the question, “When did you get your refund 2014?”
We would like everyone to reply to this post with the date that their refund was accepted and the date that I.R.S. has set for their direct deposit or check. To find out this date, you will need to visit the I.R.S. Where’s My Refund webpage.
Optionally, we would also like you to post the date that your state refund, what state, and when your state finance department gives your refund date. To find out this, visit our Where’s My State Refund page.
Please comment below with Federal Acceptance Date, Federal Payout Date, (optional) State Acceptance Date, State, and State Acceptance Date.
The Internal Revenue Service begun accepting returns January 24th, 2014.
We have received hundreds of reports that the I.R.S. has been accepting tax returns before January 31st, 2014. It seems that they have started accepting select few income tax returns on January 24th 2014. We contacted the I.R.S. on that day and were told that to help with the case load, they have accepted some returns early. They plan is to accept returns all next week that meet very strict rules. We have adjusted our 2014 IRS E-File Cycle Chart to match with the reports that we have received. Continue reading →
Taxpayers who want to take advantage of the Internal Revenue Service’s free tax preparation e-filing program won’t have to wait. The Free File program opens to taxpayers on Jan. 17, two weeks before the IRS starts processing 2013 tax returns.
The IRS will not start processing any tax returns until Jan. 31. The government shutdown in October 2013 slowed IRS updates of forms and tests of its computer systems, leading officials to push the official opening of this year’s filing season to the end of the month.
But that doesn’t mean taxpayers have to sit around. Free File companies will hold taxpayers’ completed tax returns and then submit them on Jan. 31.
The early opening of Free File is good news for millions of eligible taxpayers. They are among the group of electronic filers, which increases every year, primarily because they can get their refunds more quickly.
And for the 2014 filing season, a few more taxpayers should be able to use the Free File option. The income eligibility limit has been increased to $58,000. That’s $1,000 more than last year.
Free File 2014 basics
You can file your 2013 tax return through Free File if your adjusted gross income is $58,000 or less.
The income cutoff applies regardless of your filing status.
Free File is for individual, not business, tax returns. However, a sole proprietor who files Schedule C with Form 1040 can use Free File.
Some participating Free File vendors also offer free state tax return preparation and e-file.
Some Free File companies offer free electronic extensions. But remember, you still must pay any taxes due by the April 15 deadline or you’ll be charged interest and possibly penalties on any tax you owe.
You do not download anything. All of the software, which is encrypted to protect privacy, remains at the Free File company website you select, and your return is filed from there.
Access Free File by going to IRS.gov and clicking on the Free File icon. Beware of offers by outside websites to take you to the Free File website, as they could be scams operated by identity thieves.
The Free File program is a partnership between the IRS and the Free File Alliance, a group of tax preparation software manufacturers. Fourteen companies are expected to participate in the program this filing season.
“All the (2014 filing season tax software companies) have done it before. We have experienced providers within the commercial world and the Free File world,” says Tim Hugo, executive director of the Clifton, Va.-based Free File Alliance.
Free File was created in 2003 as a way to get more people to e-file. Its target is taxpayers who might otherwise not e-file because they don’t want or can’t afford to pay the cost of the computer filing programs or professional tax help.
The key qualification for Free File services is income. This year, taxpayers with adjusted gross income of $58,000 or less, regardless of filing status, can use the online program.
Participating tax software companies can establish other eligibility requirements. Some may limit usage of their programs based on geographic location, military service or other criteria.
To determine which software best fits your filing needs, the Free File website includes an online search tool to help you select one of the participating Free File companies.
Free File contributions to e-filing
In 2013, almost 144 million tax returns were filed electronically, according to IRS data complete through May 2013. That represents a nearly 2% increase in e-filed returns over the previous year. The sector that showed the most growth last year, according to IRS statistics, was tax returns prepared and filed by taxpayers on their own.
Around 3 million of those self-prepared returns e-filed last year came through Free File, says Hugo. That number has held steady for the past few years.
Three million of those returns e-filed last year came through Free File, says Tim Hugo, executive director of the Clifton, Va.-based Free File Alliance.
“We would love to have more,” says Hugo, but he points to the program’s overall contribution to e-filing. Since its inception, says Hugo, Free File has accounted for the submission of more than 40 million federal returns.
