Get ready today to file your 2016 federal income tax return.
Print Publication 5273, Take Steps Now For Tax Filing Season
Individual Tax Identification Number (ITIN)
What You Need to Know
- Processing delays are likely for filers with expired Individual Tax Identification Numbers.
- There are two reasons an ITIN would expire December 31, 2016:
- If you have not used your ITIN on a U.S. tax return at least once for tax years 2013, 2014 or 2015 or
- If your ITIN has the middle digits 78 or 79 (9NN-78-NNNN or 9NN-79-NNNN)
What You Need to Do
- You can renew your ITIN now if it expired and you plan to use it on a U.S. tax return.
- No action is needed by expired ITIN holders who don’t need to file a tax return next year.
- There are new documentation requirements when applying for or renewing an ITIN for certain dependents.
- To avoid delays, ensure accurate W-7 and valid ID documents are submitted.
- Find more information at IRS.gov/ITIN.
What You Need to Know
- Expecting a refund? Some refunds must be held until February 15.
The IRS will begin to release EITC/ACTC refunds starting February 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or on debit cards until the week of February 27. Read more about refund timing for early EITC/ACTC filers.
What You Need to Do
Be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations.
- You don’t need to wait until February 15 to file your tax return. While the IRS must hold the refund until February 15, it will begin taking the steps it normally does to process your tax return once the filing season starts.
- File a complete and accurate return and include all known refundable credits with your original return.
Adjusted Gross Income (AGI)
What You Need to Know
Some taxpayers using a software product for the first time may need to know their 2015 Adjusted Gross Income, or AGI, to e-file their 2016 tax return.
- When self-preparing your taxes and filing electronically, you must sign and validate your electronic tax return by entering your prior-year AGI or your prior-year Self-Select PIN. Using an electronic filing PIN is no longer an option.
What You Need to Do
- If you have a copy of your 2015 federal income tax return, your AGI is on line 37 of the Form 1040; line 21 on the Form 1040-A or line 4 on the Form 1040-EZ.x
Learn more about how to verify your identity and electronically sign your tax return at Validating Your Electronically Filed Tax Return
What You Need to Know
- To better protect taxpayers, the IRS recently upgraded its identity verification process for certain online self-help tools. The purpose is to prevent taxpayer impersonations and account takeovers by identity thieves.
What You Need to Do
- Because the Secure Access platform is more rigorous, it helps if you prepare to register in advance.
The new authentication is currently being applied to Get Transcript Online.
What You Need to Know
- All IRS Taxpayer Assistance Centers now operate by appointment only.
- Many questions can be resolved on the IRS.gov website without visiting a TAC.
What You Need to Do
- Start with IRS.gov for help including tools, filing options and other services and resources.
- If you believe your tax issue cannot be handled online or by phone, always check IRS.gov for days and hours of service as well as services offered at the IRS TAC location you plan to visit. For most services you must call to make an appointment.
IRS Gives Expanded Tax Relief to Victims of Hurricane Matthew; Parts of Four Eligible States Have Until March 15 to File
WASHINGTON –– Hurricane Matthew victims in much of North Carolina and parts of South Carolina, Georgia and Florida have until March 15, 2017, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today. This includes an additional filing extension for those with valid extensions that run out at midnight tonight, Oct. 17.
The IRS is now offering this expanded relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for either individual assistance or public assistance. Moreover, taxpayers in counties added later to the disaster area will automatically receive the same filing and payment relief.
The IRS is taking this step due to the unusual factors involving Hurricane Matthew and the interaction with the Oct. 17 extension deadline.
The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 4, 2016. As a result, affected individuals and businesses will have until March 15, 2017, to file returns and pay any taxes that were originally due during this period. This includes the Jan. 17 deadline for making quarterly estimated tax payments. For individual tax filers, it also includes 2015 income tax returns that received a tax-filing extension until today, Oct. 17, 2016. The IRS noted, however, that because tax payments related to these 2015 returns were originally due on April 18, 2016, those are not eligible for this relief.
A variety of business tax deadlines are also affected including the Oct. 31 and Jan. 31 deadlines for quarterly payroll and excise tax returns. It also includes the special March 1 deadline that applies to farmers and fishermen who choose to forgo making quarterly estimated tax payments.
