Tax season in US and what you can do about it

The United States Internal Revenue Service has sent a reminder to American taxpayers that they must keep a few things ready. The deadline for tax filing is January 23. Tax season equals too much paperwork. Accounting firms and individuals are frequently overwhelmed prior to tax returns getting due on or before April 18, 2017.

Tax return deadline

For a majority of taxpayers, the last day is actually December 31. Their tax returns for 2016 will be impacted only until that day. To give an example, contributions towards charity are deductible in same year. Donations can also be charged to credit card prior to end 2016 count for 2016 tax year. This would be applicable even if bill does not get paid until the year 2017 comes. Payments to charity will be regarded as done to 2016 even if the checks are mailed to their destination on December 31.

Tax exempt organizations and taxpayers must fill a number of IRS tax forms to report financial information. The documentation is utilized to report income and calculate the taxes to be paid to federal government. Other information must also be disclosed by Internal Revenue Code. The numbers of forms cross 800 in number and there are also lots of schedules.

IRS rules

The IRS has published a communique which says that taxpayers over 701/2 years of age are usually needed to receive all payments from individual retirement accounts. This includes workplace retirement plans end 2016 as well. There is, however, a special rule which exempts those who have attained 701/2 years of age in 2016. Under this rule, they can wait until the first day of April in 2017 comes to receive them. The statement continued to say that majority of the contributions towards workplace retirement accounts must be made by year end. Taxpayers, however, can make contributions toward 2016 IRA until or on April 18, 2017. The limit in 2016 for 401(k) is $18,000. In case of Roth and traditional IRAs, restriction is $6,500 in case you are 50 or older. It can be $15,500 for Simple IRA under the same criteria.

If you have moved in the meantime, then you should inform your employer, the IRS and also US Postal Service. The IRS must be notified through Form 8822. This is Change of Address form. The form must be mailed to address given on form’s instructions.

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