IRS Changes Could Affect Your 2017 Tax Refund
We encourage all taxpayers to conduct a mid-year tax withholding checkup. The Internal Revenue Service has recently announced several factors that could impact your refund in 2017. Taking a closer look at current withholdings can help you ensure the right amount is withheld; anticipate refund delays; and avoid an unexpected tax bill next year.
PATH Act May Impact Early Filers
Beginning in 2017, a new tax law will cause refund delays for early-filers claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). The Protecting Americans from Tax Hikes (PATH) Act now requires the IRS to hold the entire refund, including the portion not associated with the EITC and ACTA, until at least February 15th.
John Koskinen, IRS Commissioner, shares, “With these changes, it makes good sense on many different levels to check on your withholding and plan ahead for next tax season. 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.”
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.
Tax Fraud Security Could Cause Refund Delays
The IRS will be implementing additional safeguards to better detect and prevent identity fraud during the 2017 filing season. These enhanced security measures could delay the release of refunds filed by legitimate taxpayers. We strongly encourage taxpayers to check their withholdings now, so you have enough time to adjust your tax strategy before end of year.
“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.”
Report Changes to Advance Premium Tax Credits
The IRS also offers an important reminder for taxpayers who receive advance payments of the Premium Tax Credit under the Affordable Care Act. The agency shares, “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.”
For more information, visit: IRS Urges Taxpayers to Check Their Withholding.