Tax season is on fire – don’t miss a thing this year!
Tax season 2018 must be the most unusual and unpredictable season due to the significant amendments to the tax code under the Tax Cuts and Jobs Act. For the first time in thirty years the taxation system has radically changed.
Tax Returns 2017 VS Tax Returns 2018
Last year, Americans received $324 billion in refunds. The average tax refund was just under $3,000. The penalty for ignoring Obamacare health insurance is still valid and can cost an average American $695 (per adult) and $347.50 (per child) or 2.5% of income. A family of four will have to pay about $3,000.
This year, the IRS expects to receive approximately 155 million individual tax returns. Electronic filing of the declaration and direct deposit for reimbursement remains the fastest and safest way to file an accurate income tax return and receive a refund. The IRS estimates that more than four out of five tax returns will be filed electronically. The agency issues more than 9 out of 10 refunds in less than 21 day and strongly encourages people to file their tax returns electronically for faster refunds.
FATCA comes into full power in 2018
In 2018 the law of the Foreign Account Tax Compliance Act (FATCA), signed by Obama back in 2010, becomes fully operational. It concerns Americans earning money abroad, having foreign accounts, and those who transfer money abroad (receiving/sending). Experts say that in 2018 FATCA will affect even illegal immigrants sending money to their home countries. Also, within FATCA, tax authorities want to deal with the recipients of foreign pensions. If people are living off Social Security, receiving a pension from outside the US at the same time, and officially not declaring it anywhere, they should reconsider doing so and fast.
2018 might be one of the quietest seasons in recent decades audit-wise. Since the IRS commissioners have to adjust to the Tax Cuts and Jobs Act, the audit forces will be cast mainly on the most questionable declarations with an annual income of $100,000. For example, a person earned a quarter of a million and gave the state several hundred dollars of tax. In general, the chance to get under review is estimated at 0.5% – 0.8%. The state is interested in having every American report their overseas earnings. This is especially associated with a little pleasant trend when celebrities get a second citizenship to evade taxes.
The IRS also reminds taxpayers that they must keep copies of their tax returns for the previous year for at least three years. Taxpayers, who file a tax return for the first time, should also register as an online taxpayer. However, taxpayers who use the same tax program they did last year won’t have to duplicate the data for the previous year and add an electronic signature for the 2017 tax declaration.
Assistance to taxpayers
The IRS reminds taxpayers that they have many options on how to get help when preparing a tax return on the official IRS website.
- The “Let Us Help You” page answers many questions.
- 70% of the country’s taxpayers are entitled to a free IRS file.
- Commercial partners of the IRS offer free proprietary software to about 100 million people and families with incomes of $66,000 or less.
- Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) offer free tax assistance to people who have the right to do so.
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