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Friday October 21, 2016

Washington News

Washington Hotline

October 17 Income Tax Return Deadline

In IR-2016-130 the Service published reminders for 13 million taxpayers who filed for a six month extension. Most tax returns on extension are due on October 17, 2016.

There are several exceptions. Military personnel serving in Afghanistan, Iraq or other combat areas may wait for 180 days after departing the combat zone to file and pay taxes due. In addition, there are certain disaster relief areas in Florida, Louisiana and West Virginia that have extensions. Check www.irs.gov if an extension applies to you as a resident of one of those states.

The IRS has included a number of filing tips for taxpayers on extension.

1. Tax Credits – Check to see if you are a lower income person who qualifies for the earned income tax credit (EITC). Other low-income persons may qualify for the savers credit if they fund an IRA, 401K and file Form 8880. Those who are funding students in higher education programs may qualify for the American Opportunity Tax Credit, which is claimed on Form 8863.

2. Health Care – If you have used the Health Insurance Marketplace, you may be eligible for the premium tax credit. You must file and reconcile any advance credit payments. If you do not have health insurance and are not otherwise exempt, you may be subject to the Shared Responsibility Payment.

3. eFile – Of the tax returns filed so far in 2016, over 87% or 128 million of the 147 million returns were eFiled. eFiling is quick and secure. If your income is $62,000 or less, you could qualify for the IRS Free File Program.

4. Payments – The IRS Direct Pay Plan is a very quick and secure way to pay your tax bills or make online estimated tax payments. You may also make payments with a debit or credit card, or enroll to use the Electronic Federal Tax Payment System.

5. Need Tax Relief – Some taxpayers are struggling to pay their taxes. They may call the IRS and if the tax bill is $50,000 or less, they could use the Online Payment Agreement. This permits monthly payments for a period of up to 72 months. Some taxpayers with financial problems may qualify for a reduced tax payment. You can use the Offer in Compromise Pre-Qualifier on www.irs.gov to see if you are permitted to pay a reduced amount.

6. Before Filing Checks – You should check you return prior to filing and always retain one copy for your records. If your withholding for 2015 resulted in a large refund or substantial tax bill, you may wish to adjust your withholding for the balance of 2016. If you are employed and have a substantial tax amount due, you can ask your employer to increase your withholding for the balance of the year. Refunds can be tracked using the "Where's My Refund" section on www.irs.gov.

Published October 14, 2016
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