As we are in the middle of tax season, many are still working on their papers to submit their tax return. Tax planning is never fun and the confusion comes with the tax return filing is still there; especially with the several new developments on the tax front.
Here are five things you need to know before you file a tax return this year:
1. Tax preparation software
Tax preparation software is getting more popular year after year as it’s providing more convenient way to file your tax return.
If your income below is below $62,000, the IRS offers a free software that can be used to file tax return. However, if your income is above $62,000, then you will need to purchase your own filing software, you will still get a free file Fillable forms from the IRS.
2. The Tax deadline for filling is different
Because of the federal holiday, Emancipation Day being on Friday 15th, the IRS changed the deadline rolls over Monday, April 18. Although it’s only three days later, but If you are one of the last-minute tax filers, you will have extra days to prepare yourself.
3. Obamacare penalties are higher
The penalties are higher for those without having qualifying health care coverage. Those penalties started at $95 per adult or 1 percent of household income, but this year the penalties are $325 per adult or 2 percent of household income if you didn’t have health insurance that year.
If you don’t have health insurance coverage in 2015, visit healthcare.gov or consult a tax professional.
4. Audits chances are lower.
There will likely be fewer tax audits this year since all the IRS budget is approved to improve the customer-service issues not for tax compliance and enforcement. However, if you ended up with a regular in-person field audit, it will likely be as intense as it has always been.
5. Longer process to prevent Identity theft
According to the IRS website, the IRS is using more than new 20 new data elements on tax returns to protect consumers against identity theft refund fraud.
“We are breaking new ground in the battle against identity theft,” said IRS Commissioner John Koskinen in a statement. “Taxpayers will have more protection than ever when they file their tax returns.”
There will be more security questions for taxpayers and more stringent passwords to access tax software. There will also be a new feature that will lock users out after too many failed log-in attempts.
Hope these points can help you in your tax filing this year.