In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due on or after Oct. 4 and before Oct. 19 if the deposits are made by Oct. 19, 2016. Details on available relief can be found on the disaster relief page on IRS.gov.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2016 return normally filed next year), or the return for the prior year (2015). See Publication 547 for details.
Currently, the following areas are eligible for relief:
North Carolina: Beaufort, Bertie, Bladen, Brunswick, Camden, Carteret, Chowan, Columbus, Craven, Cumberland, Currituck, Dare, Duplin, Edgecombe, Gates, Greene, Harnett, Hoke, Hyde, Johnston, Jones, Lenoir, Martin, Nash, New Hanover, Onslow, Pamlico, Pasquotank, Pender, Perquimans, Pitt, Robeson, Sampson, Tyrrell, Washington, Wayne and Wilson counties.
South Carolina: Beaufort, Berkeley, Charleston, Colleton, Darlington, Dillon, Dorchester, Florence, Georgetown, Horry, Jasper, Marion, Orangeburg and Williamsburg counties.
Georgia: Bryan, Camden, Chatham, Glynn, Liberty and McIntosh counties.
Florida: Brevard, Duval, Flagler, Indian River, Nassau, St. Johns, St. Lucie and Volusia counties.
The tax relief is part of a coordinated federal response to the damage caused by severe storms and flooding and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.
IRS-2016-135, Oct. 17, 2016
After the most significant election in our nation’s history, the votes are in and Republican nominee, Donald Trump has been elected to become the 45th president of the United States. President-elect Trump’s tax plan looks to reduce taxes across the board, including making the business tax rate more competitive and creating new opportunities to grow our economy. Before any proposed changes can be made, they must be approved by Congress. See below to see how Trump’s plan compares to our current system.
|Corporate Tax Rates||Top rate of 35%||Top rate of 15%|
|Alternative Minimum Tax||Applies to corporations||Eliminated|
|Pass-through Entities||Income taxed as ordinary income on individual tax return||Option to elect a flat tax of 15% on pass-through income|
|Capital Investments||Capitalized and depreciated||Option to expense or capitalize; If expensing, interest costs are non-deductible|
|Unrepatriated Earnings||Not taxed until brought back into US||One time tax of 10% of total unrepatriated earnings|
|Childcare Deductions||Employer-provided day care credit capped at $150,000||Employer provided day care credit capped at $500,000; Additional deduction for employer contributions to employee childcare costs|
|Corporate Tax Deductions/Credits||Includes Research and Development credit, Domestic Production Activities Deduction, etc||Eliminate except for Research and Development|
|Inversion Transactions||Foreign firms owned 80% or more by US shareholders are considered US firms for tax purposes||No specific proposal|
|Ordinary Income Rates||7 brackets with top rate of 39.6%||Single 12% $0-37,500 25% $37,500-112,500 33% over $112,500 Married 12% $0-75,000 25% $75,000-225,000 33% over $225,000 **Head of Household status is eliminated|
|Standard Deduction||$6,300 (single) $12,600 married) $9,300 (Head of Household)||$15,000 (single) $30, 000 (married) Head of Household eliminated|
|Personal Exemption||$4,050||Eliminated and included in the standard deduction|
|Itemized Deduction||Phase out begins: $259,400 (single) $311,300 (married)||Total itemized deductions capped at: $100,000 (single) $200,000 (married)|
|Like-kind Exchanges||Accrued under federal law||No specific proposal|
|Net Investment Income Tax||3.8% on AGI above: $200,000 (single) $250,000 (married)||Eliminated|
|Alternative Minimum Tax||AGI above: $200,000 (single) $250,000 (married) Trusts with income over $12,400||Eliminated|
|Capital Gains/Dividends Rates||Maximum rate of 20% with one year holding period||No change|
|Child/Dependent Care Expenses||Child/Dependent Care Credit limited for AGI over $43,000||Above the line deductions for children under age 13 and for care for elderly dependent; Dependent Care Savings Accounts (DCSA)- deductible $2,000 contribution every year|
|Carried Interest||Taxed at rates on capital gains||Taxed as ordinary income|
|Estate Tax||Exclusion of $5.45 million adjusted for inflation, top rate of 40%||Eliminated, Except for estates over $10 million which will be subject to capital gains tax|
|Gift Tax||Lifetime exclusion of $5.45 million adjusted for inflation; Annual exclusion of $14,000 per donee||Eliminated|
|Retirement Savings Contributions||No limit on lifetime contributions||No specific proposal|
UHY LLP. Certified Public Accountants. News Alert. UHY LLP News, 9 Nov. 2016. Web. 9 Nov. 2016.
