The IRS will begin accepting 2016 tax returns on Jan. 23, and this year’s deadline is April 18 — not 15 — because the deadline arrives on a weekend, and is followed by the Emancipation Day holiday in Washington.
Expect delays in your 2017 refund — due to holidays for Presidents' Day on Feb. 20 and processing times for the federal government and banks. The IRS, for instance, instituted some antifraud measures that may delay millions of refunds until Feb. 27, more than a month after tax-filing season opens, the agency said Thursday.
If you're checking for an estimated refund date, you can use the agency’s online “Where’s My Refund?” tool — located at IRS.gov/refunds — anytime after Feb. 15.
Anyone who claims the Earned Income Tax Credit or the Additional Child Tax Credit will likely have their refund held until at least Feb. 15.
IRS Commissioner John Koskinen said last week that taxpayers who file electronically with their own tax software need to have last year's return handy.
“If you’re changing tax-software products this filing season, make sure you have a copy of your prior-year return on hand,” he said. “You may be asked to enter your 2015 adjusted gross income. This helps verify your identity before you e-file."
The IRS paid refunds on 73 percent of last year's 153 million returns, with refunds averaging $2,857, Koskinen said, and expects similar numbers this year.
Taxpayers who can’t find an answer on IRS.gov can call the IRS at 800-829-1040 Monday through Friday from 7 a.m. to 7 p.m.
Taxpayers who can’t resolve their issue online or by phone can schedule an appointment at an IRS Taxpayer Assistance Center.
Use the "Contact Your Local Office" tool on IRS.gov to find the closest office or call 844-545-5640.
There's also Free File, free tax-preparation software available to those earning less than $64,000 annually. After Friday, you can download the free software at www.IRS.gov/freefile or www.freefilealliance.org. The downloadable versions of Free File Fillable Forms will be available Jan. 23.
The Free File Alliance is a nonprofit coalition of industry-leading tax-software companies partnered with the IRS to provide free electronic tax services. More than 46 million returns have been filed since the program began in 2003.
Finally, the Pennsylvania Institute of Certified Public Accountants will hold its seventh annual Q&A Breakfast with Richard Furlong, IRS senior stakeholder liaison, Feb. 2 at Spring Mill Manor in Ivyland. For more information or to sign up, visit PICPA's website (www.picpa.org).
Be on alert for scammers looking for your refund!
Remember, the IRS will never:
• Call to demand immediate payment, especially asking you to use a prepaid debit card, gift card, or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
• Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
• Demand that you pay taxes without giving you the opportunity to question or appeal the amount it says you owe.
• Ask for your credit or debit card numbers over the phone. Don't hand those over.
Scammers calling with aggressive and threatening demands for taxes are criminals impersonating IRS agents — and they remain a major threat for American taxpayers. Variations of the IRS impersonation scam continue year-round and tend to peak when scam artists find prime opportunities to strike — like tax season. Don't become a victim — just hang up.
Vanguard update.. Rising interest rates may bring pain in the short term, but Vanguard newsletter writer and adviser Dan Wiener still likes Vanguard's Short-Term Investment-Grade and Intermediate-Term Investment-Grade bond funds, rather than the Treasury-heavy Total Bond Market Index.
And as long as the economy remains strong, the Vanguard High-Yield Corporate bond fund is also "a terrific option. Many questioned me when I recommended we buy the fund at the end of September 2011. But through the end of this past year, High-Yield Corporate has brought us a total return of 45.3 percent, four times the 11.6 percent return for Total Bond Market Index over the same period, making it the single best bond fund among Vanguard’s stable by a factor of two or more."
Wiener also owns Vanguard Health Care, down 9.0 percent in 2016 and lagging its in-house index competition — Vanguard Health Care ETF only dropped 3.2 percent. It was the worst-performing Vanguard fund for much of the year.
"I’m certainly not happy with that performance, but allow me to reaffirm my conviction in this holding," he added. Health-care spending currently runs at just under 18 percent of GDP, and will represent a bit more than 28 percent of GDP by 2041.
Portfolio manager Jean Hynes and the team at Wellington Management "won’t outperform the index every year, but with all the innovations and potential regulatory changes coming, I’d rather have Hynes and her team picking the winners from the losers than just blindly buying all health-care stocks," Wiener noted.
Lastly, it's not too late to contribute to your retirement account. How much is enough? Fidelity offers a guideline for retirement savings that suggests you put away eight times your annual income by the time you hit age 67 to have a shot at 85 percent of your preretirement annual income. So, if you’re earning $65,000 per year at age 67, you’d have $520,000 put away.