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ElectroFile Income Tax Service Newsletters
Income Tax Service
5200 W Market St
Greensboro, NC 27409
December 22, 2016
What To Do Before The Tax Year Ends Dec. 31
As tax filing season approaches, we are reminding taxpayers there are things
they should do now to get ready for filing season.
For most taxpayers, Dec. 31 is the last day to take actions that will impact
their 2016 tax returns. For example;
You might want to also take a look at our November 3, 2015 newletter,
Let's discuss Year End Tax Planning.
. Items discussed there still apply.
Charitable contributions are deductible in
the year made. Donations charged to a credit card before the end of 2016 count
for the 2016 tax year, even if the bill isnít paid until 2017. Checks to a
charity count for 2016 as long as they are mailed by the last day of the year.
Taxpayers who are
over age 70 Ĺ
are generally required to receive payments from
their individual retirement accounts and workplace retirement plans by the end
of 2016, though a special rule allows those who reached 70 Ĺ in 2016 to wait
until April 1, 2017 to receive them. Most workplace retirement account
contributions should be made by the end of the year, but taxpayers can make
2016 IRA contributions until April 18, 2017. For 2016, the limit for a 401(k)
is $18,000. For traditional and Roth IRAs, the limit is $6,500 if age 50 or
older and up to $15,500 for a Simple IRA for age 50 or older.
Taxpayers who have moved should tell the US Postal Service, their employers and
the IRS. To notify the IRS, mail IRS
, Change of Address, to the
address listed on the formís instructions. For taxpayers who purchase health
insurance through the Health Insurance Marketplace, they should also notify the
Marketplace when they move out of the area covered by their current Marketplace
For name changes due to marriage or divorce, notify the Social Security
Administration (SSA) so the new name will match IRS and SSA records. Also
notify the SSA if a dependentís name changed. A mismatch between the name shown
on your tax return and the SSA records can cause problems in the processing of
your return and may even delay your refund.
Effective Jan. 1, 2017, any Individual Taxpayer Identification Number (ITIN)
not used at least once on a tax return in the past three years will no longer
be valid for use on a return. In addition, an ITIN with middle digits 78 or 79
will also expire on Jan. 1. Those with expiring ITINs who need to file a return
in 2017 must renew their ITIN. Affected ITIN holders can avoid delays by
starting the renewal process now.
Taxpayers should allow seven weeks from Jan. 1, 2017, or the mailing date of
the Form W-7, whichever is later, for the IRS to notify them of their ITIN
application status - nine to 11 weeks if taxpayers wait to submit Form W-7
during the peak filing season, or send it from overseas. Those who fail to
renew before filing a return could face a delayed refund and may be ineligible
for some important tax credits. For more information, including answers to
frequently-asked questions, visit the
information page on IRS.gov.
Keeping copies of tax returns is important as the IRS makes changes to protect
taxpayers and authenticate their identity. Beginning in 2017, taxpayers using a
software product for the first time may need their Adjusted Gross Income amount
from a prior tax return to verify their identity. Taxpayers can learn more
about how to verify their identity and electronically sign their tax return at
Validating Your Electronically Filed Tax Return
. Of course, prior year ElectroFile Income Tax Service clients need not worry
about this. But, if you are coming to us for your first time, be sure to bring
a copy of your 2015 tax return.