Happy New Year – 2017 Income Tax Update

01 Jan Happy New Year – 2017 Income Tax Update

HAPPY NEW YEAR

Illinois REIA wishes you and yours a Happy, Prosperous and Healthy New Year. Uncle Sam however hopes you had a prosperous 2016 in the hopes that your payable income tax increased over 2015 levels.

Income Tax Season 2017 – Regardless of when the 2017 Income Tax Return filing season will begin this year, your 2016 income tax return is still due on April 15^th.. That is  set in stone unless you file an extension. Any tax due must be included with the extension. If taxes are owed they are still due by April 15^th even if an extension is filed. Failure to pay will result in late filing fees and penalties. The April 15 tax return filing deadline is set by statute and will remain in place. However, the IRS reminds taxpayers that anyone can request an automatic six-month extension to file their tax return. The request is easily done with Form 4868, which can be filed electronically or on paper.

The April 15 tax return filing deadline is set by statute and will remain in place. However, the IRS reminds taxpayers that anyone can request an automatic six-month extension to file their tax return. The request is easily done with Form 4868, which can be filed electronically or on paper.

The January 31^st acceptance date will result in a delay your tenants filing their individual returns. For those of you who are praying for your tenants (who spent all their money starting last November on the Christmas Spending Season) to catch up with their refund, be prepared to wait until Mid February or later for your piece of the Earned Income Credit to trickle in. E-file and Direct Deposit are the fastest way to get a refund without paying a huge get me the cash now penalty.

If you file your tax return in Illinois and your preparer offers Tax Refund Anticipation Loans be prepared for a $15 to $25 hike in the cost of your tax preparation fees. The state of Illinois ruled that the companies which offer such loans could not charge a loan origination fee. Therefore many tax preparation firms which offer refund anticipation loans will pay a higher charge for e-filing to offset the profits the loan origination companies lost due to the states’ ruling. To comply with the new law tax preparers who offer Refund Anticipation Loans will charge the same e-file fee to each and every one of their clients, even those clients smart enough NOT to apply for a refund loan.

The IRS updates is systems annually in preparation for the next year’s tax season. This process was delayed due to the 16-day federal government shut down. The new opening date for individuals to file their 2016 tax returns was chosen to allow the IRS adequate time to program and test its tax processing systems. This does not mean that every form affected by every tax law change will be ready on the 31^st, just most of them. If past experience is any indicator this will roll out much better than the Affordable Healthcare Act On-Line sign up system, but a few minor glitches will inevitably show up.

Due to the government closure the IRS changed the original opening date from Jan. 21 to Jan. 31, 2014. The 2014 date is one day later than the 2013 filing season opening, which started on Jan. 30, 2013 following January tax law changes made by Congress on Jan. 1 under the American Taxpayer Relief Act (ATRA). The extensive set of ATRA tax changes affected many 2012 tax returns, which led to the late January opening.

Many tax preparers will begin preparing returns on January 6th and hold the returns until the IRS begins accepting them. They will then submit any held returns a close of business January 31^st.

There is no advantage to filing a paper return before the opening date. Taxpayers will receive their tax refunds much faster by using e-file and signing up for direct deposit.

The April 15 tax return filing deadline is set by statute and will remain in place. However, the IRS reminds taxpayers that anyone can request an automatic six-month extension to file their tax return. The request is easily done with Form 4868, which can be filed electronically or on paper.