What to Expect This Tax Season
With the passage of the New Year, the tax return filing machinery is tuning up and preparing for the race to April 18. The Internal Revenue Service will begin accepting returns Monday, Jan. 23. Preparers can e-file returns before then; Drake will stockpile them and send them on to the IRS on the 23rd.
So, what’s ahead for your 2017 tax season? For starters, the IRS expects more than 153 million returns to be filed this year. The deadline for filing is Tuesday, April 18. Without an extension, all returns must be filed by that date and any tax due paid. This year’s deadline was extended to the 18th because the normal April 15 deadline falls on a Saturday this year, and the following Monday is the Emancipation Day holiday in Washington, D.C.
The IRS expects more than 70 percent of taxpayers to receive a refund this season. But it’s worth reminding that a new law requires the IRS to hold a refund from any return that claims either the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until Feb. 15. This gives the IRS time to verify the claims for the credits are valid.
This also means that refunds on EITC or ACTC returns won’t be arriving in bank accounts or debit cards until the week of Feb. 27. This timeline may be affected by the three-day Presidents’ Day holiday as well.
The delay and verification are part of a wide-ranging effort to combat identity theft and tax fraud. The Security Summit, a group made up of state tax agencies, tax software companies and other industry partners, has been advising the IRS on strategies to help in the fight against tax fraud. And it’s paying off. So far, Security Summit efforts have led to a 50 percent decline in the number of stolen identities on federal tax returns.
Expired ITINs Mean Delays
Legislation passed last year required that certain Individual Taxpayer Identification Numbers (ITINs) expired on Jan. 1, 2017. Any ITIN that hasn’t been used on a tax return at least once in the past three years must be renewed before a return can be processed. This is also true for ITINs with middle digits of either 78 or 79 (9XX-78-XXXX or 9XX-79-XXXX). Any taxpayer filing a return with an expired ITIN could see a delay in their processing and refund – and even denial of some tax benefits – until the ITIN is renewed.
New Features in Drake
Drake has a few enhancements of its own this season. Here are a few of the new features we’ve included in our new release:
- Fixed Asset Manager: You can now choose from more than 40 column headers to better customize your client reports.
- Data Entry Toolbar: The new toolbar is available on all data-entry screens and for all packages, letting you perform a variety of functions without leaving the screen.
- Schedule K-1: Improved importing and exporting of client K-1 information make working on a Schedule K-1 even easier.
- Taxpayer Forms in Spanish: Drake 16 includes 12 printable taxpayer forms in Spanish, including Forms W-4, W-7, 13844 and 2350.
- Organizer Enhancements: Choose from three different organizers in Drake16 – summary organizers, comprehensive organizers, and new client/blank organizers – that can now be generated as fillable PDFs and securely delivered to a client through SecureFilePro (SFP).
- Cloud Backup: In addition to securely transmitting and receiving files from clients, Secure File Pro (SFP) also functions as secure off-site storage. All Drake files can now be securely stored on the cloud.
Add these new features to our CPE opportunities, training webinars and award-winning support, and you have all the tools needed for a successful tax season.