“We get people in the door for e-filing, people who’ve never e-filed before,” says Hugo. “They may go to a commercial product later on, but they will continue to e-file. We are very pleased with that.”
Hugo says the program also has evolved to meet taxpayer needs. “We look at Free File as a three-legged stool,” he says. “There is the traditional Free File, fillable forms and VITA providing services to every income.”
Working with VITA
The filing needs of lower-income taxpayers are addressed through Free File’s continuing partnership with the federal Volunteer Income Tax Assistance program, popularly known as VITA.
VITA tax-filing clinics are set up each year in public places — from libraries to community centers to shopping malls. Its volunteers provide free filing assistance to low- and moderate-income taxpayers who might not be able to afford tax software or professional filing help. This filing season, the services of IRS-certified VITA volunteers are available to people who make $52,000 or less.
Hugo says Free File is again placing kiosks, similar to self-checkout stations in retail stores, at VITA sites nationwide.
“You can do your return there or partially do your return and, if you need help, ask a VITA volunteer,” says Hugo. “This helps some of those who are most in need of tax help.”
The IRS has an online search tool to help taxpayers locate a nearby VITA site. Taxpayers also can call (800) 906-9887 for VITA locations.
Free fillable forms remain
The IRS says that Free File is available to 70% of taxpayers. But if you are among the 30% making too much money to use the service, you still can file for free using the tax agency’s fillable federal return form option.
Here, online versions of the most commonly used IRS tax forms are available through the Free File page. You fill them out on your computer and then e-file the documents at no charge.
Just don’t mistake the forms for tax software.
The fillable forms offer only basic calculations of what’s entered on the form. And you must figure out what goes on the form without the online prompting found in software.
Also, the information is not automatically transferred to associated forms. That means you must, for example, manually enter your itemized deductions total from Schedule A to the appropriate line on Form 1040.
Still, taxpayers with relatively simple filing needs who don’t want to buy tax software might find fillable forms a welcome alternative.
Note, however, that you’ll have to wait a bit longer to use the free fillable forms option. They won’t be available until Jan. 31, the same day that the IRS opens its filing doors to all taxpayers.
*These are only estimates, the I.R.S. has refused to give exact dates to new audit process. There are no guarantees with the I.R.S this year, but one thing is for sure. The earlier you file, the earlier you will receive a return. Contact us today for more details and to schedule your early tax appointment.
The U.S. Internal Revenue Service delayed the start of the tax-filing season for one to two weeks, citing the recent 16-day federal government shutdown.
The IRS, which had been scheduled to open filing Jan. 21, 2014, will now begin accepting returns for tax year 2013 as early as Jan. 28. The agency will make a final decision on the date in December, according to a statement today.
“Readying our systems to handle the tax season is an intricate, detailed process, and we must take the time to get it right,” Danny Werfel, the acting IRS commissioner, said in the statement.
This is the second year in a row that the IRS has postponed the filing season. Returns for 2012 were accepted starting on Jan. 30 after Congress delayed setting some tax policies.
“Considering the IRS has dealt with much larger changes on far shorter notice over the past years without delay, its reasons are suspect,” Sarah Swinehart, a spokeswoman for the Republican-led House Ways and Means Committee, said in an e-mail.
The IRS furloughed more than 90 percent of its employees during the shutdown, which began Oct. 1 when Congress was unable to pass a spending bill and ended after midnight Oct. 17.
“This is yet another unfortunate effect of a shutdown that Republicans should have never caused,” Representative Sander Levin of Michigan, the top Democrat on the Ways and Means Committee, said in a statement. “This tax-filing delay just adds insult to injury for Americans hoping to get a jump-start on their tax refunds in January.”
The delay won’t alter the April 15 deadline for taxpayers to file their returns or seek extensions.
At the start of the filing season, the IRS largely issues refunds to taxpayers who file as soon as they can. This year, the IRS issued $135 billion in refunds from Jan. 30 to March 1. That’s more than was paid from March 2 to May 10, when the agency received 50 percent more returns.
Delaying refunds could have an additional consequence in 2014. The U.S. debt limit is suspended through Feb. 7, and changes in the government’s projected spending after that date will affect the timing of how long the Treasury Department’s extraordinary measures to prevent a default will last.
