File Extended 2015 Tax Returns ASAP To Maintain Eligibility for Advance Payments of the Premium Tax Credit

The IRS is sending letters to taxpayers who received advance payments of the premium tax credit in 2015, but who have not yet filed their tax return. You must file a tax return to reconcile any advance credit payments you received in 2015 and to maintain your eligibility for future premium assistance. If you do not file, you will not be eligible for advance payments of the premium tax credit in 2017.

If you receive Letter 5858 or 5862, you are being reminded to file your 2015 federal tax return along with Form 8962, Premium Tax Credit.  The letter encourages you to file within 30 days of the date of the letter to substantially increase your chances of avoiding a gap in receiving assistance with paying Marketplace health insurance coverage in 2017.

Here’s what you need to do if you received a 5858 or 5862 letter: 

• Read your letter carefully.
• Review the situation to see if you agree with the information in the letter.
• You will need Form 1095-A that you received from your Marketplace to complete your return. If you need a copy of your Form 1095-A, log in to your HealthCare.gov or state Marketplace account or call your Marketplace call center.
• File your 2015 tax return with Form 8962 as soon as possible, even if you are not required to file for other reasons.
• If you have already filed your 2015 tax return with Form 8962, you can disregard the letter.

REMEMBER: If you received Premium Tax Credit advance payments, you MUST file a tax return EVEN IF you are not otherwise required to file a return. 

From IRS

IRS to Taxpayers: Check Your Withholding; New Factors Increase Importance of Mid-Year Check Up

The Internal Revenue Service encourages taxpayers to perform a mid-year tax withholding check-up as several new factors could affect their refunds in 2017.  Taking a closer look at the taxes being withheld can help ensure the right amount is withheld, either for tax refund purposes or to avoid an unexpected tax bill next year.

The withholding review takes on even more importance this year given a new tax law change that requires the IRS to hold refunds a few weeks for some early filers in 2017 claiming the Earned Income Tax Credit and the Additional Child Tax Credit. In addition, the IRS and state tax administrators continue to strengthen identity theft and refund fraud protections, which means some tax returns could again face additional review time next year to protect against fraud.

"With these changes, it makes good sense on many different levels to check on your withholding and plan ahead for next tax season," said IRS Commissioner John Koskinen. "It's a personal choice if you want to have extra money withheld to get a bigger tax refund, but you have options available if you prefer to have a smaller refund next year and more take-home money now."

By adjusting the Form W-4, Employee’s Withholding Allowance Certificate, taxpayers can ensure that the right amount is taken out of their pay throughout the year so that they don’t pay too much tax and have to wait until they file their tax return to get any refund. Employers use the form to figure the amount of federal income tax to be withheld from pay.

Some Refunds Delayed in 2017

When considering refund issues, the IRS wants taxpayers to be aware several factors could affect the timing of their tax refunds next year. A major change will affect some early tax filers claiming two key credits who won't see their refunds until after Feb. 15.

Beginning in 2017, a new law requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until mid-February. Under the change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act, the IRS must hold the entire refund – even the portion not associated with the EITC and ACTC -- until at least Feb. 15. This change helps ensure that taxpayers get the refund they are owed by giving the agency more time to help detect and prevent fraud.

As in past years, the IRS will begin accepting and processing tax returns once the filing season begins. All taxpayers should file as usual, and tax return preparers should also submit returns as they normally do. Even though the IRS cannot issue refunds for some early filers until at least Feb. 15, the IRS reminds taxpayers that most refunds will still be issued within the normal timeframe: 21 days or less, after being accepted for processing by the IRS.

''This is an important change to be aware of for some taxpayers used to getting an early refund," Koskinen said. "We'll be focusing on awareness of this change throughout the fall, but it's important for taxpayers who might be affected by this to be aware of the change for their planning purposes. Although we still expect to issue most refunds within 21 days, we don't want people caught by surprise if they get their refund a few weeks later than previous years."

Stronger Security Filters and Tax Refund Processing

As the IRS steps up its efforts to combat identity theft and tax refund fraud through its many processing filters, legitimate refund returns sometimes get delayed. While the IRS is working diligently to stop fraudulent refunds from being issued, it is also focused on releasing legitimate refunds as quickly as possible. 

