Taxpayers with EIC or Additional Child Tax Credits: Expect Refund Delays in 2017
The IRS is implementing new fraud safeguards in 2017 (for the 2016 tax return filing season). These safeguards require the IRS to hold refunds from taxpayers claiming the Earned Income Credit and/or the Additional Child Tax Credit until mid-February 2017. Other new fraud and identity theft prevention tools may also delay taxpayer’s refunds without these credits. More can be read here.
Employer and Health Insurance Coverage Providers Have More Time to Issue Forms
The 2016 round of Forms 1094 and 1095 reporting health insurance coverage have later deadlines than initially expected. Here is a chart recently issued by the IRS to help taxpayers understand the coming due dates.
|
Action |
2017 Reporting Due Dates for… | ||
| Applicable Large Employers – Including Those That Are Self-Insured | Self-insured Employers That Are Not Applicable Large Employers | Coverage Providers – other than Self-Insured Applicable Large Employers* | |
|
Provide 1095-B to responsible individuals
|
Not Applicable** |
Mar. 2 |
Mar. 2 |
| File 1094-B and 1095-B with the IRS | Not Applicable** | Paper: Feb. 28
E-file: Mar. 31* |
Paper: Feb. 28
E-file: Mar. 31* |
| Provide 1095-C to full-time employees | Mar. 2 | Not Applicable | Not Applicable |
| File 1095-C and 1094-C with the IRS | Paper: Feb. 28
E-file: Mar. 31* |
Not Applicable
|
Not Applicable
|
* If you file 250 or more Forms 1095-B or Forms 1095-C, you must electronically file them with the IRS. Electronically filing ACA information returns requires an application process separate from other electronic filing systems. Additional information about electronic filing of ACA Information Returns is on the Affordable Care Act Information Reporting (AIR) Program page on IRS.gov and in Publications 5164 and 5165.
** Applicable large employers that provide employer-sponsored self-insured health coverage to non-employees may use either Forms 1095-B or Form 1095-C to report coverage for those individuals and other family members.
IRS Use of Private Debt Collection Resumes
A 2015 law allows the IRS to utilize private debt collector firms to collect on overdue tax accounts starting in Spring 2017. These collectors are allowed to contact taxpayers by phone, must act courteously, and can identify themselves as IRS contractors. The IRS will notify taxpayers by mail if their account is transferred to these collectors.
This tactic was employed a few years ago, but was abandoned after taxpayer complaints.
Tax Bill Expected To Be Signed Soon
The Bill we’ve all been waiting for has arrived and is on its way to the President for signature. The Bill primarily extends or makes permanent many provisions that were in place the past few years.
One of the most notable provisions is making the increased Section 179 depreciation deduction permanent (at $500,000/year).
Other notable items include permanent provisions for the American Opportunity Tax Credit (for education expenses) and state sales/use tax deductions (a big win for our friends in zero-income-tax states).
The entire summary of the proposed “Protecting Americans from Tax Hikes Act of 2015” from the Ways and Means Committee can be read here.
Decrease In Standard Mileage Rates for 2016
Likely due to the recent decrease in fuel costs, the IRS announced the lower 2016 standard mileage rates for business use of cars, pickups, vans and panel trucks. The 2016 rate falls $.035 to $.54 per mile from the 2015 rate of $.575 per mile.
The 2016 mileage rate for medical and moving deductions is $.19 per mile, down $.04 from 2015’s rate of $.23 per mile.
The IRS Notice announcing these rates can be found here.
2016 Inflation Adjusted Amounts Released
The IRS recently released the inflation adjusted amounts for 2016, including next year’s tax rates, retirement plan contribution limits and phase out ranges.
The tax rates change nominally in 2016 from 2015 and can be found here.
The 2016 retirement plan contribution limits remain unchanged from 2015 and can be found here.
