Already Time to Think about Taxes? Yes.July 18, 2015
Changes to Tax Rules Will Impact Many Filers
Not thinking about your taxes as you float on your raft or enjoy a summer picnic? Think again. There have been significant changes to the tax rules for 2015 that will impact many filers.
Some deductions we are used to taking expired at the end of 2014 and have not been renewed. Will they be? No-one knows. However, it is important to plan in case they are not. The more popular ones include the itemized deduction for state and local sales tax, above the line deduction for qualified tuition and related expenses, and the tax-free IRA distribution for charity.
The IRA rollover rules have also changed. Taxpayers are now limited to one tax-free IRA rollover per year regardless of how many IRAs they own. This rule does not apply to a trustee to trustee IRA rollover or to rollovers from qualified retirement plans to an IRA.
Increase in Penalties
Have you played the “pay my tax late” game because the penalties were not so bad? Well, the IRS has caught on to perpetual late filers and payers. The penalties are going up. IRS imposed penalties are now indexed to inflation including the failure to file and failure to pay penalties. Guess they want everyone to file and pay on time. Remember that an extension to file does not extend the time to pay. Interest and penalties are still accruing so make an estimated payment when you ask for the extension.
Electronic refunds are being limited due to the large amount of attempted tax fraud. Starting in 2015, there is a limit of three (3) refunds being deposited to any single financial account or pre-paid debit card. This won’t affect most of us but parent’s filing for themselves and their children may get caught and end up with paper refund checks.
IRS ALWAYS Initiates Contacts by Regular Mail
And always remember – THE IRS WILL NEVER INITIATE CONTACT BY E-MAIL OR TELEPHONE CALL. INITIAL CONTACT IS ALWAYS BY MAIL. HANG UP AND DELETE THOSE EMAILS.