EITC and Additional Child Tax Credit Delays in 2017

The IRS has announced new processing procedures involving the Earned Income Tax Credit and the Additional Child Tax Credit during the first few weeks of 2017, and during the latter half of 2016, the agency hopes to prepare taxpayers and tax professionals for this major change.

As part of the PATH Act passed in December of 2015, the new law mandates that no tax credit or refund for an overpayment for a taxable year shall be made to a taxpayer before February 15th if the taxpayer claimed Earned Income Tax Credit or Additional Child Tax Credit on their return.

This change will go into effect January 1, 2017, and may affect some returns filed early in 2017. This means that:

  • The IRS will hold the refunds on EITC and ACTC-related returns until February 15th. The agency will also hold onto an entire refund that falls into this category, rather than issuing partial refunds.
  • Taxpayers should file as normal, and tax professionals should submit returns as normal. The IRS will still be accepting and processing returns once the filing season begins; that process will not change with the new law.
  • The IRS still expects to issue most refunds in less than 21 days, though the IRS will hold EITC and ACTC refunds until February 15th and then begin issuing them.

With these new steps in place, the hope is that the law can help prevent identity theft and fabricated withholdings revenue loss as well as ensure that taxpayers receive the refund they are owed.

The IRS will continue to share information with taxpayers at www.irs.gov as information becomes available through the fall of 2016.


Taxpayer Guide to Identity Theft

Tax identity theft occurs when someone uses your Social Security number to file a fraudulent tax return to get a refund. This is a major issue that the IRS is trying to address, but they cannot win this fight alone. There are steps that you both as a taxpayer and a business owner can take to protect yourself from identity theft and fraud.

How to Reduce Your Risk

  • Use security software with firewall and anti-virus protections. Also, use strong passwords and routinely change them.
  • Learn to recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations. Do not click on links or download attachments from unknown or suspicious emails.
  • Protect your personal data. Don’t routinely carry your Social Security card, and make sure that your tax documents are secure.

If you believe you are a victim of tax identity theft, look for these red flags:

  • More than one tax return has been filed using your SSN.
  • You owe additional tax, your refund is offset or collection actions have been taken against you for a year you did not file a tax return.
  • IRS records indicate that you received wages or other income from an employer that you did not work for.

If you do become a victim of identity theft:

  • File a complaint with the FTC at identitytheft.gov.
  • Contact a major credit bureau, such as Equifax, Experian or TransUnion to place a fraud alert on your records.
  • Contact your financial institutions and close all accounts that were opened without your permission or tampered with by thieves.

If your SSN is compromised and you know or suspect you are a victim of Tax Identity Theft, the IRS recommends:

  • Respond immediately to any IRS notice, and make sure to follow the directions on the notice. Messages and notices from the IRS will come through postal mail, not through email or phone calls.
  • Fill out Form 14039, the Identity Theft Affidavit.
  • Continue to pay your taxes and file your tax return, even if you must paper file the return rather than e-File.
  • IP PINs: If you are a confirmed ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique six-digit number that you will use to e-File your tax return. Each year you will receive an IRS letter with a new IP PIN.

With your help, the IRS stopped 1.4 million confirmed ID theft returns and protected $8.7 billion in 2015. In the past couple of years, more than 2,000 people have been convicted of filing fraudulent ID theft returns. As taxpayers and tax professionals, let us do our part to help combat identity theft.


Taxware Systems’ Bill of Rights

At Taxware Systems, we want you, the tax professional, to have all of the resources available that we can provide. We believe that you have certain rights and privileges you should be entitled to.

  1. The Right to Be Informed: At Taxware Systems, we are honest with you. We don’t just want to sell– we want to build a relationship with you. We want to make sure you know what’s going on not only with us and our software, but also what’s happening with the tax industry in general. As the tax laws change and programs are updated, we want to help you through the unknown.
  2. The Right to Quality Service: You deserve quality service, which means prompt, courteous and professional assistance. Here at Taxware, we have experienced support teams that take care of not just our software programs, but our people. We know that our clients are the reason we’re in business, and we thank you for that by having quality support ready to assist. Our sales representatives and tech support are here to help our clients finish their toughest returns and get their hardest questions answered.
  3. The Right to Be Heard: Everyone deserves to be heard and treated with respect, and at Taxware Systems we do our best to take our clients suggestions and concerns and implement or fix them in a timely manner. Even during peak tax time, we are working hard to make the program better and finding ways to make the tax season easier and more successful for our clients.
  4. The Right to Security: Taxware Systems has been in business since 1979, and even as we continue to grow, we have never bought or sold to another tax software company. We are based in southern California, and we do not rely on overseas support to help our clients. Client data is always confidential, and will never be shared or used for selling purposes.
  5. The Right to Resources: From tech support to online tutorials, videos and emails, we at Taxware Systems want you to learn how to use our programs so that you are comfortable and ready for the tax season. We have many kinds of training available, and we are here for you. If you have questions or need help, just ask!

Want to Learn More? Check out our video!



Tax Insanity: Taxware Systems Can Help

The definition of insanity is an interesting one; some people might say insanity is staying up until all hours of the night doing something that you enjoy. Another group might say insanity is having the courage to do something others are too timid to try.

Admit it, most of us fit into one or both of these categories, but when it comes to tax preparation business, we need to think seriously about another, more troubling type of insanity– doing the same thing over and over but expecting a different result–and how it affects your office as a tax professional.

One example of this insanity would be being willing to wait three hours for technical support over the phone. Many times as I have gone to trade shows and various events, tax professionals have told me that it is too hard to change because it is time consuming or they are already too familiar with their old program, but in the same breath the preparers say they suffer from slow tech support who have them hold for three hours or more or never get a call back. With Taxware Systems, you will never be waiting on the phone for hours. Even in peak tax times you will always get an answer and be greeted with courteous, fast and friendly service. Added Bonus: In the same three hours that tax professionals are on hold with tech support from other companies, preparers can learn the Taxware Systems user-friendly software.

Another example of tax insanity would be pricing. While vendors often sell their software at a heavily reduced price or even give out their software for free, the question arises, “How are they making money?” The answer: hidden fees that you could be paying. They make their money in many different ways, including bank product fees, e-File fees, bank technology and support fees, among others. Added Bonus: Taxware Systems is proud to be one of the few, if not the only, tax software company that does not charge bank transmission, bank technology, support or other hidden fees.

One last example would be struggling with software. I have heard from several tax preparers that they don’t want to switch because they don’t want to figure out a new program, and yet these same tax professionals struggle because the program that they have does not have everything they need or they do not like how certain forms or schedules work with their current software. Here’s a tip: There’s nothing wrong with taking time to learn something new, and even though change can be scary, Taxware Systems will be there to help you through the learning curve. The program and our support team can take you from the beginning of a tax return to e-filing and printing. With our fast, user-friendly software and helpful tech support, you can’t lose. Added Bonus: Thanks to our brilliant team of programmers, we are taking a great program and making it better! With a brand new client grid, live preview of forms and schedules and side by side Taxware Systems and IRS validation among other features being tested in 2016, the improved software is bound to get returns done faster and you on your way to things you want to do.

So, instead of tax insanity and business anxiety, why don’t you give us at Taxware Systems a try? With our fantastic client support, no extra fees and a great program, we can help you have a wonderful tax season and beyond.

To find out more, give us a call at 1-800-877-1065 or email us at sales@taxwaresystems.com and we would be happy to help you!

Click here to check out our video!