This Coming Tax Season Could Make You Sick
It’s no joke.
Tax season is typically nerve wracking on its own, but for this upcoming tax season there are a couple of things happening at the IRS that are bound to negatively affect millions of taxpayers.
First of all, whether you are healthy as a horse or sick as a dog, not having healthcare coverage or simply not indicating whether or not you do, could get your tax return booted out of the IRS. And that could make anyone sick. This upcoming 2018 filing season is the first in which the IRS will not accept returns that have not addressed the health care coverage requirements of the Affordable Care Act.
The IRS said that it would not accept the electronic tax return until the taxpayer indicates whether they had coverage, had an exemption or will make a shared responsibility payment. On top of that, the IRS said tax returns filed on paper that don’t address the health coverage requirements may also be suspended pending the receipt of additional information. If you file and you’re expecting a refund, you will have to re-file if the health coverage requirement is left unaddressed on your tax return. Don’t plan on spending your refund any time soon!
A Little News To Make Some Taxpayers Feel Better
Okay, so it’s not all bad news. The IRS has also increased the contribution limit for taxpayers who are enrolled in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan. You can now contribute $500 more per year. The previous contribution limit was $18,000. Now it’s grown to $18,500.
Some Things Remain The Same
A couple of other items the IRS has not changed may irritate some taxpayers. Others may be neutral about the news that the limit on annual contributions to an IRA stays unchanged at $5,500. Also, for those aged 50 and above, the additional catch-up contribution limit to your IRA isn’t subject to an annual cost-of-living adjustment and remains $1,000.
Likewise, the catch-up contribution limit for employees ages 50 and over who contribute to 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000. So, if you had hopes of catching up to your retirement savings goals faster, you’ll have to rethink that plan.
A Little More Good News
On the identity theft front, the IRS says they are making headway in their prevention efforts. In fact the IRS has reported that this year through August, they have stopped 443,000 confirmed identity theft returns, which represents a 30 percent decline from the same period last year. They claim that they’ve made it more difficult for criminals to file false returns in volume. The criminals have to work harder to submit returns one-by-one.
Another number that tells the IRS they are doing something right is the number of people reporting to the IRS that they were victims of identity theft. In 2016, the number of victims was 376,000, a drop of 46 percent from the prior year. This year through August, a mere 189,000 taxpayers filed victim reports, an additional drop of about 40 percent from the same period last year.
This by no means is permission to let your guard down when it comes to protecting yourself against identity theft. Criminals simply don’t give up. So you can never let your guard down.
Be Prepared For 2018 Tax Season
Now you’re armed with a little information that might be useful as the year comes to a close. If you want to be even better prepared, give our offices a call and let us see how we can help you.