tax return | Nesteggg Accounting

Where’s My Return?

There are now several ways to check your refund and check to make sure the IRS has actually received your filing.

Use IRS.gov directly for information on your return

About 24 hours after filing the IRS acknowledges receipt of an electronically filed tax return and up to four weeks after a taxpayer mails a paper return.

Just go to IRS.gov and clicking on Get Your Refund Status to access the Where’s My Refund? tool. The Where’s My Refund? tool updates once every 24 hours, usually overnight, so taxpayers only need to check once a day.

The IRS even has a mobile app now where you can check refund status, make a payment, and find free tax prep help. Go to IRS2Go app to download.

Taxpayers will need three things to use these tools:

Social Security number
Tax filing status
The exact amount of the refund claimed on their tax return

Once the taxpayer enters that information the tool will display the progress of their tax return through the following stages:

Return received
Return approved
Refund sent

And remember when seeking information go directly to the IRS app, IRS2Go or use the official Where’s My Refund? tool at IRS.gov. Avoid scammers who may create look-alike sites in an attempt to steal sensitive personal information by never clicking on links in emails or believe unsolicited phone calls. Be wary of search engine results or links to refund sites they receive by email or text. Be safe and go directly to IRS.gov for all your needs. The IRS will always mail you a letter and give you time to respond.

When to call the IRS:

It has been 21 days or more since you have electronically filed your tax return
It has been more than six weeks since you mailed your return
When the Where’s My Refund? results tell you to contact the IRS

Premium Tax Credits

If you purchase health insurance on the Health Insurance Marketplace, you must file Form 8962

If you got help paying for your health insurance premiums you may need to file this form

If you have purchased your health insurance on the Health Insurance Marketplace and got a reduction in payments then you got a Premium Tax Payment. And that must be accounted for on your tax return. Failing to file Form 8962, Premium Tax Credit, to reconcile 2019 advance payments of the premium tax credit may affect return processing, and delay the taxpayer’s refund. You may also not be eligible for advance payments of the premium tax credit in the future if you fail to file the form with your return.

What is the premium tax credit?

The premium tax credit helps pay for health insurance coverage bought from the Health Insurance Marketplace. When the taxpayer or their family member applies for coverage, the marketplace estimates the amount of the premium tax credit they may be able to claim. This estimate is based on information the taxpayer provides about family size and projected household income. The taxpayer can then decide if they want to have all, some, or none of the credit paid directly to their insurance company. This option will lower their monthly payments.

Who is required to file Form 8962 to reconcile advance payments?

Taxpayers who have advance credit payments made on their behalf, are required to file Form 8962 with their income tax return. This will reconcile the amount of advance payments with the premium tax credit they may claim based on their actual household income and family size.

How do taxpayers know they received advance credit payments?

Taxpayers or members of their family who enrolled in health insurance coverage for 2019 through the marketplace should receive Form 1095-A, Health Insurance Marketplace Statement. This form shows the months of coverage and any APTC paid to the taxpayer’s insurance company.

This form also provides information to complete Form 8962. Taxpayers who have questions about the information on Form 1095-A, or about receiving it, should contact their marketplace directly. The IRS can’t answer questions about information on Form 1095-A or about missing or lost forms.

How does a taxpayer reconcile advance credit payments?

Filing electronically is the easiest way to file a complete and accurate tax return. Taxpayers who received advance credit payments must file a tax return to reconcile even if they otherwise don’t have to file.

Free File an Option

If you are a do-it-yourselfer when it comes to taxes the IRS has opened its IRS Free File – featuring brand-name online tax providers. The portal gives filers a number of options for filing their return online. And though the IRS will not begin reviewing returns until it officially opens the tax season on January 27th, most filers can begin their return now.

Taxpayers whose adjusted gross income was $69,000 or less in 2019 can do their taxes now. The Free File provider will submit the return once the IRS officially opens the 2020 tax filing season on January 27th.

This year the Free File partners are: 1040Now, Inc., ezTaxReturn.com (English and Spanish), FileYourTaxes.com, Free tax Returns.com, H&R Block, Intuit, On-Line Taxes, Inc., Tax ACT, TaxHawk, Inc. and TaxSlayer (English and Spanish).

Since its 2003 debut, Free File has served nearly 57 million taxpayers. Free File is a public-private partnership between the Internal Revenue Service and Free File Inc. (FFI), a consortium of tax software providers who make their Free File products available at IRS.gov/FreeFile.

E-filing Easy

E-file plus direct deposit yields fastest refunds

Whether getting taxes prepared or doing it yourself, e-file is easy

The IRS encourages taxpayers to file electronically. While a person can choose direct deposit whether they file their taxes on paper or electronically, a taxpayer who e-files will typically see their refund in less than 21 days. Taxpayers can track their refund using “Where’s My Refund?” on IRS.gov or by downloading the IRS2Go mobile app.

