Tax filing season is underway, and IRS says most Americans to get refund

Tax filing season is underway, and IRS says most Americans to get refund

January 24th, 2016 by Tim Omarzu in Business Around the Region

Tax preparer Ann Marie Casabianca, right, works with customer Lekeisha Davis at the 3614 Rossville Blvd. location of Liberty Tax Service.

Photo by Contributed Photo /Times Free Press.

POLL: Do you think you'll pay more in taxes this year?

To get help through VITA

Volunteer Income Tax Assistance offers free tax-filing services by trained volunteers at locations throughout the city. Take a photo ID and Social Security card for everyone listed on the tax return, W2 and other tax forms for income, interest, dividends and other financial transactions. Take a 1095-A form if you purchased insurance through the Marketplace under the Affordable Care Act.

CHATTANOOGA

› Southern Adventist University in Ooltewah at Fleming Plaza. Hours: Thursdays 9 a.m.-6 p.m., Fridays 9 a.m. -3 p.m., Sundays 9 a.m.-5 p.m. Walk-ins. Opens Jan. 30.

› Brainerd Recreation Center 1010 N. Moore Road. Hours: TBA.

› Second Missionary Baptist Church, 2919 E. Third St. Hours: Monday through Thursday 10:30 a.m. -4 p.m. By appointment. 423-805-2926. Opens Feb. 8.

› Urban League, 730 M.L. King Blvd. Hours: Tuesdays and Thursdays 9 a.m.-2 p.m. By appointment. Call Keesha at 423-756-1762, ext. 10.

› The Highland (Old 21st Century School), 104 North Tuxedo Ave. Hours: Tuesdays and Thursdays 10 a.m.-8 p.m., Wednesdays 10 a.m.-6 p.m., Saturdays 10 a.m.-2 p.m. Walk-ins.

› Northside Neighborhood House, 211 Minor St. Hours: Tuesdays and Wednesdays 9 a.m.-4 p.m. By appointment. Call 423-267-2217. Opens Feb. 2.

› Northgate Mall, 252 Northgate Dr. Hours: Mondays 1 p.m.-6 p.m., Wednesdays noon- 4 p.m., Saturdays 10 a.m.-2 p.m. Walk-ins. Enter mall near Ulta Beauty. VITA is second store on right.

› Signal Mountain United Methodist Church, 3419 Taft Highway. By appointment. Call 423-290-1394. Opens Feb. 1.

› Soddy Daisy Senior Center, 190 Depot St. Hours: Tuesdays 9 a.m.-4 p.m. By appointment (will take walk-ins if opening is available). Call 423-332-1702. Opens Feb. 2.

Cleveland, Tenn.

› Bradley Baptist Association, 2707 North Ocoee St. Hours: Mondays, Tuesdays and Fridays 4:30-8:30 p.m. and 10 am.-2 p.m. Saturdays. English- and Spanish-speaking site. By appointment. Call 423-476-5493.

› Cleveland Community Center, 1334 South Church St., SE. Hours: Thursdays 11 a.m.-4 p.m., Saturdays 10 a.m.- 2 p.m. Walk-ins. Opens Jan. 30. Closed March 10.

› Kmart, Bradley Square Mall, 200 Paul Huff Highway. Hours: Saturdays 10 a.m.-2 p.m. Walk-ins.

› Lee University Walker Business Building, 1120 North Ocoee St. Hours: Tuesdays 4-7 p.m. Closed holidays and spring break. Walk-ins. Open Feb. 9 through April 5.

South Pittsburg, TENN.

› Old National Guard Armory building, 107 East 10th St. Hours: Tuesdays and Fridays 10 a.m.-3 p.m., Saturdays, 8 a.m.-2 p.m., Sundays 9 a.m.-2 p.m. By appointment. Call: 423-580-0042.

— Coordinated by the Urban League

of Greater Chattanooga

Good news this year for those who procrastinate about filing taxes:

You don't have to file until Monday, April 18, because Emancipation Day celebrations take place on Friday, April 15 — the usual tax deadline — in Washington, D.C.

Meanwhile, if you are ready to file, you can, because the IRS began accepting tax returns Tuesday.

There are few things to be aware of this tax-filing season, Chattanooga-area tax preparers say.

First, if you have health insurance through your employer, you don't have to wait to get a form that proves that in order to file. Second, Congress made permanent a long list of personal and business tax breaks, including one that lets Tennessee residents deduct sales taxes if they itemize.

Greg Alford, manager of H&R Block at 2135 Glass St. in Chattanooga, says employers mistakenly tell their employees not to file their taxes until the employee has gotten a 1095-B or 1095-C form that proves the employee has employer-provided health care that exempts them from needing insurance through the Affordable Care Act, or Obamacare, Marketplace.

