4 January tax moves to kick off Happy New Tax Year 2017

Hello, 2017. For some of us, you sure took your sweet time. Others think you arrived a tad too soon.

Few of us, however, are as ready to get our taxes as done-diddly-done as is Ned Flanders, Homer Simpson’s annoying cheery neighbor.

Ned Flanders_New Years tax geek_The Simpsons

If you click the image, you’ll see a GIF that gives you a good idea of Ned Flanders’ obsessive-compulsive tendencies.

While even a dedicated tax geek like myself thinks Neddie is a bit too filing gung-ho for the first day of the New Year, we all should take advantage of January’s 31 days to get our 2016 taxes in order and lay some groundwork for our 2017 taxes.

So, mustering as much Flandersesque exuberance as I can, here are four tax things to think about in January.

1. Get organized: Set up a collection point for the 2016 tax documents — W-2s, 1099s, year-end account statements, health insurance verification — you’ll soon be receiving. And move any tax material you already have — charity receipts, mileage records for business use of your car last year, estimated tax payment records — into this central tax filling receptacle.

It can be as simple as an accordion folder, with documents dropped into the appropriate slots. Or separate folders/envelopes holding the material. Or a filing cabinet drawer. Or if you’re totally digital, a special folder on your home computer.

Just get everything you have on hand together and get ready for the final docs you need. That way you can file your 2016 return quickly, easily and as soon as the Internal Revenue Service will accept it. That day is Monday, Jan. 23, the official start of the 2017 tax filing season.

2. Pay your estimated taxes: Speaking of dates, it’s another weird tax calendar in 2017.

The first deadline of the tax year is Jan. 17 instead of Jan. 15. This is the due date for your estimated tax payment for money you got September through December and no taxes were taken from it.

It’s two days later this year because the 15th is on Sunday and Monday the 16th is the federal Dr. Martin Luther King Jr. holiday. That pushes the deadline to file this fourth estimated tax payment to the next business day, Tuesday, Jan. 17.

The table below can help you mark your 2017 calendar for this year’s estimated tax payments.

Payment # Due Date* For income received in
1 April 15 Jan. 1 through March 31
2 June 15 April 1 through May 31
3 Sept. 15 June 1 through Aug. 31
4 Jan. 15 of the next year Sept. 1 through Dec. 31

*If the 15th is on weekend or federal holiday, the estimated payment is due the next business day. 

3. File early and possibly for free: While Jan. 23 is the day the Internal Revenue Service will start processing tax returns, both those electronically filed and the paper ones that some folks still insist on snail mailing, some filers might be able to get a head start.

If you’re eligible to use Free File, the IRS-tax software manufacturers’ partnership that offers free online tax preparation and e-filing, you can start using that option on Friday, Jan. 13. Pretty lucky, even for filers who are paraskevidekatriaphobic.

You can find a link to Free File on the IRS.gov home page. It’s open this year to taxpayers whose income is less than $64,000 regardless of filing status.

4. Be patient: Of course, as Isaac Newton probably said when he did his taxes, for every tax action, there’s an equal and opposite tax reaction.

Even if you file as soon as you can this month, you could find yourself waiting at least a couple of extra weeks to get your refund if you claim the additional child tax credit (ACTC) or Earned Income Tax Credit (EITC) or both.

A provision in the Protecting Americans from Tax Hikes, or PATH, Act that became law in late 2015 requires the IRS to hold refunds for returns that claim one or both of these two refundable tax credits until Feb. 15.

The reason? Lawmakers are concerned that some folks are faking these claims to get bigger refunds. There’s also the worry that tax identity thieves are using real filers’ data and these credits to file for fraudulent refunds.

The thinking is that with extra time to process such returns, the IRS can make sure all ACTC and EITC refund requests are legit.

And even though the mandated refund delay is mid-February, the IRS warns that when you take into account weekends and the President’s Day holiday, some affected filers may not have actual access to their refunds until the week of Feb. 27.

More moves this month: These four tax tips are just a few of the things to think about as we start a brand new tax year. You can find more January Tax Moves in over in the ol’ blog’s right column.

January_tax_moves_160They’re listed under the new countdown clock keeping track of how many days we have until our returns (or in my usual case, my extension request) must be on their way to the IRS in April.

As happened last year, calendar quirks in 2017 push the filing deadline once again to April 18. But we’ll worry about that in a couple of months.

For now, check out the January tips at your leisure, based on your personal filing situation and/or how coherent you are after ringing in 2017 earlier today.


Source: http://feedproxy.google.com/~r/DontMessWithTaxes/~3/p3gDAbGgrqA/january-2017-tax-moves.html

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