Action Line: Tax filers should be aware of 2012 changes
BY PHIL MULKINS World Action Line Editor
Sunday, February 10, 2013
2/10/13 at 4:09 AM
Dear Action Line: How will the fiscal cliff fiasco affect tax season? Is there anything new on the tax preparer horizon? - M.T., Tulsa
This tax season is filled with complexities such as the late-breaking fiscal cliff negotiations that led the Internal Revenue Service to delay the opening of "tax season," according to the Jackson Hewitt Tax Service website.
Payroll tax holiday ends: The late-breaking legislation resulting from delayed fiscal cliff negotiations "has already impacted taxpayers' paychecks as the Payroll Tax Holiday expired and was not extended. This means the tax benefit that lowered the taxpayer's required Medicare tax payment by 2 percent in 2011 and 2012 is no longer there. Taxpayers have already seen a 2 percent drop in take-home pay," according to the website.
Tax return identity theft: More than 1.2 million cases were identified by the IRS in 2012. Thieves essentially steal identity information and file a fraudulent return in the victim's name to collect the tax refund. Filing early can help safeguard you from identity theft by locking out criminals, but tax return identity theft is an early-season tax crime.
Have baby, buy home: Even in a heavily regulated year like this one, life changes drive more significant tax changes than legislative changes. There are many more life changes to consider than the ones you always hear about like having a baby or buying a home. Many other common life changes that we see happening more today can also lead to a larger refund, such as a child returning to live at home or even caring for an aging parent (note the parent does not have to live with you to trigger the tax benefit) or even you or your spouse deciding to go back to school.
Wild West Tax Prep: With the IRS not able to regulate tax preparers, there are still things to look for in choosing the right preparer. On Jan. 18 a federal judge ruled the IRS has no authority to regulate the thousands of previously unregulated tax preparers the agency planned to regulate. About 60 percent of Americans enlist the help of paid tax professionals to compile and file their income tax returns, according to the IRS. Without federal oversight, it's essential to know what constitutes a qualified tax preparer. With so many recent and significant tax law changes, paid preparers need to be knowledgeable and current on the American Taxpayer Relief Act and how it applies to their situation.
After the U.S. District Court for D.C. denied the IRS petition to suspend the court's injunction against the Preparer Tax Identification Number program, it stated: "The injunction is modified to make clear that the IRS is not required to suspend its PTIN program, nor is it required to shut down all of its testing and continuing-education centers; instead, they may remain, but no tax-return preparer may be required to pay testing or continuing-education fees or to complete any testing or continuing education unless and until this injunction is stayed or vacated by the Court of Appeals."
E-file returns: Benefits include faster processing time, greater accuracy and confirmation the IRS has received your return.
Original Print Headline: New tips for tax filers
Submit Action Line questions by calling 918-699-8888, emailing phil.mulkins@tulsaworld.com or by mailing them to Tulsa World Action Line, PO Box 1770, Tulsa OK 74102-1770.
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