This is the sixth in a
series of reminders to help taxpayers prepare for the upcoming tax filing
season.
As tax filing season approaches, the Internal Revenue Service
reminds taxpayers there are things they should do now to get ready for filing
season.
For most taxpayers, Dec. 31 is the last day to take actions that will impact
their 2017 tax returns. For example, charitable contributions are deductible in
the year made. Donations charged to a credit card before the end of 2017 count
for the 2017 tax year, even if the bill isn’t paid until 2018. Checks to a
charity count for 2017 as long as they are mailed by the last day of the year.
Taxpayers who are over age 70 ½ are generally required to receive payments
from their individual retirement accounts and workplace retirement plans by the
end of 2017, though a special rule allows those who reached 70 ½ in 2017 to
wait until April 1, 2018, to receive them.
Most workplace retirement account contributions should be made by the end of
the year, but taxpayers can make 2017 IRA contributions until April 18, 2018.
For 2018, the limit for a 401(k) is $18,500. For traditional and Roth IRAs, the
limit is $6,500 if age 50 or older and up to $15,500 for a Simple IRA for age
50 or older. Check IRS.gov for more
information
about cost-of-living adjustments affecting dollar limitations for pension plans
and other retirement-related items for tax year 2018.
Taxpayers should be careful not to count on getting a refund by a certain
date, especially when making major purchases or paying other financial
obligations. Taxpayers can take steps now to make sure the IRS can process
their return next year.
Taxpayers who have moved should tell the US Postal Service, employers and
the IRS. To notify the IRS, mail IRS Form 8822, Change of Address, to the
address listed on the form’s instructions. For taxpayers who purchase health
insurance through the Health Insurance Marketplace, they should also notify the
Marketplace when they move out of the area covered by their current Marketplace
plan.
For name changes due to marriage or divorce, notify the Social Security
Administration so the new name will match IRS and SSA records. Also notify the
SSA if a dependent’s name changed. A mismatch between the name shown on
your tax return and the SSA records can cause problems in the processing of a
return and may even delay a refund.
Some refunds cannot be issued before mid-February. By law, the IRS cannot
issue refunds before mid-February for tax returns that claim the Earned Income
Tax Credit or the Additional Child Tax Credit. The IRS expects the earliest
EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit
cards starting on Feb 27, 2018, if they chose direct deposit and there are no
other issues with the tax return.
Some Individual Taxpayer Identification Numbers must be renewed. Any
Individual Taxpayer Identification Number not used on a tax return at least
once in the past three years will expire on December 31, 2017. Additionally,
all ITINs issued before 2013 with middle digits of 70, 71, 72 or 80 (Example: 9XX-70-XXXX)
will also expire at the end of the year. As a reminder, ITINs with middle
digits 78 and 79 that expired in 2016 can also be renewed. Only taxpayers who
need to file a U.S. federal tax return or are claiming a refund in 2018 must
renew their expired ITINs. Affected ITIN holders can avoid delays by starting
the renewal process now.
Those who fail to renew before filing a return could face a delayed refund
and may be ineligible for some important tax credits. More information,
including answers to frequently asked questions is available on
IRS.gov/ITIN.
Keeping copies of tax returns is important. Taxpayers may need a copy of
their 2016 tax return to make it easier to fill out a 2017 tax return. Some
taxpayers using a software product for the first time may need to provide their
2016 Adjusted Gross Income, or AGI, to e-file their 2017 tax return.
The IRS has a
special
page on IRS.gov with steps to take now for the 2018 tax filing season.
