2016 Income Tax Guide: Refund Tips, Different Deadline, Scam Warning

By Deb Belt, Patch staff

Procrastinators – and who isn’t when it comes to filing their income taxes? – are in luck this year.

You have an extra weekend to buckle down, compile and submit your tax returns.

Because of a holiday in the nation’s capital, the filing deadline to submit 2015 tax returns is Monday, April 18, 2016, rather than the traditional April 15 date.

The Internal Revenue Service says that Washington, D.C., will celebrate Emancipation Day on Friday, April 15. That, in turn, pushes the federal tax deadline to the following Monday for most of the nation.

If you need more time to file, you can use IRS Free File to get an automatic six-month extension to file your taxes. But if you owe taxes, those must be paid April 18, even with an extension to file your return.

Taxpayers who can’t pay the taxes they owe may set up a monthly payment plan using the Online Payment Agreement option on IRS.gov.

Warnings on Phishing Scams

IRS officials and Maryland Comptroller Peter Franchot are warning taxpayers to be alert to new phone and email phishing scams trying to trick victims into divulging their personal information.

“If anyone calls you or sends you an email asking for your Social Security number, don’t respond,” Franchot said. “If these scammers try to talk you, hang up immediately. These are criminals trying to steal your identity and take your money.”

The IRS said scammers are calling or emailing taxpayers to verify the last four digits of their Social Security number by clicking on a link provided in an email, which claims that recent data breaches across the nation may be involved.

Government offices do not send emails like this, authorities said.

Taxpayers should not reply to emails requesting confidential information, especially your Social Security number, birth date, salary information or home address. If you receive an email asking for a copy of your W-2 form, you should immediately contact your employer. You also may call 1-800-MD-TAXES or email mdcomptroller@comp.state.md.us.

Speedy Refunds

Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund. The IRS says it will likely issue more than nine out of 10 refunds in less than 21 days.

If you haven’t filed yet, the IRS has these tips to help you.

• Gather your records. Make sure you have all yourtax records. This includes receipts, canceled checks and other records that support income, deductions or tax credits that you claim. If you purchased health insurance through the Marketplace, you will need the information in Form 1095-A to file.
• Report all your income. You will need to report your income from all of your Forms W-2, Wage and Tax Statements, Forms 1099 and any other income – even if you don’t receive a statement – when you file your tax return.
• Try IRS Free File. Free File is available only on IRS.gov. If you made $62,000 or less, you can use free tax software to file your federal return. If you earned more, you can use Free File Fillable Forms, an electronic version of IRS paper forms.
• Try IRS e-file. Electronic filing is the best way to file a tax return. It’s accurate, safe and easy. If you owe taxes, you have the option to e-file early and pay by April 18 to avoid penalties and interest.
• Use Direct Deposit. The fastest and safest way to get your refund is to combine e-file with direct deposit. The IRS issues more than nine out of 10 refunds in less than 21 days.
• Review your return. Mistakes slow down your tax refund. If you file a paper return, be sure to check all Social Security numbers. That’s one of the most common errors.
• Visit IRS.gov. The website has forms and other info you need to file your tax return. Click on the "Filing" icon for links to filing tips, answers to frequently asked questions and IRS forms and publications. The IRS has many online tools on IRS.gov to help you file and answer your tax questions. The tool gives the same answers that an IRS representative would give over the phone.

Make The Most of Your Refund

WalletHub offers some advice on what to do with your refund -- have it direct deposited rather than put on a prepaid card -- and what to spend it on.

• Direct Deposit over Prepaid Cards: Many tax preparers and some states offer to pay tax refunds via prepaid card, but those cards often charge multiple fees that lower your refund. If possible, direct deposit is the best way to receive your refund.
• Pay Off Debt: Start with credit card debt, which often carries a high interest rate, then tackle other debts you owe.
• Invest Your Refund: Experts suggest putting your money in an IRA to lower next year’s tax burden, adding to a college savings plan, or building a stock portfolio.
• Reevaluate Withholdings: Receiving a large refund means that you are paying too much in taxes and you could reduce paycheck withholdings to spend on your priorities, rather than letting the government to use it interest free.

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