Election Day is November 8th and it is anticipated that voter turnout will reach a record high. As a result, employers should prepare for an increase in the number of employees requesting time off to vote. Under what circumstances, if any, are Georgia employers required to grant this type of request? Read ahead to learn more.
In states where voting leave is required, state law dictates the conditions under which voting leave must be provided, if at all. The laws also set forth the amount of time that an employee must receive for this type of leave. As demonstrated below, depending on the state, the leave may be paid or unpaid.
In Georgia, while time-off to vote is unpaid, employees should be given the time necessary to vote, not to exceed two (2) hours. The employee must give a reasonable notice that they would like to take advantage of the time-off, and Georgia employers may schedule the hours in which each employee leaves the workplace to vote. Encouraging your employees to vote early is one way to minimize time taken off on November 8th.
For more specific information regarding Georgia voting, please see this excerpt from our HR Strategies handbook:
HR Strategies and your worksite employer encourage employees to participate in the political process by voting in public elections. In general, an employee who wishes to vote is expected to do so before or after his/her scheduled shift. However, the Company understands that there may be times when your work schedule might not leave you enough time outside of your shift to vote. If, on the day of any municipal, county, state or federal political party primary or election in which you are qualified and registered to vote, the polls open less than two hours before the start of your shift and close less than two hours after the end of your shift, you will be permitted to take, as necessary, up to two hours off work to vote. To be granted time off to vote, you must provide reasonable advance notice to your supervisor. In order to provide you with sufficient time to vote while minimizing business disruption, your supervisor/manager will specify the particular hours you may take off work to vote.
If you are not located in Georgia, we have provided a list of each state’s voting leave information. Whether an employer is required to grant employee’s request for time off to vote depends on the laws in the state in which the employee works. The below table shows which states provide voting leave and which states do not.
|No Voting Leave Provided||Unpaid Voting Leave||Paid Voting Leave|
|South Carolina||South Dakota|
|Washington DC||West Virginia|
|This article was prepared in conjunction with information provided by our Employment Practices Liability Insurance Provider.|
WASHINGTON — The Internal Revenue Service has an important reminder for taxpayers who filed for an extension and face an Oct. 17 filing deadline: the adjusted gross income (AGI) amount from your 2014 return may be needed to electronically file a tax return.
The IRS reminds all taxpayers that they should keep a copy of their tax returns and supporting documents for a minimum of three years. Going forward, keeping copies of tax returns is even more important as the IRS makes changes to protect taxpayers and authenticate their identity.
The IRS recommends extension filers using a software product for the first time plan ahead. They should locate a copy of their 2014 tax return or alternatively, order a tax transcript, a process that may take five to 10 calendar days. The adjusted gross income (AGI) is clearly labeled on both the tax return and the transcript
Taxpayers who prepare their own electronic tax returns are required to electronically sign their return by using a five-digit, self-selected personal identification number (PIN). In order to authenticate their identities, taxpayers will now also need to enter either of two items: their prior-year AGI or their prior-year self-select PIN and their date of birth. If married filing jointly, both taxpayers must authenticate their identities with this information.
The IRS is phasing out the use of the Electronic Filing PIN, which is no longer available as an alternative except for those taxpayers who had obtained an e-file PIN earlier this year. The IRS emphasizes that those filers may use their e-file PIN for this year only.
Generally, tax-preparation software automatically generates the prior-year AGI and/or self-select PIN for returning customers. However, taxpayers who are new to a software product must enter the prior-year AGI or prior-year self-select PIN themselves.