Because the government may issue more refunds after Feb. 7 than previously anticipated, a potential lapse in borrowing authority could come a few days sooner than projected, said Loren Adler, research director at the Committee for a Responsible Federal Budget in Washington.
The delayed start of tax-filing season probably will create a backlog of potential returns for the start date, rather than delaying all returns equally.
“Those are folks who are trying to do this as soon as their books are in order,” Adler said.
The Bipartisan Policy Center projects that the U.S. will run out of borrowing authority between the end of February and mid-March 2014.
The October 15th Deadline Remains in Effect for Taxpayers Who Requested a Six-month Extension to File Tax Return.
Just because IRS employees are not available to answer phones or issue refunds, due to the current lapse in federal appropriations does not mean filing deadlines and payment due dates can be delayed. IRS warns all taxpayers of the continuing requirement to meet their tax obligations as normal. Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as required by law.
Many of the more than 12 million individuals who requested an automatic six-month extension earlier this year have yet to file their Form 1040 for 2012. Though Oct. 15 is the last day for most people to file, some groups still have more time, including members of the military and others serving in Afghanistan or other combat zone localities who typically have until at least 180 days after they leave the combat zone to both file returns and pay any taxes due. People with extensions in parts of Colorado affected by severe storms, flooding, landslides and mudslides also have more time, until Dec. 2, 2013, to file and pay.
The IRS offered several reminders for taxpayers during the current appropriations lapse:
Taxpayers are encouraged to file their returns electronically using IRS e-file or the Free File system to reduce the chance of errors.
Taxpayers can file their tax returns electronically or on paper. Payments accompanying paper and e-filed tax returns will be accepted and processed as the IRS receives them. Tax refunds will not be issued until normal government operations resume.
IRS operations are limited during the appropriations lapse, with live assistors on the phones and at Taxpayer Assistance Centers unavailable. However,www.IRS.gov and most automated toll-free telephone applications remain operational.
Tax software companies, tax practitioners and Free File remain available to assist with taxes during this period.
E-file Now – The IRS urged taxpayers to choose the speed and convenience of electronic filing. IRS e-file is fast, accurate and secure, making it an ideal option for those rushing to meet the Oct. 15 deadline. The tax agency verifies receipt of an e-filed return, and people who file electronically make fewer mistakes too. Of the nearly 141.6 million returns received by the IRS so far this year, 83.5 percent or just over 118.2 million have been e-filed.
Anyone expecting a refund can get it sooner by choosing direct deposit. Taxpayers can choose to have their refunds deposited into as many as three accounts. See Form 8888 for details.
Payment Options – Taxpayers can e-pay what they owe, either online or by phone, through the Electronic Federal Tax Payment System (EFTPS), by electronic funds withdrawal or with a credit or debit card. There is no IRS fee for any of these services, but for debit and credit card payments only, the private-sector card processors do charge a convenience fee. For those who itemize their deductions, these fees can be claimed on next year’s Schedule A Line 23. Those who choose to pay by check or money order should make the payment out to the “United States Treasury”.
Taxpayers must be sure to file their return by Oct. 15, even if they can’t pay the full amount due. Doing so will avoid the late-filing penalty, normally five percent per month, that would otherwise apply to any unpaid balance after Oct. 15. However, interest, currently at the rate of 3 percent per year compounded daily, and late-payment penalties, normally 0.5 percent per month, will continue to accrue.
Inflation often makes consumers worry. Nobody wants prices to go up – and that tends to be our gut reaction when we hear about inflation. But sometimes, a little inflation can be a good thing (no, I’m not channeling Janet Yellen).
When it comes to taxes, the Tax Code provides for mandatory annual adjustments to certain tax items based on inflation. And, according to CCH, part of Wolters Kluwer and a leading global provider of tax, accounting and audit information, software and services, that’s going to result in savings – albeit modest – for most taxpayers. George Jones, a Senior Federal Tax Analyst at CCH, explains:
Most taxpayers benefit from inflation adjustments since the adjustments tend to preserve the value of most, but not all, of the dollar-based benefits under the Tax Code year after year.
Of those tax items subject to mandatory annual adjustments, federal income tax brackets tend to get the most attention. They have been subject to adjustment for nearly 30 years. However, it certainly didn’t stop there: inflation adjustments are now routinely included in new tax legislation. Which tax items are subject to adjustment – and how much – can be confusing for taxpayers. Luckily, there are tax professionals out there who can sort it all out for you.