The agency encourages taxpayers to check their tax withholding now. Whether they prefer more earned money during the year or a large refund, checking withholding can ensure people don’t receive an unexpected tax bill next year. Making these checks in the late summer or early fall can give taxpayers enough time to adjust their withholdings before the tax year ends in December.

Changes in Circumstances and Advance Premium Tax Credits

There are also some important reminders for taxpayers who receive advance payments of the Premium Tax Credit under the Affordable Care Act. 

People who have advance payments of the premium tax credit made to their insurance company on their behalf should report life changes to their Marketplace. Changes in circumstances that should be reported include moving to a new address and changes to income or family size. Reporting these changes will help individuals avoid large differences between the advance credit payments and the amount of the premium tax credit allowed on their tax return, which may affect their refund or balance due.

Making a Withholding Adjustment

In many cases, a new Form W-4, Employee’s Withholding Allowance Certificate, is all that is needed to make an adjustment. Taxpayers submit it to their employer, and the employer uses the form to figure the amount of federal income tax to be withheld from pay

The IRS offers several online resources to help taxpayers bring taxes paid closer to what is owed. They are available anytime on IRS.gov. They include:

• IRS Withholding Calculator – Online tool helps determine the correct amount of tax to withhold.
• IRS Publication 505 – Tax Withholding and Estimated Tax.
• Tax Withholding – Complete information on withholding, estimated taxes, FAQs, more.

Self-employed taxpayers, including those involved in the sharing economy, can use the Form 1040-ES worksheet to correctly figure their estimated tax payments. If they also work for an employer, they can often forgo making these quarterly payments by instead having more tax taken out of their pay.

From IRS

Moving Expenses: Deductible on your Tax Return?

Did you move due to a change in your job or business location? If so, you may be able to deduct your moving expenses, except for meals. Here are the top tax tips for moving expenses.

In order to deduct moving expenses, your move must meet three requirements:

1. The move must closely relate to the start of work.  Generally, you can consider moving expenses within one year of the date you start work at a new job location. Additional rules apply to this requirement.
   
2. Your move must meet the distance test.  Your new main job location must be at least 50 miles farther from your old home than your previous job location. For example, if your old job was three miles from your old home, your new job must be at least 53 miles from your old home.
   
3. You must meet the time test.  After the move, you must work full-time at your new job for at least 39 weeks in the first year. If you’re self-employed, you must meet this test and work full-time for a total of at least 78 weeks during the first two years at your new job site. If your income tax return is due before you’ve met this test, you can still deduct moving expenses if you expect to meet it.

See Publication 521, Moving Expenses, for more information about these rules. It’s available on IRS.gov/forms anytime.

If you can claim this deduction, here are a few more tips from the IRS: 

• Travel.  You can deduct transportation and lodging expenses for yourself and household members while moving from your old home to your new home. You cannot deduct your travel meal costs.
  
• Household goods and utilities.  You can deduct the cost of packing, crating and shipping your things. You may be able to include the cost of storing and insuring these items while in transit. You can deduct the cost of connecting or disconnecting utilities.
  
• Nondeductible expenses.  You cannot deduct as moving expenses any part of the purchase price of your new home, the cost of selling a home or the cost of entering into or breaking a lease. See Publication 521 for a complete list.
  
• Reimbursed expenses.  If your employer later pays you for the cost of a move that you deducted on your tax return, you may need to include the payment as income. You report any taxable amount on your tax return in the year you get the payment.
  
• Address Change.  When you move, be sure to update your address with the IRS and the U.S. Post Office. To notify the IRS file Form 8822, Change of Address.

Premium Tax Credit – Changes in Circumstances. 

If you or anyone in your family purchased health coverage through the Marketplace and had advance payments of the premium tax credit paid in advance to your insurance company to lower your monthly premiums, it is important to report life changes to the Marketplace when they happen. Moving to a new address is one change you should report. Other things to report include changes in your income, employment, family size, and gaining or losing eligibility for other coverage. Reporting life changes as they happen allows the Marketplace to adjust your advance credit payments. This will help you avoid a smaller refund or unexpectedly owing taxes when you file your tax return.