How to find AGI
The adjusted gross income is gross income minus certain adjustments. On the 2014 tax returns, the AGI is found on line 37 of Form 1040; line 21 on Form 1040A and line 4 on Form 1040EZ. Taxpayers who e-filed and did not keep a copy of their original 2014 tax return may be able to return to their prior-year software provider or tax preparer to obtain a copy.
Taxpayers who lack access to their prior-year tax returns also may go to irs.gov/transcript and use Get Transcript Online or Get Transcript by Mail. A transcript is a summary of the tax return or tax account. There are various types of transcripts, but the Tax Return Transcript works best. Look for the “Adjusted Gross Income” amount on the transcript.
Taxpayers must pass Secure Access authentication in order to access Get Transcript Online and immediately access their transcripts. Taxpayers who cannot pass Secure Access authentication should use Get Transcript by Mail or call 800-908-9946, and a transcript will be delivered to the home address within five to 10 calendar days.
IRS Urges Taxpayers to Check Their Withholding – New Factors Increase Importance of Mid-Year Check Up
WASHINGTON — The Internal Revenue Service today encouraged taxpayers to consider a mid-year tax withholding checkup following several new factors that could affect their refunds in 2017. Taking a closer look at the taxes being withheld can help ensure the right amount is withheld, either for tax refund purposes or to avoid an unexpected tax bill next year.
The withholding review takes on even more importance this year given a new tax law change that requires the IRS to hold refunds a few weeks for some early filers in 2017 claiming the Earned Income Tax Credit and the Additional Child Tax Credit. In addition, the IRS and state tax administrators continue to strengthen identity theft and refund fraud protections, which means some tax returns could again face additional review time next year to protect against fraud.
“With these changes, it makes good sense on many different levels to check on your withholding and plan ahead for next tax season,” said IRS Commissioner John Koskinen. “It’s a personal choice if you want to have extra money withheld to get a bigger tax refund, but you have options available if you prefer to have a smaller refund next year and more take-home money now.”
So far in 2016, the IRS has issued more than 102 million tax refunds out of 140 million total individual returns processed, with the average refund well over $2,700. Historically, the refund figure has increased over time in size.
By adjusting the Form W-4, Employee’s Withholding Allowance Certificate, taxpayers can ensure that the right amount is taken out of their pay throughout the year so that they don’t pay too much tax and have to wait until they file their tax return to get any refund. Employers use the form to figure the amount of federal income tax to be withheld from pay.
Some Refunds Delayed in 2017
When considering refund issues, the IRS wants taxpayers to be aware several factors could affect the timing of their tax refunds next year.
A major change will affect some early tax filers claiming two key credits who won’t see their refunds until after Feb. 15.
Beginning in 2017, a new law requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until mid-February. Under the change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act, the IRS must hold the entire refund — even the portion not associated with the EITC and ACTC — until at least Feb. 15. This change helps ensure that taxpayers get the refund they are owed by giving the agency more time to help detect and prevent fraud.
As in past years, the IRS will begin accepting and processing tax returns once the filing season begins. All taxpayers should file as usual, and tax return preparers should also submit returns as they normally do. Even though the IRS cannot issue refunds for some early filers until at least Feb. 15, the IRS reminds taxpayers that most refunds will still be issued within the normal timeframe: 21 days or less, after being accepted for processing by the IRS.
”This is an important change to be aware of for some taxpayers used to getting an early refund,” Koskinen said. “We’ll be focusing on awareness of this change throughout the fall, but it’s important for taxpayers who might be affected by this to be aware of the change for their planning purposes. Although we still expect to issue most refunds within 21 days, we don’t want people caught by surprise if they get their refund a few weeks later than previous years.”
Stronger Security Filters and Tax Refund Processing
As the IRS steps up its efforts to combat identity theft and tax refund fraud through its many processing filters, legitimate refund returns sometimes get delayed. While the IRS is working diligently to stop fraudulent refunds from being issued, it is also focused on releasing legitimate refunds as quickly as possible.
The IRS, state tax agencies and the private sector tax industry continue to work together to fight fraud through their unprecedented Security Summit partnership. Additional safeguards will be set in place for the upcoming 2017 filing season.
