Jarods Accounting Services Inc

IT'S TAX TIME

IRS- MeF Systems are Operational

The IRS has successfully brought systems back online including Modernized e-File.

Acknowledgements from the stockpiled returns will be arriving throughout the morning.

February 1, 2016 -
The IRS is expected to release a large group of refunds this coming week. These refunds are currently showing a direct deposit date at the IRS WHERES MY REFUND of Wednesday February 3. We currently expect to release checks and prepaid cards related to this group on Tuesday afternoon February 2. This group will be the first large group of refunds of the year. Prior to this point, the IRS has only released very small batches of refunds, representing only less than 1% of refunds. It is highly unusual for the IRS to have waited this long to release the first large batch of refunds.
The batch of refunds that should be coming this week will be MUCH larger than what has been released previously, and is expected to include many of the refunds filed between Jan 11 and Jan 18. The batch will also include some refunds filed between Jan 19 and Jan 23, although we do not expect there to be as many from this time period released by the IRS.

Current News

January 29, 2016 - IRS Refund Situation (as of 7am)
The IRS continues to releases only a small amount of refunds each day. Currently (as of 7am 1/29/2016), reports are that the IRS has only released refunds for less than 1% of taxpayers nationwide who filed within the first two weeks of the season.

Current News

January 28, 2016 - Unusual Refund Patterns at IRS

As of 7am Eastern this morning, the IRS has still only released a small trickle of refunds so far this year. Never in the history of e-file have most early filers waited this long to receive their refund.

By the end of today, the IRS is scheduled to release approximately 10% of refunds under $1000 which were filed prior to 1/23/2016. Tomorrow, the IRS is slated to release some additional refunds which were filed on 1/23 and 1/24. However, as is the case today, our information shows that the IRS will again release only approximately 10% of refunds under $1000 during that time period. Put another way, for the most part, the IRS has not yet released ANY refund over $1000.

This situation is nationwide, affecting all taxpayers and all tax preparers throughout the country. Based on our records, never in the recent past has the IRS waited this long to release the initial large batch of refunds related to early filers.

Keep in mind that it is still possible that additional refunds will be released by the IRS today or tomorrow other than those mentioned above. Also, it is likely that we will receive additional information over the next two days on when the remaining refunds will be released. If that occurs, we will post a message here to let you know.

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Tax Law Update: The American Tax Relief Act of 2012
The American Tax Relief act extended the relief for married taxpayers, the expanded credit for taxpayers with three or more qualifying children and other provisions to December 31, 2017.
Maximum Credit Amounts
The maximum amount of credit for Tax Year 2015 is:
$6,242 with three or more qualifying children
$5,548 with two qualifying children
$3,359 with one qualifying child
$503 with no qualifying children

IRS Now Required to Use Collection Agencies
In a 1,300 page Transportation Bill signed into law in December, 2015, there are eight pages that require the IRS to assign unpaid tax bills to outside collection agencies. This means that third party companies will now be calling taxpayers as representatives of the IRS to collect unpaid taxes.

The $900 million problem? The IRS acknowledges over $900 million in premium health care credits during 2014 will need to be repaid by taxpayers. There is the possibility of having some of this collection activity assigned to third party companies due to lack of IRS resources.

Tax Law Update: PATH Act Passes: What you need to know
- Deduction for state and local general sales taxes (in place of state income tax deduction) as an itemized deduction. All taxpayers in states without income taxes who itemize deductions and taxpayers who have high sales tax obligations versus state income tax obligations. This provision is now permanent.

- Deductibility of home mortgage insurance premiums. All qualified home-owners required to carry mortgage insurance by their lenders. This provision is extended through 2016.

- Tax-free deductions from retirement plans for charitable contributions. All taxpayers over 70½ years old who make qualified charitable contributions of up to $100,000 directly from their IRAs. This provision is now a permanent benefit in the tax code.

Tax Law update: PATH Act Passes: What you need to know
Once again, with the signature of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), many popular tax items have either been made a permanent part of the tax code or have been extended to 2016 and beyond.

Here are the more commonly used tax savings items and their new status;
Teacher $250 deduction for qualified classroom expenses.
Impacts: All qualified elementary and secondary educators. This deduction does not require itemizing and the provision is now a permanent part of the tax code.

What's new? Starting in 2016 you can also deduct the cost of qualified continuing education courses.