Tax season 2023: IRS advises early filers to consider filing an amended return if they reported tax refunds as taxable

Asher Notheis

April 12, 02:06 PM April 12, 02:06 PM

Taxpayers who jumped early on filing their taxes this year might want to file an amendment if they reported certain refunds they received last year as taxable.

The IRS issued a clarification in February regarding the federal tax status for special payments issued to taxpayers in several states last year, in which the agency determined that taxpayers in many states did not need to report these payments on their tax returns. Because of this, taxpayers who filed prior to this clarification on Feb. 10, as tax season started on Jan. 23, should check if filing an amendment is in order, the IRS announced Tuesday.

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The states where residents are not required to report these state payments on this year's tax return are California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island. For residents of Alaska, the only state payment they do not need to report on their 2022 taxes is the supplemental Energy Relief Payment they received.

Residents of Georgia, Massachusetts, South Carolina, and Virginia are also not required to include special state 2022 tax refunds as income under certain conditions. These conditions consist of if the payment residents received was a refund of state taxes paid, as well as if the recipient either claimed the standard deduction for the tax year 2022 or itemized their tax year 2022 deductions but did not receive a tax benefit.

Taxpayers who think they meet these requirements and filed prior to Feb. 10 should check their tax return to see if they paid tax on a state refund before filing an amended return. For taxpayers who used a tax professional when filing taxes, they should check with said professional to determine if filing an amended return is called for.

A taxpayer can also opt to send in a paper amendment, though they will not receive their refund through direct deposit and instead receive a paper check.

Taxes are due on April 18, not April 15, due to it falling on a weekend this year. In addition, April 17 is recognized as Emancipation Day in Washington, D.C., and all Washington holidays affect tax deadlines across the United States, meaning that tax returns will be due on the following business day, April 18.

Taxpayers who are awaiting their refund can check online using the IRS's "Where's my refund" tool, which is free to use.

Tax Season 2023: IRS warns of questionable tax preparers ahead of tax filing deadline

Asher Notheis

March 28, 04:26 PM March 28, 04:27 PM

With the end of this year's tax deadline in sight, the Internal Revenue Service has increased its warnings regarding scams targeting taxpayers, this time with its latest alert on "unscrupulous" tax return preparers.

When dealing with these types of tax preparers, taxpayers should keep their eyes peeled for any potential warning signs, which include preparers charging taxpayers a fee based on the size of their refund and "ghost" preparers refusing to sign the tax return or asking taxpayers to sign a blank return. To ensure one's information is secure, a person should rely on a trusted tax professional with their taxes, the IRS advised Monday.

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"Most tax professionals offer excellent advice and can really help people navigate complex tax issues," IRS Commissioner Danny Werfel said. "But we continue to see instances where taxpayers are 'ghosted' by unscrupulous tax preparers with bad advice who quickly disappear. We encourage taxpayers to check out the tools and resources available to them to ensure they find the right tax professional for their needs."

When choosing a tax preparer this year, taxpayers should check several things before selecting who will prepare their taxes, including if the professional has an IRS preparer tax identification number, which is required for them to prepare taxes. Ultimately, the best tax preparer comes down to what the taxpayer needs and should be selected on a case-by-case basis.

This latest warning from the IRS is a continuation of its "Dirty Dozen" series that it has been doing to warn taxpayers of scams that proliferate during tax season. Previous warnings by the IRS in this series include warnings of phishing emails and scammers offering "help" to set up an online IRS account.

Federal tax returns are due by April 18 this year. This deadline also applies to filing for an extension to file one's taxes.

More information on the tax scams the IRS has warned about can be found on the IRS's website.

Tax Season 2023: Steps to take to make tax filing easier

Asher Notheis

March 07, 01:30 PM March 07, 01:30 PM

Tax season is often considered one of the most stressful times of the year, but there are some steps taxpayers can take to help minimize stress when filing taxes this year.

