Filing season off to a taxing start
The Internal Revenue Service started tax season late this year but it is in full swing with a few changes.
Because of changes from the American Taxpayer Relief Act, the IRS had to update forms and test processing systems that resulted in the delay of the tax season to Jan. 30.
“If you filed on paper before Jan. 30, you can’t start the clock to get your refund, which usually takes 4-6 weeks, until the 30th,” said Mark Hanson, IRS spokesperson. “We are able to process most returns with some exceptions.”
Some of those exceptions include returns claiming an education or an home energy credit. Also, there is an extended delay on business returns that include depreciation, which is causing quite a problem for some tax professionals.
“That form isn’t ready to be e-filed and that’s causing quite a backlog for us,” said Addison Maille, tax partner with Smith Leonard. “We usually try to get them done early and we can’t get them out the door yet.”
Other changes taxpayers may notice are the extension of the Alternate Minimum Tax exemption which keeps millions from having to pay the AMT in addition to their regular taxes, said George Knostman, a tax manager at Sharrard McGee & Co.
Knostman said that the best way to get the most out of your return is to keep good records.
“Keep track of charitable donations throughout the year and keep track of business expenses,” he said. “It doesn’t hurt to try to stay up on tax law through the year either and to talk to you tax professional.”
Maille said that another way to get the most out of your refund is to make sure to contribute to a retirement fund.
“401k isn’t included in taxable income,” he said. “It’s one of the few deductions that you get to keep your money. It’s one of the best plays out there. You’re saving for the future and you get to make a deduction.”
Hanson said that taxpayer also should be leery of scams during tax season.
“Scam artists will send emails and use phishing scams asking for a bunch of personal information or they create tax prep sites that looks legitimate but never sends your information to the IRS,” he said. “Be careful and make sure you use a service or professional that you trust.”