Leading the pack, this week, Wolters Kluwer, CCH released estimates for the 2014 tax brackets and other tax items affected by inflation, such as the personal exemption and the standard deduction. Their predictions indicate that most taxpayers will end up with a few more dollars in their pockets.
With respect to the adjusted tax rates, here’s how the savings might shake out: a married couple filing jointly with a total taxable income of $100,000 should pay $145 less income taxes in 2014 than in 2013 and a single filer with taxable income of $50,000 should owe $72.50 less next year.
Estimated 2014 Tax Brackets, Courtesy of Wolters Kluwer, CCH
It gets better. Standard deduction and personal exemption amounts will be slightly higher in 2014, as will income ceilings for tax benefits such as education credits, individual retirement account (IRA) contributions and more.
The standard deduction for single taxpayers, heads of households and married couples filing jointly will all show increases for 2014, by $100, $150 and $200, respectively. The standard deduction for joint filers, for example, would rise from $12,200 to $12,400 in 2014. What this means for taxpayers is lower taxes: increases in the standard deduction decrease taxable income which means lower taxes.
The additional standard deduction for those age 65 or older or who are blind will stay at $1,200 level for 2014 for married individuals and surviving spouses but will increase to $1,550 for single aged 65 or older or blind filers.
2014 Standard Deduction Estimates, courtesy of Wolters Kluwer, CCH
The personal exemption amount gets bumped up by inflation by $50, to $3,950 in 2014 after having increased $100 between 2012 and 2013. The personal exemption phaseout (PEP) still applies: the 2014 phase out range for personal exemptions begins at $305,050 for joint filers and $254,200 for single filers. The same income ranges apply to the phase-out of itemized deductions; those limitations are called Pease limitations, named after former Rep. Don Pease (D-OH).
The PEP and Pease limits were slated to be reduced beginning in 2006 and eliminated in 2010; as with the other tax cuts, the elimination was extended through the end of 2012. The limitations were brought back in 2013 at the original thresholds, indexed for inflation. The result of those changes is basically an increase in the top marginal tax rates.
And it’s not just income tax that will see changes: the federal gift tax annual exclusion – how much a donor can gift to any number of persons in one year without being subject to federal gift tax – will remain at $14,000. In contrast, the estate and gift tax applicable exemption – the amount that you can give away during your lifetime or bequest at your death without being subject to federal estate tax – will rise from $5,250,000 in 2013 to $5,340,000 for 2014. With the new portability provisions, the federal estate-tax exclusion can be shared between a husband and wife, making the total that can pass with no federal estate and gift tax payable effectively $10,680,000 for 2014.
And this year, there’s a new kid in town when it comes to inflation: the alternative minimum tax (AMT). In years past, the AMT was subject to a last minute scramble by Congress to “patch” the exemption. This year, things are different. As part of the American Taxpayer Relief Act of 2012 (ATRA), signed into law on January 2, 2013, the AMT will be permanently adjusted for inflation. This was such a big deal that, when I reported it in January, I put it in red. Before this year, Congress hadn’t touched the AMT, other than to patch it, in more than 40 years.
For 2014, Wolters Kluwer, CCH projects that the AMT exemption for married joint filers and surviving spouses will be adjusted upward to $82,100, up from $80,800 in 2013. For unmarried single filers, the 2014 exemption will be $52,800, up from $51,900 in 2013; and for heads of household, the exemption will increase to $52,800, up from $51,900 in 2013.
Not all tax items will be affected. “Rounding conventions” will keep some tax item for 2014 the same as in 2013. This includes the $5,500 limit on IRA contributions. Also staying put? The amount of unearned income a child can take home without paying tax remains at $1,000: after that, kids are subject to the kiddie tax.
Wolters Kluwer, CCH’s projections are based on the data released by the Department of Labor on September 17, 2013, by the U.S. Department of Labor. Most adjustments are based on Consumer Price Index for September through August prior to the adjusted year; some inflation-adjusted figures are computed at other times.
The IRS usually releases official numbers by December each year; sometimes, it’s as late as January. You can see the 2013 numbers here. It’s worth noting that these Wolters Kluwer, CCH tax bracket projections are for illustrative purposes only and should not be used for income tax returns or other federal income tax related purposes until confirmed by the IRS.