The Internal Revenue Service will kick off the upcoming 2015 tax filing season on Jan. 20, with reinstated deductions to help taxpayers.
The agency also encouraged taxpayers and tax practitioners to take a fresh look at the many benefits of e-filing. “Georgia experience another record breaking year with more than 3.8 million e-filed returns, said IRS Spokesman Mark Green. “Everyone should try e-file! It’s safe, easy, fast and accurate. I strongly recommend that taxpayers try it,” Green said.
In addition, Green offer highlights that taxpayers should watch for as they file tax returns for 2014:
What is the due date for the 2014 federal tax returns?
Your tax return (or a request for an extension) must be filed no later than Wednesday, April 15, 2015
How many returns does the IRS expect to be filed this year?
· Nationwide, the IRS expects to receive about 151 million 2014 individual tax returns.
About 4.6 million from Georgia
When can people file their 2014 tax return?
IRS plans to open the 2015 filing season and begin processing individual income tax returns on Jan. 20.
We (the IRS) will be working closely with the tax software industry and tax professional community to minimize delays and ensure as smooth a tax season as possible under the circumstances.
What happens if someone files a paper return before the 20th?
The IRS will not process paper tax returns before the anticipated Jan. 20 opening date.
Will the extenders legislation affect the starting date?
Taxpayers can file starting Jan. 20, including those affected by Congress renewing a number of “extender” provisions (about 55) of the tax law that expired at the end of 2013. These provisions were renewed by Congress through the end of 2014. The final legislation was signed into law Dec. 19, 2014.
Some of the more popular renewed Tax Credits for Individuals are:
Residential Energy Tax Credit – for installing energy efficient windows, doors, water heaters, etc. in an existing home. Up to $500 lifetime credit.
Educator’s deduction of $250 for out-of-pocket classroom expenses – With this provision, originally enacted in 2002, teachers could deduct up to $250 of out-of-pocket expenses for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250 classroom materials.
Sales Tax Deduction – One of the largest permanent tax breaks is the state and local tax deduction, which allows filers who itemize to deduct the amount paid in state or local income tax. However, people who live in states with no income tax cannot take advantage of this deduction. This provision created a deduction for sales tax states by allowing an individual to deduct either the amount they paid in sales tax or income tax since 2004. (Primarily benefiting people living in areas without state and local income taxes.)
Charitable Donations from an IRA – Under this provision created in 2006, retirees age 70.5 and older could donate up to $100,000 tax-free from their IRA each year to charity. Normally, the donation would be eligible for a charitable deduction, but this provision converts the deduction to a complete exclusion, which allows retirees to make their required IRA withdrawals without triggering a tax a Social Security benefits for retirees with income other than Social Security.
Tuition and Fees Deduction – This deduction, in place since 2001, allows filers with incomes less than $65,000 a year ($130,000 if filing jointly) to deduct up to $4,000 of tuition and fees paid for higher education. This provision was for filers who did not claim one of the other educational credits, and it phased out entirely for filers with incomes over $80,000 ($160,000 if filing jointly). Benefiting parents and students. Claim on Form 8917 .
Mortgage Debt Forgiveness – Normally, forgiven debt counts as taxable income. In response to the housing crisis, homeowners could exclude up to $2 million of canceled debt ($1 million if married filing separately) on their principal residence. The forgiveness must be directly related to a decline in the home’s value or the taxpayer’s financial condition. This provision was passed as temporary stimulus measure in 2007.
Mortgage Insurance Premiums – itemized deduction.
Parity for Commuter Transit Benefit – Before this provision expired, commuters could spend up to $245 a month of tax-free income for either transit or parking. After the expiration, the amount for transit has dropped to $130 a month, while the amount for parking rose with inflation to $250 a month, meaning that those who drive to work are now subsidized more than those who use public transit. The transit benefit originated in 1993 and became equal to the parking benefit in 2009.
How will the Affordable Care Act affect an individual’s 2014 tax return?
“I strongly encourage taxpayers to visit our website and order/view publications 5187 and 5185 for more information on ACA,” said Green. http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Health-Care-Law-and-Your-Tax-Return,
www.irs.gov/pub/irs-pdf/p5187.pdf, www.irs.gov/pub/irs-pdf/p5185.pdf
The vast majority of Americans are already covered and don’t need to do anything more than check a box on their tax return.
Check box 61 on the Form 1040, Line 38 on Form 1040A, or Line 11 on Form 1040EZ.
Individuals who didn’t maintain their healthcare coverage throughout the year must either have exemptions from coverage or make individual shared responsibility payments with their federal income tax returns.
Only people who got coverage through the Health Insurance Marketplace may be eligible for the premium tax credit.
Individuals that purchased coverage through the Marketplace and opted to have advance credit payments sent directly to their insurance company must reconcile those payments with the amount of the credit they are actually allowed on their tax return.
Coverage Exemptions and payment amounts will be calculated using the Form 8965 instructions.
How will people know what to put on their tax return?
For most people it will mean just checking a box on their tax return to indicate that they had coverage for the entire year. Others should visit IRS.gov/aca for more information about exemptions and payments. Exemptions will be claimed using Form 8965, Health Coverage Exemptions.
Individuals who bought health insurance through the Marketplace should receive Form 1095-A, Health Insurance Marketplace Statement, by the end of January. Most people are already familiar with using similar tax information documents such as their W2 or Form 1099 to prepare their tax return.
Individuals claiming the premium tax credit will use the information on Form 1095-A to complete Form 8962, Premium Tax Credit, to claim the credit on a Federal Tax Return or to reconcile advance credit payments.
What can people do now if they don’t have insurance?
Individuals can purchase coverage directly from insurance companies or brokers, or through the Marketplace.
The Department of Health and Human Services administers the requirements for the Marketplace and the health plans that are offered.
Although the Marketplace open enrollment period for 2015 ends in February 2015, under certain circumstances eligible individuals may qualify for a Special Enrollment Period and will still be able to buy health coverage for 2015 through the Marketplace. The open enrollment period for coverage in 2015 will run from November 15, 2014 through February 15, 2015.
Visit the Department of Health and Human Services website at HealthCare.gov to learn more about coverage options, financial assistance and to enroll in coverage.
Information on health care related tax provisions, including the individual shared responsibility provision, is on IRS.gov/aca.
Where can I get assistance?
- The IRS Web site at www.irs.gov.
- Information on IRS.gov:
- Highlights of the latest tax law changes, tax tips, news releases and frequently asked questions.
- Links to information about:
· Popular Tax Credits and Deductions
· IRS Free File, the free electronic tax filing service provided by IRS partners in the tax software preparation industry.
· “Where’s My Refund?” which helps taxpayers track the status of their refunds.
· Commonly used forms and tax instructions and
· Information for those facing difficult times financially.
· Volunteer Income Tax Assistance (VITA) provides free tax return assistance to low or moderate income taxpayers. Tax Counseling for the Elderly (TCE) provides assistance to elderly taxpayers.
VITA and TCE sites open in late January or early February. Check community newspapers, or call the IRS at 1-800-829-1040 for VITA or TCE site locations.
You may also call AARP—the largest TCE participant—at 1-888-227-7669 for the nearest AARP Tax-Aide site.
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