Additional IRS Resources:

• Publication 5152: Report changes to the Marketplace as they happen English | Spanish
• Can I Deduct My Moving Expenses? – Interactive Tax Assistant tool
• Tax Topic 455 – Moving Expenses
• Form 3903, Moving Expenses

IRS YouTube Videos:

• Moving Expenses – English | Spanish | ASL
• Premium Tax Credit: Changes in Circumstances – English | Spanish |ASL

IRS Podcasts:

• Moving Expenses – English | Spanish
• Premium Tax Credit Changes in Circumstances – English | Spanish

From IRS

Reminder for Truckers: Highway Use Tax Return Is Due Aug. 31

The Internal Revenue Service today reminded owners of heavy highway vehicles that in most cases their next federal highway use tax return is due Wednesday, Aug. 31, 2016.

The deadline generally applies to Form 2290 and the accompanying tax payment for the tax year that begins July 1, 2016, and ends June 30, 2017. Returns must be filed and tax payments made by Aug. 31 for vehicles used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.

Though some taxpayers have the option of filing Form 2290 on paper, the IRS encourages all taxpayers to take advantage of the speed and convenience of filing this form electronically and paying any tax due electronically. Taxpayers reporting 25 or more vehicles must e-file. You can find a list of IRS-approved e-file providers on IRS.gov.

The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. This generally includes trucks, truck tractors and buses. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall below the 55,000-pound threshold. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply, explained in the instructions to Form 2290.

Truckers do not need to visit an IRS office to e-file Form 2290. You can electronically file the Form 2290 and pay any Heavy Highway Vehicle Use Tax due online. Find an approved provider for Form 2290 on the 2290 e-file partner’s page. Generally, if you e-file Form 2290, you can receive your IRS-stamped Schedule 1 electronically minutes after e-filing. You can print your Schedule 1 and provide it to your state Department of Motor Vehicles without visiting an IRS office. If you choose to visit your local office, be aware that many Taxpayer Assistance Centers now operate by scheduled appointments. Use theTaxpayer Assistance Center Office Locator to see if your local office will require an appointment.

For more information about the highway use tax, visit the Trucking Tax Centerat IRS.gov/truckers.

From IRS

About Your IRS Notice or Letter

The IRS normally sends correspondence in the mail, with millions of letters sent to taxpayers every year. Keep these important points in mind if you get a letter or notice:

• Don’t Ignore It.  You can respond to most IRS notices quickly and easily.
  
• Follow Instructions.  Read the notice carefully. It will tell you if you need to take any action. Be sure to follow the instructions. The letter will also have contact information if you have questions.
  
• Focus on the Issue.  IRS notices usually deal with a specific issue about your tax return or tax account. Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. If you do not understand what you are supposed to do or have questions, you should contact your tax advisor.
  
• Correction Notice. If the IRS corrected your tax return, you should review the information provided and compare it to your tax return.

If you agree, you don’t need to reply unless a payment is due.

If you don’t agree, it’s important that you respond. Follow the instructions on the notice for the best way to respond to us. You may be able to call to resolve the issue. Have a copy of your tax return and the notice with you when you call. If you choose to write, be sure to include information and any documents you want the IRS to consider. Also, write your taxpayer identification number (Social Security number, employer identification number or individual taxpayer identification number) on each page of the letter you send. Mail your reply to the address shown on the notice. Allow at least 30 days for a response.

• Respond to Requests about the Premium Tax Credit.  The IRS may send you a letter asking you to clarify or verify your premium tax credit information. You should follow the instructions on the letter. For more information about these letters, see the Understanding Your Letter 0012C page on IRS.gov/aca.
  
• You Don’t Need to Visit the IRS.  You can handle most notices without visiting the IRS. If you have questions, call the phone number in the upper right corner of the notice. Have a copy of your tax return and the notice when you call.
  
• Keep the Notice.  Keep a copy of the IRS notice with your tax records.
  
• Watch Out for Scams.  Don’t fall for phone and phishing email scamsthat use the IRS as a lure. We will contact you about unpaid taxes by mail first – not by phone.  Be aware that the IRS does not initiate contact with taxpayers by email, text or social media.

