With every new presidential administration, there are likely to be changes in federal tax policy. Some of these changes can radically impact the way that Michigan taxpayers will file their taxes and report on earnings.
We previously reported that identity theft resulted in $3.1 billion in fraudulent tax refunds in 2014. However, many believe this figure to be significantly higher. Wrongdoers are using such Social Security numbers to trigger a refund from the IRS or state revenue offices. Those perpetrating the fraud, besides using the Social Security numbers of actual taxpayers, may be also using the Social Security numbers of deceased taxpayers or children.
We don't yet know what ultimately will happen regarding attempts to repeal the Affordable Care Act (ACA), more commonly known as Obamacare. Repealing it may prove more difficult than many of its opponents first claimed. And as of right now, it still remains intact. However, as far as taxpayers are concerned, what is important is determining how strong will be enforcement of the ACA provisions now that we have a new presidential administration. One important provision of the ACA concerns a mandatory penalty for not having health coverage.
There is understandable concern regarding how far back the IRS can look when auditing tax returns. While generally the IRS can look back three years after a filing during an audit, there are many exceptions to this rule.
We are in the thick of tax season and everyone is scrambling to get their paperwork done. Some individuals may have started at the beginning of the year while others wait until the last minute to do their paperwork. Whichever way you do it, it’s important that the information on your tax papers is accurate and honest. It may be helpful to work with a professional on your tax returns in order to have some peace of mind that the information is sound.