“These increased security screenings are invisible to most taxpayers,” Koskinen said. “But we want people to be aware we are taking additional steps to protect taxpayers from identity theft, and that sometimes means the real taxpayers face a slight delay in their refunds. As we continue improving our processes and working with the states and the tax industry, we will stop more fraud while also fine-tuning our tools to reduce the number of innocent taxpayers who might see a refund delay. “
The agency encourages taxpayers to check their tax withholding now. Whether they prefer more earned money during the year or a large refund, checking withholding can ensure people don’t receive an unexpected tax bill next year. Making these checks in the late summer or early fall can give taxpayers enough time to adjust their withholdings before the tax year ends in December.
Changes in Circumstances and Advance Premium Tax Credits
There are also some important reminders for taxpayers who receive advance payments of the Premium Tax Credit under the Affordable Care Act.
People who have advance payments of the premium tax credit made to their insurance company on their behalf should report life changes to their Marketplace. Changes in circumstances that should be reported include moving to a new address and changes to income or family size. Reporting these changes will help individuals avoid large differences between the advance credit payments and the amount of the premium tax credit allowed on their tax return, which may affect their refund or balance due.
People Working in the Shared Economy
The IRS encourages people in the shared economy who also have a job with an employer to take a close look at their withholding, which can help avoid unexpected tax issues with their income from such things as driving a car or renting a home.
Making a Withholding Adjustment
In many cases, a new Form W-4, Employee’s Withholding Allowance Certificate, is all that is needed to make an adjustment. Taxpayers submit it to their employer, and the employer uses the form to figure the amount of federal income tax to be withheld from pay
The IRS offers several online resources to help taxpayers bring taxes paid closer to what is owed. They are available anytime on IRS.gov. They include:
- IRS Withholding Calculator — Online tool helps determine the correct amount of tax to withhold.
- IRS Publication 505 — Tax Withholding and Estimated Tax.
- Tax Withholding — Complete information on withholding, estimated taxes, FAQs, more.
Self-employed taxpayers, including those involved in the sharing economy, can use the Form 1040-ES worksheet to correctly figure their estimated tax payments. If they also work for an employer, they can often forgo making these quarterly payments by instead having more tax taken out of their pay.
Founded in 1998, AmTrust Financial Services has earned an “A” (Excellent) Financial Size IX rating from A.M. Best, while continuing their commitment to excellence in providing property and casualty insurance for small to mid-sized businesses. AmTrust Financial Services offers a philosophy of niche diversity with a focus on low-hazard risk, with extensive underwriting experience and innovative and technology driven insurance products.
HR Strategies is pleased to have been a partner with AmTrust Financial Services, Inc. for the past 8 years to accommodate the Workers’ Compensation insurance needs of our clients.
It was just announced yesterday in the PEO Compass that AmTrust has become one of the 3rd largest providers of workers’ compensation in the country! Below is their official announcement on this tremendous accomplishment:
Dear Agent Partner,
We’re proud to relay that a recently released workers’ comp market share report conducted by Aon Benfield indicates that AmTrust is now the 3rd-largest workers’ comp carrier in the U.S.
This confirms similar findings in a report conducted in April this year by SNL Financial, which also ranked AmTrust as the 3rd largest workers’ comp carrier nationwide. These reports demonstrate our ongoing growth and committment to the workers’ comp market.
What’s more, AmTrust continues to experience unprecedented growth across all lines of businesses, including our Business owners Policy, Commercial Auto, EPLI and General Liability products, all of which serve as a perfect complement to our Workers’ Comp product. Recently, we introduced a new Cyber Liability product to cover the growing risk of a data breach for small businesses.
AmTrust’s financial strength and unprecedented growth signal a bright future ahead:
- “A” (Excellent) rating for financial strength by A.M. Best, financial size category (FSC) “XIV”
- Publicly traded on the NASDAQ Global Market under the stock symbol AFSI
- Ranked as best-managed insurance company in U.S. by Forbes magazine in 2014
- Innovative technology: Our web-based quote, binding and policy access system, AmTrust Online, is simple, efficient, accurate and available 24/7
For more information about how AmTrust can better serve your customers’ needs, please contact your regional sales manager or visit our website.
AmTrust North America