Six Tips on Whether to File a 2015 Tax Return

by NFS | Feb 3, 2016 | Archives

Most people file a tax return because they have to, but even if you don’t, there are times when you should. You may be eligible for a tax refund and not know it. Here are six tips to help you find out if you should file a tax return:

1. General Filing Rules. Whether you need to file a tax return depends on a few factors. In most cases, the amount of your income, your filing status and your age determine if you must file a tax return. For example, if you’re single and under age 65 you must file if your income was at least $10,300. Other rules may apply if you’re self-employed or if you’re a dependent of another person. There are also other cases when you must file. Go to IRS.gov/filing to find out if you need to file.
2. Premium Tax Credit.  If you enrolled in health insurance through the Health Insurance Marketplace in 2015, you may be eligible for the premium tax credit. You will need to file a return to claim the credit. If you chose to have advance payments of the premium tax credit sent directly to your insurer during 2015 you must file a federal tax return. You will reconcile any advance payments with the allowable premium tax credit. You should receive Form 1095-A, Health Insurance Marketplace Statement, by early February. The form will have information that will help you file your tax return
3. Tax Withheld or Paid. Did your employer withhold federal income tax from your pay? Did you make estimated tax payments? Did you overpay last year and have it applied to this year’s tax? If you answered “yes” to any of these questions, you could be due a refund. But you have to file a tax return to get it.
4. Earned Income Tax Credit. Did you work and earn less than $53,267 last year? You could receive EITC as a tax refund, if you qualify, with or without a qualifying child. You may be eligible for up to $6,242. Use the 2015 EITC Assistant tool on IRS.gov to find out if you qualify. If you do, file a tax return to claim it.
5. Additional Child Tax Credit. Do you have at least one child that qualifies for the Child Tax Credit? If you don’t get the full credit amount, you may qualify for the Additional Child Tax Credit.
6. American Opportunity Tax Credit. The AOTC is available for four years of post secondary education and can be up to $2,500 per eligible student. You, your spouse or your dependent must have been a student enrolled at least half time for at least one academic period. Even if you don’t owe any taxes, you still may qualify. You must complete Form 8863, Education Credits, and file it with your return to claim the credit. Use the Interactive Tax Assistant tool    on IRS.gov to see if you can claim the credit. Learn more by visiting the IRS’ Education Credits Web page.

If you need additional help to determine if you should be filing a tax return, please contact our office.

Identity Theft Is an Ongoing Concern and on the IRS Annual “Dirty Dozen” List of Tax Scams to Avoid

by NFS | Feb 2, 2016 | Archives

WASHINGTON — The Internal Revenue Service today issued a filing season alert warning taxpayers to watch out for identity theft at tax time and highlighted the crime as the first scam in the agency’s “Dirty Dozen” series.

Over the course of the past year, as part of the Security Summit initiative, the IRS partnered with states and the tax industry to enhance coordination and create a more secure system for taxpayers.

Security Summit participants, including the IRS, will regularly share details of fraudulent schemes detected this season so industry and government have the same information and can adjust accordingly to provide increased protection. Many changes will be invisible to the taxpayer, but the more than 20 shared data elements are critical to making sure the IRS, states and industry can better verify the taxpayer and the legitimacy of the tax return.

“Our collaborative efforts with the Security Summit have given the IRS additional tools to stop fraudulent returns at the door,” said IRS Commissioner John Koskinen. “The criminals continue to look for increasingly sophisticated ways to breach the tax system. While the IRS has improved prevention and detection efforts, we’re calling on taxpayers to protect their private information so thieves can’t steal personal data to file fraudulent returns.”

The IRS also joined with industry and states on a public awareness campaign to provide taxpayers with easy tips to better protect themselves.  The “Taxes. Security. Together.” campaign includes YouTube videos, Tax Tips and fact sheets to help taxpayers stay safe online.

The Dirty Dozen is compiled annually by the IRS and lists a variety of common scams taxpayers may encounter any time during the year. Many of these con games peak during filing season as people prepare their tax returns or hire someone to do so.

“We urge people to use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues because scams can take on many sophisticated forms,” Koskinen said. “Keep your personal information secure by protecting your computers and only giving out your Social Security numbers when absolutely necessary.”

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. While the IRS has made significant strides over the past several years to address this issue, it remains a top concern for the IRS, which is why identity theft remains on the Dirty Dozen list again this year as the IRS works to protect taxpayers and help victims.

In the most recent three fiscal years, Criminal Investigation (CI) helped convict approximately 2,000 identity thieves. In fiscal year 2015, the IRS initiated 776 identity theft related investigations, which resulted in 774 sentencings through CI enforcement efforts. The courts continue to impose significant jail time with the average months to serve in fiscal year 2015 at 38 months— the longest sentencing being over 27 years.

The IRS understands that identity theft is a frustrating, complex process for victims. While identity thieves steal information from sources outside the tax system, the IRS is often the first to inform a victim that identity theft occurred. The IRS is working hard to resolve identity theft cases as quickly as possible.

For more information, please contact our office for your free guide entitled “Taking Charge – What To Do If Your Identity is Stolen”.