"Taxpayers don't have to have that in order to file," Alford said. "That confusion over the [health] insurance forms has really made it a slow start. We're down about 40 percent in seeing returning clients."

Bill Harmer, a certified public accountant at PAS Bookkeeping & Tax at 5708 Uptain Road near Eastgate Mall, said only people who have bought insurance through the marketplace need to wait for a 1095-A form that proves that in order to file.

Harmer said he hasn't seen a slowdown because of confusion over the Affordable Care Act.

To him, the most exciting news of this tax season was Congress' decision to pass and Obama's decision to sign the "Protecting Americans from Tax Hikes Act of 2015" legislation that, among other tax breaks, gives Tennesseans who itemize the option to deduct state and local sales taxes.

"That is something exciting, if you live in Tennessee," Harmer said. "That means the sales tax deduction is back in."

Refunds for most

Most Americans have incentive to file, because the IRS expects more than 70 percent of taxpayers to again receive tax refunds this year. Last year, the IRS issued 109 million refunds, with an average refund of $2,797. And they should come fast. The IRS anticipates it will issue more than nine out of 10 refunds in less than 21 days.

Many of the refunds are boosted by the earned income tax credit (EITC), a subsidy for working people that has been in place since 1975. It has the support of politicians on the left and right ranging from Democratic President Barack Obama to Republican Speaker of the House Paul Ryan, both of whom would like to see the EITC expanded — though they disagree on how best to do that.

Tennessee had about 657,000 tax filers receive an average EITC of $2,492 for statewide total of $1.6 billion in 2013, the most recent year figures are available, according to the National Conference of State Legislatures. In Georgia, 1.1 million people got an average EITC of $2,692 for $2.9 billion, statewide in 2013, and in Alabama, some 516,000 people got an average of $2,732, or about $1.4 billion statewide.

Some tax preparation firms offer "refund anticipation loans," that are secured by and repaid from the tax filer's refund.

But such loans have come under fire from consumer advocates who say they prey on the poor.

"Don't get caught up in so-called "Refund Anticipation Loans" (RALs) that eat up your tax return and put you at risk!" warns the United Way of Greater Chattanooga. "When you get a refund anticipation loan, it will cost you a big chunk of your tax refund!"

The United Way recommends that Chattanoogans get help to file electronically through Volunteer Income Tax Assistance (VITA). It's not a for-profit business — it's a free service coordinated here by the Urban League of Greater Chattanooga and staffed by trained volunteers, including retirees and accounting students from Lee University and Southern Adventist University.

"We don't charge [tax filers] anything," said Warren E. Logan Jr., president and CEO of the Urban League of Greater Chattanooga." They get the full benefit of whatever refunds they're going to get."

Each client served by the VITA program saves, on average, close to $200 in filing and processing fees they would have spent with a paid preparer, Logan said.

Wal-Mart last year introduced an alternative to RALs called Walmart Direct2Cash.

The retail giant partnered with 25,000 tax-preparation outlets nationwide to give those filing their taxes the option to receive their tax refund as cash at Wal-Mart. The most a tax preparer can charge for the service is $7 fee. The advantage to Wal-Mart is that it expects people who pick up large, cash tax refund to spend at least some of the money at Wal-Mart.

And commercial partners of the IRS offer free brand-name software to about 100 million individuals and families with incomes of $62,000 or less. Seventy percent of the nation's taxpayers are eligible for IRS Free File.

The IRS expects more than 150 million individual returns will be filed this year, and more than four out of five returns — above 80 percent — are expected to be filed electronically, with a similar proportion of refunds issued through direct deposit.

Seventy percent of the nation's taxpayers are eligible for IRS Free File. Commercial partners of the IRS offer free brand-name software to about 100 million individuals and families with incomes of $62,000 or less.

You can find more about electronic filing alternativss at www.irs.gov/Filing/E-File-Options.

Stonger ID fraud protections

The IRS says it's working diligently with state tax authorities and the tax industry to address tax-related identity theft and refund fraud. As part of the Security Summit effort, stronger protections for taxpayers and the nation's tax system have gone into effect for the 2016 tax filing season.

There will be new security requirements when you're preparing your taxes online, especially when you sign in to your tax software account, the IRS says, to better protect your tax software account and personal information.

The new measures attack tax-related identity theft from multiple sides. Many changes will be invisible to taxpayers but help the IRS, states and the tax industry provide new protections.

"As part of our Security Summit initiative, the IRS has been working closely with the tax industry and state revenue departments to provide taxpayers with stronger protections against identity theft during the tax filing season," IRS Commissioner John Koskinen said in a statement.


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