Taxes are due this year on April 18 for a majority of taxpayers, leaving most taxpayers with only six weeks left to finish their tax filing. For any taxpayers who are in the middle of filing their 2022 taxes or for those who have yet to start, taking these steps can help alleviate the stress that comes with filing taxes, according to Barron's.

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"If taxpayers can improve efficiencies on their end, it will help the timeliness in not only submitting a return but in having it processed and getting a refund," said Brooke May, a managing partner at the financial planner Evans May Wealth.

File for an extension

If a taxpayer has an extension to file their taxes but still files them before the April 18 deadline, the taxpayer can simply refile their taxes if they realize information on their returns needs correction.

Taxpayers filing for an extension on their tax returns will be given until Oct. 15 this year to file their taxes; taxpayers should know, however, that receiving an extension to file taxes does not delay the due date of when they need to pay their taxes.

Open an IRS account

Taxpayers who have their own IRS account can have access to all of their personal tax records needed when filing taxes, such as their adjusted gross income and digital copies of notices from the IRS. This information can also save taxpayers time from having to call the IRS to answer any questions they might have, as they may be able to find the answers to their questions via the information in their accounts.

Call the IRS early in the morning

The early bird tends to get the worm, and the early riser has a better chance of contacting someone at the IRS.

In 2022, only 13% of people calling the IRS were able to make contact with someone at the agency, according to the Taxpayer Advocate Service, an office within the IRS.

Though the IRS has its call hours of availability from 7 a.m. to 7 p.m., the hold times for callers who call between 7 a.m. to 9 a.m. "seem to be shorter," said Angela Anderson, an accountant in Atlanta.

Check what forms can be e-filed

Though not all tax forms can be accepted by the IRS electronically, the agency is working to expand the range of documents that can be filed electronically. In March, the IRS announced that nine notices regarding child tax credits and earned tax income credits can finally be shared with the IRS electronically.

Additionally, amended tax returns can also be filed electronically so long as the original tax return was filed electronically as well. In cases where the original tax return was filed via the mail, the amended return must also be filed in the same way.

Establish a paper trail

Taxpayers who wish to avoid a worst-case scenario this tax season, such as their tax return getting lost in the mail, ought to keep copies of all of their mailings regarding tax returns. Additionally, taxpayers should send their returns via certified mail and also specify on their check what the payment is for, as recommended by Michael Kramarz, a director at Kaufman Rossin Tax Services Advisory Group.

"You have to maintain documentation to establish your original filing date," Kramarz said.

Stimulus update: One-time $800 tax rebate payments to be sent out within next 18 days in South Carolina

Asher Notheis

December 13, 01:40 PM December 13, 01:40 PM

South Carolina residents who have filed their 2021 tax returns will be eligible to receive a rebate of up to $800.

The amount a resident will receive from this rebate will be based on his or her 2021 tax liability. For people whose tax liability is less than $800, their rebate will be equal to their tax liability, while filers with a tax liability equal to or over $800 will receive exactly $800, according to the South Carolina Department of Revenue.

Tax liability is defined as what is left after subtracting a filer's credits from the Individual Income Tax that they owe. The Department of Revenue has capped the highest amount that people can receive from this rebate to $800, according to state legislation.

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People who have filed their 2021 SC Individual Income Tax Return, or SC1040, by Oct. 17 will receive this rebate before the end of the year. Anyone who received a 2021 refund by direct deposit will receive this rebate in the same bank account.

Paper checks will be mailed out to people if they notified the department of a change in their banking information by Nov. 1, received their 2021 refund by debit card or paper check, got their 2021 refund by direct deposit to a prepaid or pay-as-you-go debit card, had a balance due and did not receive a refund, or received their 2021 refund using a tax preparer's account.

Rebates can be tracked online, though filers will need either their Social Security number or the Individual Taxpayer Identification Number from their 2021 SC1040. Additionally, they will also need line 10 from the SC1040 card.