“Where’s My Refund?” is updated once daily, usually overnight, so there’s no reason to check more than once per day or call the IRS to get information about a refund. Taxpayers can check “Where’s My Refund?” within 24 hours after the IRS has received their e-filed return or four weeks after receipt of a mailed paper return. “Where’s My Refund?” has a tracker that displays progress through three stages: (1) Return Received, (2) Refund Approved, and (3) Refund Sent.

Whether through IRS Free File or commercially available software, electronic filing vastly reduces tax return errors, as the tax software does the calculations, flags common errors and prompts taxpayers for missing information.

Tips for Taxpayers Who Need to Amend a Return

Some taxpayers may need to amend their tax return

Taxpayers who discover an error after filing may need to amend their tax return. Taxpayers should file an amended return if there’s a change in filing status, income, deductions or credits.

The IRS may correct mathematical or clerical errors on a return. They also may accept returns without certain required forms or schedules. In these instances, there’s no need to file an amended return. [Read more…]

Ten things for taxpayers to think about when choosing a tax preparer

Ten things for taxpayers to think about when choosing a tax preparer

It’s the time of the year when many taxpayers choose a tax preparer to help file a tax return. These taxpayers should choose their tax return preparer wisely. This is because taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return.

Here are ten tips for taxpayers to remember when selecting a preparer:

Check the Preparer’s Qualifications. People can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool helps taxpayers find a tax return preparer with specific qualifications. The directory is a searchable and sortable listing of preparers.
Check the Preparer’s History. Taxpayers can ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, people can check with the State Board of Accountancy. For attorneys, they can check with the State Bar Association. For Enrolled Agents, taxpayers can go to the verify enrolled agent status page on IRS.gov or check the directory.
Ask about Service Fees. People should avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. When asking about a preparer’s services and fees, don’t give them tax documents, Social Security numbers or other information.
Ask to E-File. Taxpayers should make sure their preparer offers IRS e-file. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit.
Make Sure the Preparer is Available. Taxpayers may want to contact their preparer after this year’s April 15 due date. People should avoid fly-by-night preparers.
Provide Records and Receipts. Good preparers will ask to see a taxpayer’s records and receipts. They’ll ask questions to figure things like the total income, tax deductions and credits.
Never Sign a Blank Return. Taxpayers should not use a tax preparer who asks them to sign a blank tax form.
Review Before Signing. Before signing a tax return, the taxpayer should review it. They should ask questions if something is not clear. Taxpayers should feel comfortable with the accuracy of their return before they sign it. They should also make sure that their refund goes directly to them – not to the preparer’s bank account. The taxpayer should review the routing and bank account number on the completed return. The preparer should give you a copy of the completed tax return.
Ensure the Preparer Signs and Includes Their PTIN. All paid tax preparers must have a Preparer Tax Identification Number. By law, paid preparers must sign returns and include their PTIN.
Report Abusive Tax Preparers to the IRS. Most tax return preparers are honest and provide great service to their clients. However, some preparers are dishonest. People can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their return without the taxpayer’s consent, they should file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.

Here’s what taxpayers should consider when determining if they need to file

Here’s what taxpayers should consider when determining if they need to file

As people prepare to file their taxes, there are things to consider. They will want to determine if they need to file and the best way to do so.

For tax year 2018, all individual taxpayers will file using the new Form 1040. Forms 1040A and 1040EZ are no longer available. Taxpayers who previously filed these forms will now file Form 1040. The new Form 1040 uses a “building block” approach allowing individuals to add only the schedules they need to their 2018 federal tax return. Taxpayers with more complicated returns will need to complete one or more of the new Form 1040 Schedules. This group of taxpayers includes those who claim certain deductions or credits, or who owe additional taxes.

Individuals who filed their federal tax return electronically last year may not notice any changes, as the tax return preparation software will automatically use their answers to the tax questions to complete the Form 1040 and any needed schedules.

Here are three more things for people to keep in mind as they prepare to file their taxes:

Who is required to file. In most cases, income, filing status and age determine if a taxpayer must file a tax return. Other rules may apply if the taxpayer is self-employed or if they are a dependent of another person. For example, if a taxpayer is single and younger than age 65, they must file if their income was at least $12,000. There are other instances when a taxpayer must file. Taxpayers can visit IRS.gov/filing for more information.

Filing to get a refund. Even if a taxpayer doesn’t have to file, they should consider filing a tax return if they can get money back. If a taxpayer answers “yes” to any of these questions, they could be due a refund:

Did my employer withhold federal income tax from my pay?
Did I make estimated tax payments?
Did I overpay on my 2017 tax return and have it applied to 2018?
Am I eligible for certain refundable credits such as, the earned income tax credit

Taxpayers can file for free. Join the millions of Americans who safely file their taxes and save money using IRS Free File. Seventy percent of the nation’s taxpayers are eligible for IRS Free File. The IRS’s commercial partners offer free brand-name software to about 100 million individuals and families with incomes of $66,000 or less. Taxpayers who earned more can use Free File Fillable Forms. This option allows taxpayers to complete IRS forms electronically. It is best for those who are comfortable doing their own taxes.

Taxpayers can also use the Interactive Tax Assistant tool on IRS.gov to answer many tax questions.. They should look for “Do I need to file a return?” under general topics.

