Tax season is upon us, and many are eager to file as early as possible. Once you have received your W-2 or 1099 forms, you are able to file. Tax Day is usually April 15 each year. This year, however— just like last year—Tax Day happens to fall on Emancipation Day, a state holiday observed in Washington, DC. Since the IRS can’t schedule the filing deadline to take place on a holiday or weekend, April 18 is the official IRS deadline for 2017.
There have been several changes made for this tax year. There will be an increase in health insurance penalties. Under the Affordable Care Act (ACA), unless a taxpayer qualifies for an exemption, they are required to have health insurance. Those choosing to go three or more consecutive months without coverage will be subject to this penalty. Qualifying exemptions are listed on IRS.gov. Brittany Jones-Cooper, a Yahoo Finance Writer, offers more insight into this year’s tax filing updates.
In an effort to decrease instances of tax fraud, the IRS is implementing further measures to protect tax filers. One such measure is to add verification codes on nearly 50 million W-2 forms that will be sent out during tax season, up from 2 million forms in 2016. Some could see a slight delay in receiving their tax refund. According to the IRS, the Protecting Americans from Tax Hikes (PATH) Act mandates the IRS hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). As a result, the IRS will not begin releasing refunds until February 15, which means the money is not expected to arrive in your account until the week of February 27. These measures are all for the protection of the taxpayer.
For small business owners, the Small Business Administration (SBA) website offers a ton of information that is specific to this tax filer. It’s important to establish what qualifies as a business or a hobby and what the tax advantages and requirements are for each category. Filers should also gain an understanding of their state and federal tax obligations, whether they are required to obtain a federal tax ID, and when the tax year officially starts for a small business. The SBA will address all of these questions.
For more Innovators’ Toolbox tips from the Society of Innovators of Northwest Indiana, visit www.NWISOI.org.