People who file their returns after Oct. 17 have until Feb. 15 of next year to file their returns to receive this rebate. They will then receive their rebate in March 2023.

Several states and cities are trying various solutions to provide relief to residents who are struggling with surging prices on nearly all products due to persistently high inflation.

Biden risks 'failure' on beefing up IRS for one big reason, former chiefs say

Katherine Doyle

October 20, 05:00 AM October 20, 05:00 AM

Former Internal Revenue Service commissioners are urging President Joe Biden to nominate a replacement to lead the agency before the term of current chief Charles Rettig expires next month, warning that a void at the top risks harming the agency’s performance at a sensitive time.

The delay could hamper Biden’s controversial overhaul of the IRS, which promises sweeping technology improvements for taxpayers and new resources to target tax cheats as part of the president’s plan to increase tax revenue over the next 10 years. It also poses a reputational risk to the agency as it prepares to deploy billions of dollars in new federal funding.

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“Not very long in the future, anybody, realistically, is going to be asking what are the improvements that are visible that the IRS is making now that we’ve provided funds,” said Charles Rossotti, IRS commissioner under Presidents Bill Clinton and George W. Bush.

“People think the IRS [is] like a machine that runs by itself,” Rossotti said. “It doesn’t. They’ll do the same thing tomorrow that they did today. But that’s not what’s expected when you provide a large increase in funding, and the funding was put there to improve performance.”

Republicans in Congress have already vowed to reverse the $80 billion budget infusion the IRS received from Democrats’ reconciliation bill this summer, questioning the agency’s promise to target “wealthy tax cheats” only.

Rossotti and former commissioners Fred Goldberg, Mark Everson, and John Koskinen issued a statement this week warning that “[u]ntil the position is filled, essential improvements to the IRS are at serious risk of delay, if not failure.” They were joined in the statement by Nina Olson, a former national taxpayer advocate for nearly two decades.

Rettig, appointed by former President Donald Trump, will finish his term on Nov. 12. His replacement will require Senate confirmation, one of two roles at the agency that Congress must approve. The second is the commissioner’s attorney post, which has been vacant since Biden was elected.

Lawrence Gibbs, a former IRS commissioner under Presidents Ronald Reagan and George H. W. Bush, said there is little hope of reforming the agency with no one at the helm.

“The organization, the IRS itself, responds to the guidance, the direction, the leadership of both the commissioner and the IRS chief counsel,” Gibbs told the Washington Examiner. “During the times you’ve had acting commissioners and acting chief counsels, the organization has just treaded water until a new commissioner and a new chief counsel could be appointed.”

He continued: “It takes a commissioner, and chief counsel that are appointed and confirmed to deal with the Congress, the rest of the administration, taxpayer organizations, media, all of the things that mold how the Internal Revenue Service is viewed, and that’s important in terms of people’s willingness to comply, and the ability of the organization to perform.”

Gibbs said this performance is crucial to the agency’s ability to help fund the government. “When we have a national debt that is in excess of our gross domestic product, ensuring that the revenue system works and works well, that’s got to be one of the priorities.”

The White House is preparing for turnover among some Cabinet and Cabinet-adjacent staff after the midterm elections, with two trusted advisers returning to scout out new appointees. But after Democrats’ yearslong push to increase the agency’s power and resources, the nomination delay has prompted questions about the administration’s focus.

Biden’s press secretary this week said she had nothing to share about a potential future nominee and disputed that the timeline would hurt the administration’s plans.

“It’s not going to slow down the overhaul of the agency,” Karine Jean-Pierre said. “We take this very seriously.”

The former commissioners told the Washington Examiner that they were not appeased by the response. While they support the increased spending, the Biden administration’s lack of action is worrying, they said.

“We are less than a month away. And we’ve heard nothing from the administration,” Gibbs said. “No names are being rumored at the present time. There’s silence.”

“It’s already October, and nothing has happened,” said Rossotti. “We all agree [the IRS] needs to be transformed and brought into the 21st century. We all believe it is possible to do this. But not without somebody in charge.”