Additional IRS Resources available at www.irs.gov :

• Tax Topic 651 – Notices – What to Do
• Tax Topic 653 – IRS Notices and Bills, Penalties and Interest Charges
• Understanding Your CP2000 Notice
• Understanding Your Letter 0012C

IRS YouTube Videos:

• Receive a Letter from the IRS? – English | Spanish | ASL

You Can Do It; I can help. DO NOT IGNORE IRS NOTICES. If you don't feel comfortable calling or writing the IRS yourself, I can help. Please email with any questions about your individual tax account.

From IRS

It's Time for a Premium Tax Credit Checkup

If you or anyone in your family are getting advance payments of the premium tax credit, it’s a good time for a checkup to see if you need to adjust your premium assistance. Since the advance payments are paid directly to your insurance company and lower the out-of-pocket cost for your health insurance premiums, changes in your income or family size may affect your credit.  You should report changes that have occurred since the time that you signed up for your health insurance plan.

Changes in circumstances that you should report to your Marketplace when they happen include:

• Increases or decreases in your household income including, lump sum payments; for example, lump sum payment of Social Security benefits
• Marriage
• Divorce
• Birth or adoption of a child
• Other changes affecting the composition of your tax family
• Gaining or losing eligibility for government sponsored or employer sponsored health care coverage
• Moving to a different address

Reporting the changes when they happen will help you avoid getting too much or too little advance payment of the premium tax credit.  Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing out on premium assistance to lower what you pay out-of-pocket for your monthly premiums.

Changes in circumstances also may qualify you for a special enrollment period to change or get insurance through the Marketplace. In most cases, if you qualify for the special enrollment period, you generally have 60 days to enroll following the change in circumstances. You can find Information about special enrollment at HealthCare.gov.

The Premium Tax Credit Change Estimator can help you estimate how yourpremium tax credit will change if your income or family size changes during the year. This estimator tool does not report changes in circumstances to your Marketplace. 

To report changes and to adjust the amount of your advance payments of the premium tax credit you must contact your Health Insurance Marketplace.

from IRS

What You Need to Know if You Get a Letter in the Mail from the IRS

Each year, the Internal Revenue Service mails millions of notices and letters to taxpayers for a variety of reasons. If you receive correspondence from the IRS:

1. Don’t panic. You can usually deal with a notice simply by responding to it.
2. Most IRS notices are about federal tax returns or tax accounts. Each notice has specific instructions, so read your notice carefully because it will tell you what you need to do.
3. Your notice will likely be about changes to your account, taxes you owe or a payment request. However, your notice may ask you for more information about a specific issue.
4. If your notice says that the IRS changed or corrected your tax return, review the information and compare it with your original return.
5. If you agree with the notice, you usually don’t need to reply unless it gives you other instructions or you need to make a payment.
6. If you don’t agree with the notice, you need to respond. Write a letter that explains why you disagree, and include information and documents you want the IRS to consider. Mail your response with the contact stub at the bottom of the notice to the address on the contact stub. Allow at least 30 days for a response.
7. If you have questions, call the phone number in the upper right-hand corner of the notice. Be sure to have a copy of your tax return and the notice with you when you call.
8. Always keep copies of any notices you receive with your tax records.
9. Be alert for tax scams. The IRS sends letters and notices by mail. We don’t contact people by email or social media to ask for personal or financial information. If you owe tax, you have several payment options. The IRS won’t demand that you pay a certain way, such as prepaid debit or credit card.
10. For more on this topic, visit IRS.gov. Click on the link ‘Responding to a Notice’ at the bottom center of the home page. Also, see Publication 594, The IRS Collection Process. You can get it on IRS.gov/forms at any time.
11. Please contact me directly for questions about your individual tax situation and to discuss your IRS notice.

If you need to make a payment visit IRS.gov/payments or use the IRS2Go app to make payment with Direct Pay for free, or by debit or credit card through an approved payment processor for a fee.

Additional IRS Resources:

• Tax Topic 651 – Notices – What to Do
• Tax Topic 653 – IRS Notices and Bills, Penalties, and Interest Charges
• Understanding Your CP2000 Notice

IRS YouTube Videos:

• Received a Letter from the IRS? – English | Spanish | ASL