Want Your Tax Refund Fast? E-File Starts Jan. 20

Courtesy of the IRS

The Internal Revenue Service announced the on-time opening of the nation’s 2015 filing season and highlighted a growing array of online services, including features that help taxpayers understand how the Affordable Care Act will affect them at tax time, along with the availability of the Free File program.

Taxpayers have until Wednesday, April 15, 2015 to file their 2014 tax returns and pay any taxes due. The IRS expects to receive about 150 million individual income tax returns this year. Like each of the past three years, more than four out of five returns are expected to be filed electronically.

The IRS Free File program, available at IRS.gov, will open Friday for taxpayers, and the IRS will begin accepting and processing all tax returns on Tuesday, Jan. 20.

This year’s return will include new questions to incorporate provisions of the Affordable Care Act (or ACA). The majority of taxpayers - more than three out of four – will simply need to check a box to verify they have health insurance coverage. For the minority of taxpayers who will have to do more, IRS.gov/aca features useful information and tips regarding the premium tax credit, the individual shared responsibility requirement and other tax features of the ACA.

“Our employees will be working hard again this season to help the nation’s taxpayers,” IRS Commissioner John Koskinen said. “We encourage people to use the tools and information available on IRS.gov, particularly given the long wait times we anticipate on our phone lines. As always, taxpayers can benefit by filing electronically.”

Koskinen announced that taxpayers can begin preparing their returns using the Free File system on Friday, Jan. 16.

Available only at IRS.gov, Free File offers two filing options:

· Brand-name software, offered by IRS’ commercial partners to about 100 million individuals and families with incomes of $60,000 or less; or

· Online fillable forms, the electronic version of IRS paper forms available to taxpayers at all income levels and especially useful to people comfortable with filling out their own returns.

E-file, when combined with direct deposit, is the fastest way to get a refund. More than three out of four refund recipients now choose direct deposit. People who e-file make fewer mistakes, and it costs nothing for those who choose Free File.

In all, 14 software companies will be participating in this year’s Free File program. Additional details about the specific Free File offerings will be available Friday on the front page of IRS.gov when Free File becomes available.

The IRS will begin accepting and processing all returns – whether e-file, Free File or paper tax returns -- on Jan. 20.

Like last year, the IRS expects to issue more than nine out of 10 refunds within 21 days.

Koskinen said, “If you haven’t already, you should consider filing electronically. It’s fast, accurate and the best way to get your refund quickly.”

Koskinen also strongly encouraged taxpayers to visit IRS.gov as a first stop for information ranging from the status of their refunds to basic tax information. He cautioned taxpayers that recent budget reductions will mean long wait times on the phone, routinely topping 30 minutes.

Health Care Basics

The Affordable Care Act requires that a taxpayer and each member of their family either has qualifying health insurance coverage for each month of the year, qualifies foran exemption , or makes an individual shared responsibility paymentwhen filing their federal income tax return.

Some moderate-income taxpayers may also qualify for financial assistance to help cover the cost of health insurance purchased through the Health Insurance Marketplace.

Taxpayers will fall into one or more of the following categories:

• Check the box. Most taxpayers will simply check a box on their tax returns to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required.

Qualifying health insurance coverage includes coverage under most, but not all, types of health care coverage plans. Taxpayers can use the chart on IRS.gov/aca to find out if their insurance counts as qualifying coverage.

• Exemptions. Taxpayers may be eligible to claim an exemption from the requirement to have coverage. Eligible taxpayers need to complete the new IRSForm 8965, Health Coverage Exemptions,and attach it to their tax return. Taxpayers must apply for some exemptions through the Health Insurance Marketplace. However, most of the exemptions are easily obtained from the IRS when filing a return.

· Individual Shared Responsibility Payment. Taxpayers who do not have qualifying coverage or an exemption for each month of the year will need to make an individual shared responsibility payment with their return for choosing not to purchase coverage. Examples and information about figuring the payment are available on the IRSCalculating the Payment page.

· Premium Tax Credit. Taxpayers who bought coverage through the Health Insurance Marketplace should receive Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace by early February. This form should be saved because it has important information needed to complete a tax return.

If the Form 1095-A is not received by early February, contact the Marketplace where coverage was purchased. Do not contact the IRS because IRS telephone assisters will not have access to this information.