Tax credit rating 2022: Deadline for Maryland inhabitants to claim $1,000 university student mortgage relief 12 times away

Rachel Schilke

September 03, 09:00 AM September 03, 09:00 AM

Maryland residents on the lookout to claim student personal loan financial debt reduction must do so in less than two weeks.

Suitable individuals have until Sept. 15 to utilize for a Pupil Bank loan Debt Reduction Tax Credit rating of up to $1,000. The credit's intention is to aid inhabitants of the Chesapeake Bay point out who took out faculty loans.

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To qualify for the tax credit history, applicants who attended a Maryland establishment need to have submitted their state profits taxes and have a university student financial loan of at minimum $20,000 whilst sustaining $5,000 or a lot more in unpaid credit card debt, in accordance to a Southern Maryland Chronicle report. Recipients do not will need to have graduated from faculty to qualify for the credit score.

Out-of-state candidates are qualified as perfectly but may possibly not acquire as substantial of a credit history. Recipients should also show the credit history will go towards paying financial loans, the report stated, or else they may perhaps have to pay the entire total of the credit history.

The tax credit score program, in location considering the fact that 2017, has assisted above 40,000 Maryland citizens. In 2021, about 9,155 state citizens received the credit, with all those who attended in-condition institutions acquiring $1,067. All those attending out-of-point out establishments obtained $875, according to the report.

“Going to college may possibly feel out of achieve for several Marylanders specified the big expense, but tax credits like these enable make it possible. I urge every person to utilize now ahead of time operates out,” Maryland Comptroller Peter Franchot reported in the report. “Any way to carry down the expense of greater instruction is a large gain."

Maryland is between a number of states trying to find to provide fiscal relief to people. States these as Connecticut, Illinois, New York, Pennsylvania, and Rhode Island set up tax rebates or a person-time immediate payments to citizens in several metropolitan areas.

Stimulus 2022: Virginia people can get up to $500 in tax rebates in Oct

Asher Notheis

August 12, 11:14 AM August 12, 11:14 AM

People dwelling in the state of Virginia will be able to assert a pair hundred extra bucks ahead of the calendar year is out.

The condition of Virginia is providing people who owe a tax liability from 2021 a rebate of up to $250 for folks who filed independently and up to $500 for joint filers. Anybody who has not submitted money taxes in 2022 is not suitable to receive this rebate, according to the state's Division of Taxation.

"Tax legal responsibility is the total of tax you owe through the year minus any credits (like the credit rating for taxes you paid out to another condition or the credit score for low money men and women), deductions, or subtractions," according to the section.

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If a individual owes cash to a state or area company, this sort of as providers for boy or girl aid, the tax office will use the person's rebate to pay out off the financial debt just before sending what is left to the filer. In the scenario in which all of the rebate is made use of to spend off a personal debt, the department will mail a letter to the filer informing them in which the funds was directed.

The deadline to file a person's taxes to be eligible for this rebate is Nov. 1. People eligible for this rebate who submitted by July 1 will have their rebate sent to them by Oct. 17, which will permit them to acquire it by Oct. 31.

Men and women who gained a tax refund by immediate deposit in 2022 will probably also obtain the rebate by immediate deposit in the exact financial institution account, with the description “VATXREBATE." Everybody else qualified for this rebate will acquire it by a paper check in the mail, even though filers are asked to make absolutely sure their mailing deal with is up to day by Aug. 15.

The a single-time rebates, funded with surplus revenues in the point out, had been created probable soon after a program for them was accepted in June as portion of the state's spending plan. Then-Virginia Gov. Ralph Northam experienced integrated the plan for the rebates in his closing funds proposal in advance of leaving office at the start of 2022, in accordance to the Virginia Mercury.

Gov. Glenn Youngkin signed the laws in June after it was handed by the Virginia Standard Assembly with bipartisan guidance.