I.R.S New Tax Law Beginning January 31 2017

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New Law Sets Jan. 31 W-2 Filing Deadline; Some Refunds Delayed Until Feb. 15

A new federal law moves up the W-2 filing deadline for employers and small businesses to Jan. 31. The new law makes it easier for the IRS to find and stop refund fraud. It also delays some taxpayer refunds. Those taxpayers claiming the Earned Income Tax Credit or the Additional Child Tax Credit won’t see refunds until Feb.15, at the earliest.

Here are some key points to keep in mind:

  • Protecting Americans from Tax Hikes (PATH) Act.Enacted last December, the new law means employers need to file their copies ofForms W-2  by  31. These forms also go to the Social Security Administration. The new deadline also applies to certain Forms 1099. Those reporting nonemployee compensation such as payments to independent contractors submitted to the IRS are due Jan. 31. Employers have long faced a Jan. 31 deadline in providing copies of these forms to their employees. That date won’t change.
  • Different from past deadline.Employers normally had until the end of February, if filing on paper, or the end of March, if filing electronically, to send in copies of these forms. The IRS is working with the payroll community and other partners to spread the word.
  • Helps stop fraud or errors.The new  31 deadline will help the IRS to spot errors on returns filed by taxpayers. Having these W-2s and 1099s sooner will make it easier for the IRS to verify legitimate tax returns and get refunds to taxpayers eligible to receive them. The changes will allow the IRS to send some tax refunds faster.
  • Some refunds delayed.Certain taxpayers will get their refunds a bit later. By law, the IRS must hold refunds for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until  15. This means the whole refund, not just the part related to the EITC or ACTC.
  • File tax returns normally.Taxpayers should file their returns as they normally do. The IRS issues more than nine out of 10 refunds in less than 21 days. However, some returns may need further review. Whether or not claiming EITC or ACTC, the IRS cautions taxpayers not to count on getting a refund by a certain date. Consider this fact when making major purchases or paying debts.
  • Use IRS.gov online tools.Starting  15, the best way to check the status of a refund is with the Where’s My Refund? tool on IRS.gov or the IRS2Go Mobile App.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers may need their Adjusted Gross Income amount from a prior tax return to verify their identity. They can get a transcript of their return at www.irs.gov/transcript.

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Preview of Some Key 2017 Tax figures

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Preview of Some Key 2017 Tax Figures

While official numbers for 2017 are not yet released by the Internal Revenue Service (IRS), many figures are based on the Consumer Price Index (CPI) published by the Department of Labor. Using the release of recent CPI figures, a number of sources are projecting key figures for 2017.

Tax Brackets: While the actual income brackets for tax rates are not set for 2017, the rate of inflation impacting the income levels for each rate is anticipated to raise the income brackets by approximately 0.6 – 0.8%.

Personal Exemption: $4,050 in 2017 (unchanged from 2016)

2017 compass

Standard Deductions:

Deduction Tax Year 2017 Tax Year 2016
Single
$6,350
$6,300
Head of Household
$9,350
$9,300
Married Filing Jointly
$12,700
$12,600
Married Filing Separately
$6,350
$6,300
Dependents (kiddie tax)
$1,050
$1,050
65 or Blind: Married
Add $1,250
Add $1,250
Single
Add $1,550
Add $1,550

Other Key figures:

Estate & Gift Tax Exclusion
$5.49 million
$5.45 million
Annual Gift Tax Exclusion
$14,000
$14,000
Roth and Traditional IRA Contribution Limit
$5,500
$5,500

Caution: Remember, these are early figures using the recently announced Consumer Price Index. Official numbers are released by the IRS later in the year.

Bloomberg Businessweek: Giving Obamacare a Lift in Colorado

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Bloomberg Businessweek: Giving Obamacare a Lift in Colorado.
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