The tax season is drawing to a close, and it’s time to turn your attention to preparations for your federal tax returns. Understanding what to expect and when to file taxes in 2015 will ensure you’re better prepared and can maximize any tax benefits due to you. And more importantly, you increase your chances of increasing your federal or state tax refund.
Increase in Tax Benefits
Due to inflation, the Internal Revenue Service has made numerous adjustments to tax rate schedules and tables, as well as adjustments for tax provisions. For example, the standard deduction has been raised to $6,300 for singles, $9, 250 for heads of household, and $12,600 for married couples filing jointly. In addition, the maximum Earned Income Credit has been raised to $6,242 for married taxpayers with three or more qualifying children. Allowable contributions for healthcare Flexible Spending Accounts have risen to $2,550.
To save money at tax time, increase your itemized deductions by paying taxes owed for state income taxes, real estate taxes, and property taxes. Maximize your tax savings by contributing to any retirement plans you have in place. The IRS allows a retirement savings contributions credit, which is a tax credit you can claim in addition to other tax savings for which you qualify. The credit is $1,000 for singles and $2,000 for married couples, and it can reduce the taxes you owe or increase your refund amount. In addition, if you give to charity, be sure to calculate your tax deductions for charitable contributions in the same year that you pay it, even if you pay by credit card or check--just get a receipt of some sort.
The Affordable Care Act
The Affordable Care Act for individual taxpayers goes into effect for the first time this year. Unless a taxpayer is exempt, the Act requires each person to have health insurance, which is called essential minimum coverage. Taxpayers were able to obtain the required coverage through the Health Insurance Marketplace from October 1, 2013 through March 31, 2014. Those without the minimum required health care coverage must pay what is called a shared responsibility payment to the IRS.
Federal and State Tax Refund Timeline
An article has been circulating the internet stating that due to a Government-issued directive, the IRS cannot issue refunds until October 15, 2015. It says the delay is expected to save the Government 30 billion dollars because of the interest accumulated on the funds withheld. You can stop holding your breath though, because the article is a hoax, and nothing about a delay in refunds has been announced by the IRS. There is some speculation that the opening of the tax-filing season could be delayed because of failure to extend tax provisions that expired at the end of 2013. If this is true, it could result in refunds being delayed. There's no way to be sure until the IRS makes an announcement. The only thing still certain is that April 15 is the deadline to file taxes.
Filing your federal tax returns is a necessity that comes around once a year; therefore, you don't have to guess when to file taxes. Tax season can be a very stressful time, but you can avoid this by increasing your knowledge and planning ahead.