2015 is a rough year for taxpayers.
Once this year's tax season is in the books, it's time to get ready for the one next year. To help you determine what's in store, here are three tax facts to know for 2016.
About one third of Americans wait until the last minute to file their federal taxes.
Those procrastinating tax filers (not you, of course!) will be happy to find that most of them are going to get four extra days to file federal taxes in 2015. There are three reasons for this extension.
Wohoo! Most taxpayers will have until Monday April 18, 2016 to file federal taxes (four extra days).
You may be wondering why I keep saying that "most taxpayers" get four extra days. The reason is that some taxpayers will get five extra days.
Residents of Maine and Massachusetts will celebrate Patriot's Day (a state holiday commemorating the anniversary of the Battles of Lexington and Concord, the first battles of the American Revolutionary War) on Monday April 18, 2016. The aforementioned Section 7503 of the Tax Code includes in its definition of "legal holiday" any statewide legal holiday in the state where such office is located.
So, residents of Maine and Massachusetts have until the closing hours of the postal office on Tuesday April 19, 2016 (five extra days!) to drop their federal tax forms in the mail.
Need even more time than that? Then make sure to file an extension by the deadline.
Even when you cross the t's and dot the i's in your federal tax forms, something may still go wrong.
In May 2015, the IRS announced that "...criminals used taxpayer-specific data acquired from non-IRS sources to gain unauthorized access to information on approximately 100,000 tax accounts." Identity thieves got away with Social Security numbers, dates of birth, and street addresses through the IRS Get Transcript online service, which is currently unavailable.
Those 100,000 taxpayers affected by the data breach will receive a letter from the IRS officially notifying them of the event and providing recommendations for next steps, such as credit monitoring.
However, there's more to this breach.
If you were a victim of identify theft, you may have already received (or will receive) an IRS letter in the near future. This would surely throw a monkey wrench into your 2016 tax filing.
This 2015 the state tax man cometh late.
In response to the increasing number of tax fraud cases around the country, more than one state Department of Taxation is delaying refunds. For example, the Hawaii State Department of Taxation initially told taxpayers it would take six to eight weeks to process submitted tax forms.
But Hawaii taxpayers aren't the only ones on this boat.
Waiting on your refund, if any, may put a hold on your finances, particularly when you're counting on that refund to make a down payment, pay a big bill, or reduce debt. This is why you need to figure out the appropriate withholding rate (not too big, not too small) so that you don't end up owing the taxman a big check. (See also: 8 Tax Return Mistakes Even Smart People Make)
More days to file federal taxes, letters from the IRS warning some taxpayers about identity theft and tax fraud, and delayed state tax refunds are sure to make 2016 an interesting year.
What is your forecast for 2016's tax season? Please share in the comments below or tweet us at @Wisebread.
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You calculate so well. Thanks for posting the facts! Hope that next year we can breathe more easily.
Thank you Sandra. I hope 2016 turns out well for as many taxpayers as possible.
yes this is great for 2016 now how do we get hold of our script ,for those of us aboard.
Hi Guest,
Could you please clarify what script you're referring to? I ask so that I can help you with your question.
Best,
Damian