Are you Ready to File your 2017 Tax Returns? by Angie Adames, CPA
Posted on February 26, 2018 by Angie Adames
The IRS has begun accepting tax returns for the 2017 tax year, for which the agency expects to receive nearly 155 million returns. To ensure the smooth and efficient processing of your return and any refund you are due, the IRS recommends that taxpayers take the following steps:
Know the Deadlines
The 2017 individual tax-filing deadline is Tuesday, April 17, 2018. Taxpayers may request an extension by that date to file no later than Oct. 15, 2018.
Before filing tax returns, individuals should take the time to ensure that they have all of the appropriate year-end statements in hand from their employers, their banks, their financial advisors and others who share income and tax information with the IRS. Following are just some of the most common forms taxpayers will need to file their tax returns for 2017. If you do not receive these forms by the end of February, contact the issuer, whether it be an employer, a bank or other financial institution, before reaching out to the IRS.
- Employer Form W-2 reports the annual wages and benefits you receive as an employee as well as the taxes withheld from your pay and paid on your behalf directly to the IRS
- Employer Form 1095-C reports whether or not you were covered by health insurance during every month of the year
- Forms 1098-E and 1098-T details the amount of tax-deductible student loan interest and tuition and fees you paid, respectively
- Form 1099-DIV reports the dividends your investments paid to you and the capital gains and distributions you received from those investments
- Form 1099-INT is issued by banks and financial institutions to report any interest exceeding $10 that was paid to you from interest-bearing accounts.
- Form 1099-MISC reports the amount of non-employee compensation you received from working as a freelancer or independent contractor as well as rent and royalties paid to you
- Form 1099-R details the distributions you may have taken from pensions and retirement accounts
In addition to these tax-related forms, individuals should be gathering documentation to demonstrate charitable deductions, medical expenses and other items that may claim to reduce their taxable income for the year.
Remember the New Tax Extenders
On February 9, the president signed into law a 2018 budget that retroactively extends into 2017 more than 30 tax provisions that expired at the end of 2016. Included on this list of tax extenders that individuals should address on their 2017 tax returns are an above-the-line deduction for qualified tuition and related expenses, and the ability to exclude from gross income the discharge of qualified principal residence of qualified principal residence indebtedness (often, foreclosure-related debt forgiveness).
Choose E-file and Direct Deposit
The safest and most accurate way to file a tax return is electronically. Similarly, using direct deposit will expedite the receipt of any tax refund directly into your bank account. Yet, the IRS reminds taxpayers claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) that they should not expect to receive a refund until after February 27.
Renew Expiring ITINs
Individuals who have U.S. tax filing or income reporting obligations but are not eligible for a Social Security number (SSN) are issued Individual Taxpayer Identification Numbers (ITINs) that must be kept up-to-date. ITINs with the middle digits 70, 71, 72 and 80 expired at the end of 2017. Affected individuals must file IRS Form W-7 to renew their ITIN before filing their tax returns for 2017 and note that the process could take as long as 11 weeks to receive an ITIN assignment letter.
Get Professional Tax Help
The tax laws are complicated and rife with a number of exceptions, limitations and other challenges that can make it difficult for individuals to file accurate annual returns and compute their tax liabilities. By engaging the knowledge and experience of a certified public accountant (CPA) and professional tax advisory firm, individuals can more easily comply with tax laws while minimizing their income tax liabilities.
About the Author: Angie Adames, CPA, is an associate director of Tax Services with Berkowitz Pollack Brant, where she provides tax and consulting services to real estate companies, manufacturers and closely held business. She can be reached at the firm’s Miami office at (305) 379-7000 or via email at email@example.com.