All taxpayers should keep a copy of their tax return. Taxpayers using a software product for the first time may need their adjusted gross income amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

What taxpayers should know about amending a tax return

What taxpayers should know about amending a tax return

Taxpayers who discover they made a mistake on their tax returns after filing can file an amended tax return to correct it. This includes things like changing the filing status, and correcting income, credits or deductions.

Here are some tips for taxpayers who need to amend a tax return.

Complete and mail the paper Form 1040X, Amended U.S. Individual Income Tax Return. Taxpayers must file an amended return on paper whether they filed the original return on paper or electronically. Filers should mail the Form 1040X to the address listed in the form’s instructions. However, taxpayers filing Form 1040X in response to a notice received from the IRS, should mail it to the address shown on the notice.
If taxpayers used other IRS forms or schedules to make changes, they should attach those schedules to their Form 1040X.
Taxpayers should not amend a tax return to correct math errors; the IRS will make the math corrections for the taxpayers.
Taxpayers should also not amend if they forgot to include a required form or schedule. The IRS will mail a request about the missing item.
Anyone amending tax returns for more than one year will need a separate 1040X for each tax year. They should mail each tax year’s Form 1040X in separate envelopes.
Taxpayers should wait for the refund from their original tax return before filing an amended return. They can cash the refund check from the original return before receiving any additional refund.
Taxpayers filing an amended return because they owe more tax should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges.
Generally, to claim a refund, taxpayers must file a Form 1040X within three years from the date they timely filed their original tax return or within two years from the date the person pays the tax – usually April 15 – whichever is later.
Taxpayers can track the status of an amended return three weeks after mailing using “Where’s My Amended Return?” Processing can take up to 16 weeks.

IRS offers guidance on recent 529 education savings plan changes

IRS offers guidance on recent 529 education savings plan changes

WASHINGTON — The Internal Revenue Service and Department of the Treasury today announced their intent to issue regulations on three recent tax law changes affecting popular 529 education savings plans.

Notice 2018-58, addresses a change included in the 2015 Protecting Americans From Tax Hikes (PATH) Act, and two changes included in the 2017 Tax Cuts and Jobs Act (TCJA). Taxpayers, beneficiaries, and administrators of 529 and Achieving a Better Life Experience (ABLE) programs can rely on the rules described in this notice until the Treasury Department and IRS issue regulations clarifying these three changes.

Tuition refunds

The PATH Act change added a special rule for a beneficiary of a 529 plan, usually a student, who receives a refund of tuition or other qualified education expenses. This can occur when a student drops a class mid-semester. If the beneficiary recontributes the refund to any of his or her 529 plans within 60 days, the refund is tax-free.

The Treasury Department and the IRS intend to issue future regulations simplifying the tax treatment of these transactions. Re-contributions would not count against the plan’s contribution limit.

K-12 education

One of the TCJA changes allows distributions from 529 plans to be used to pay up to a total of $10,000 of tuition per beneficiary (regardless of the number of contributing plans) each year at an elementary or secondary (k-12) public, private or religious school of the beneficiary’s choosing.

Rollovers to an ABLE account

The second TCJA change allows funds to be rolled over from a designated beneficiary’s 529 plan to an ABLE account for the same beneficiary or a family member. ABLE accounts are tax-favored accounts for certain people who become disabled before age 26, designed to enable these people and their families to save and pay for disability-related expenses.

The regulations would provide that rollovers from 529 plans, together with any contributions made to the designated beneficiary’s ABLE account (other than certain permitted contributions of the designated beneficiary’s compensation) cannot exceed the annual ABLE contribution limit — $15,000 for 2018. For more information about other TCJA provisions, visit IRS.gov/taxreform.

Reminder for extension filers: Oct. 15 is just around the corner

Reminder for extension filers: Oct. 15 is just around the corner

Monday, October 15, 2018, is the extension deadline for most taxpayers who requested an extra six months to file their 2017 tax return.

For taxpayers who have not yet filed, here are a few tips to keep in mind about the extension deadline and taxes:

Try IRS Free File or e-file. Taxpayers can still e-file returns for free using IRS Free File. The program is available only on IRS.gov. Filing electronically is the easiest, safest and most accurate way to file taxes.
Use direct deposit. For taxpayers getting a refund, the fastest way to get it is to combine direct deposit and e-file.
Use IRS online payment options. Taxpayers who owe taxes should consider using IRS Direct Pay. It’s a simple, quick and free way to pay from a checking or savings account. There are other online payment options.
Don’t overlook tax benefits. Taxpayers should be sure to claim all entitled tax credits and deductions. These may include income and savings credits and education credits.
Keep a copy of the tax return. Taxpayers should keep copies of tax returns and all supporting documents for at least three years. This will help when adjusting withholding, making estimated tax payments and filing next year’s return.
File by October 15. File on time to avoid a potential late filing penalty.
More time for the military. Military members and those serving in a combat zone generally get more time to file. Military members typically have until at least 180 days after leaving a combat zone to both file returns and pay any tax due.