ACA, cuts impact tax season

Published 9:18 pm Saturday, January 17, 2015

With employers starting to send out W2 forms, the IRS is reminding workers earning $60,000 or less about free e-filing available to them.

Seven in 10 taxpayers are eligible to prepare their return online using free, brand-name software, IRS spokesman Mark Hanson said.

The offer has been around since 2003. “We do see an upward trend” in people using it, according to Hanson, but “we still have our work cut out for us” in getting the word out.

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“Obviously, we’d like to see more people use it because so many people do qualify.”

For the first time, this year’s return will include new questions related to the federal health care law — the Affordable Care Act, or Obamacare.

More than three in every four taxpayers, according to Hanson, will just need to check a box. But for those who have to do more — because they purchased insurance through a marketplace or were required to do so but didn’t, for instance — things can get a little more complicated.

For these people, Hanson said, the free filing software will help ensure they get their return right. It automatically determines which IRS forms need to be completed, then files those completed forms electronically.

It determines whether people who may be liable for an individual shared responsibility payment, because they did not have qualifying coverage, can be exempted from paying it, Hanson said.

For those who haven’t done so before, another reason to start e-filing this year is the diminished service expected from the IRS due to budget cuts, new mandates and inflation, according to an internal email to IRS staff from Tax Commissioner John A. Koskinen.

This fiscal year, the combined cuts amount to $600 million, creating the lowest level of funding since 1998 when inflation is factored, Koskinen wrote.

The most immediate impact of this may be longer telephone wait times, often topping 30 minutes, according to Hanson. In his email, Koskinen stated that fewer than half of taxpayers who try calling the IRS will actually reach anyone, compared with 64 percent last year.

Cuts will also mean at least 46,000 fewer audits, the commissioner wrote.

Meanwhile, Hanson cited more help available for many taxpayers. Those earning $53,000 or less and the elderly can get free help by visiting one of more than 12,000 community-based tax help sites, which are staffed by more than 90,000 volunteers.

Finally, for two out of every three taxpayers that will get a refund this year, Hanson said, combining e-file and direct deposit is the fast way to get it — within 21 days.

“If you haven’t already, you should consider filing electronically. It’s fast, accurate and the best way to get your refund quickly,” Koskinen stated.

As always, the deadline to file is April 15.