 

Have You Seen Your Social Security Card Lately?

by NFS | Feb 1, 2016 | Archives

We strive to provide you world-class service. With that in mind, Social Security rolled out a new service that allows some of our customers to request a replacement Social Security card online.

The new online version of the Application for a Replacement Social Security Card allows people in some states to request a replacement card online through our secure my Social Security portal without traveling to a field office.

Currently available in the District of Columbia, Michigan, Nebraska, Washington, and Wisconsin, it’s an easy, convenient, and secure way to request a replacement card online. First, you’ll need to create a my Social Security account. When you open a my Social Security account, we protect your information by using strict identity verification and security features. The application process has built-in features to detect fraud and confirm your identity. In certain cases, security experts at Social Security will contact you to ensure it is a legitimate application. We only issue a replacement card if there’s no suspicion of fraud and then we only mail it to a verified address.

To take advantage of this new service option, you must:

• Have or create a my Social Security account;
• Have a valid driver’s license in a participating state or the District of Columbia (or a state-issued identification card in some states);
• Be age 18 or older and a United States citizen with a domestic U.S. mailing address (this includes APO, FPO, and DPO addresses); and
• Not be requesting a name change or any other changes to your card.

We plan to add more states, so we encourage you to check with us later in the year!

Before you request a replacement card online, you may want to consider whether you need to get a replacement card at all. Most times, knowing your number is what’s important. You’ll rarely need the card itself, perhaps only when you get a new job and have to show it to your employer. If you decide that you do need a replacement card, log into your personal my Social Security account and select “Request a Replacement Card.” Next, answer the screening questions to confirm eligibility, complete personal data, and you’re done!

See how easy that was? If you are still having difficulty, please contact our office for assistance.

-Posted on Social Security Matters February 1, 2016 by Jim Borland, Assistant Deputy Commissioner, Communications    

Six Reasons to E-file your Taxes in 2016

by NFS | Jan 29, 2016 | Archives

Are you one of the few tax filers who still file a paper return? If so, now may be the best time to switch to e-file. Last year almost 129 million taxpayers filed their taxes electronically. They chose to e-file because it’s the fastest and safest way to file.

Here are the top six reasons why you should file electronically in 2016:

1. Accurate and Easy. IRS e-file is the best way to file an accurate tax return. The tax software helps you avoid mistakes by doing the math for you. It guides you through each section of your tax return. It is much easier than doing your taxes by hand and mailing paper tax forms.
2. Safe and Secure. IRS e-file meets strict security guidelines. It uses modern encryption technology to protect tax returns. The IRS has processed more than 1.5 billion e-filed tax returns to date. This year, the IRS is working with states and tax industry leaders to protect your tax return from identity theft refund fraud. This new effort has put strong new safeguards in place to make tax filing safer than ever before.
3. Convenient and Often Free. You can ask your tax preparer to e-file your tax return. Most paid preparers are required to file their clients’ returns electronically.
4. Faster Refunds. In most cases, e-file helps get your refund faster. That’s because there is nothing to mail and your tax return is virtually mistake-free. The fastest way to get your refund is to combine e-file with direct deposit into your bank account. The IRS issues more than nine out of 10 refunds in less than 21 days.
5. Health Care Tax Reporting. IRS e-file can help with tax provisions of the health care law. The software will walk you through the lines on the tax forms that relate to the Affordable Care Act.
6. Payment Options. If you owe taxes, you can e-file early and set up an automatic payment on any day until the April 18 deadline. You can pay electronically from your bank account with IRS Direct Pay. You also have many other options to pay, including electronic funds withdrawal or payment by debit or credit card. Visit IRS.gov/payments for details.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Of course, here at Northeast Financial Strategies we offer FREE E-File with every eligible return on both Federal and State returns. Contact our office for help today!

Lost or Stolen Refund Check?

by NFS | Jan 29, 2016 | Archives

Taxpayers can always check the status of their Federal Tax refund using “Where’s My Refund?” at IRS.gov or the IRS2Go mobile app. “Where’s My Refund?” is updated no more than once every 24 hours, usually overnight. If one of these apps indicates the IRS issued your refund, but you haven’t received it, your refund may have been stolen, lost, or misplaced.

If this is the case, you can ask the IRS to do a refund trace. This is the process the IRS uses to track a stolen, lost, or misplaced check or verify that a financial institution received a direct deposit.
The Taxpayer Advocate Service provides guidance on their website on the process to follow if you have not received your refund check.

• Direct Deposit Refunds: If your refund was a direct deposit, the financial institution will get a letter within 6 weeks from the Bureau of the Fiscal Service in the Treasury Department, to verify where the deposit went.
• Paper Check Refunds: If the check hasn’t been cashed, you’ll get a replacement in about 6 weeks. If your original refund check was cashed, you’ll receive a claim package within 6 weeks to complete and return to the Bureau of the Fiscal Service to pursue your claim.
• Denied Claims: If your claim is denied, the Bureau of the Fiscal Service will send you a denial letter with instructions on how to appeal the decision.

If you need further assistance in tracking down your refund, please let us know.