The Internal Revenue Service will begin accepting e-Filed tax returns on January 20 this year, ten days earlier than it did the past two years. Many people will be receiving their W-2 Forms this week, or at the beginning of next, and will be in a position to file their taxes then. This office has always encouraged people to file their taxes early to avoid tax refund identity theft. I blogged on this subject here. Many people want to file their tax returns right away because they get very large refunds as a result of the Earned Income Credit and other reasons. This is understandable.
Unfortunately, this is also the first year that the Affordable Care Act (“ObamaCare”) comes into effect. A number of people will have their tax refunds altered, usually reduced, because of the estimated Premium Tax Credit that they took earlier in the year. There are a number of issues that the individual mandate in the Affordable Care Act (“ObamaCare”) raises. Unfortunately, the 1095 Forms which report these issues to the Internal Revenue Service and to the taxpayers will not be mailed out until early to mid February. As a result, a large number of people who want to file in January will either have to wait until February, or amend their returns because of these issues.
We have decided not to encourage people to wait. Instead, we will be advising clients to file as soon as they can. This issue of tax refund identity theft is a serious one and for most people the problems that the Premium Tax Credit and other health insurance issues raise are not so big that they should postpone seeking their refund. This year we will be advising our clients who may have such an issue that when they get their refund they should make a point of saving a portion of it on the side, in case there is a problem later when their 1095s arrive. We will also advise that upon receipt of a 1095 they should come to the office and we will amend their tax return. I typically do not charge to amend tax returns anyway, but we state categorically that this year, 2015, tax year 2014, we will not be charging to amend tax returns because of Affordable Care Act (“ObamaCare”) issues. In this way, my clients can have the best of both words. They can E-File their taxes on January 20, get their tax refund safely delivered to them, spend most of it if they like, and be able to deal with the ObamaCare issues when and if they arise.