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03/02/2023

What to do when a W-2 or Form 1099 is missing or incorrect

It’s important for taxpayers to have all their documents and information so they can file an accurate and complete tax return. This may mean waiting to file until they receive all their documentation – and it can also mean following up on missing or incorrect documents.

Most taxpayers should have received income documents near the end of January. These may include:

Form W-2, Wage and Tax Statement
Form 1099-MISC, Miscellaneous Income
Form 1099-INT, Interest Income
Form 1099-NEC, Nonemployee Compensation
Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund
Taxpayers should first contact the employer, payer or issuing agency directly for copies
Taxpayers who haven't received a W-2 or Form 1099 should contact the employer, payer or issuing agency and request a copy of the missing document or a corrected document.

If they can’t get a copy, they can contact the IRS for help
Taxpayers should file their tax return on time – this year’s tax deadline is April 18 for most filers – even if they still have missing or incorrect documents. If they don’t receive the missing or corrected form from their employer or payer by the end of February, they may call the IRS at 800-829-1040 for help. They’ll need to provide their name, address, phone number, Social Security number and dates of employment. They’ll also need to provide the employer’s or payer’s name, address and phone number. The IRS will contact the employer or payer and request the missing form.

Estimating income when forms are incorrect or missing
After the taxpayer contacts the IRS about missing documents, the IRS will send the taxpayer one of these forms:

Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc.

If the taxpayer doesn’t receive the missing form in time to file their income tax return by the filing due date, they may complete Form 4852 or Form 1099-R to estimate their wages and earnings. They then attach the relevant form to their tax return when they file.

Taxpayers may need to file an amended return if they filed with missing or incorrect info
If they receive the missing or corrected Form W-2 or Form 1099-R after filing their return and the information differs from their previous estimate, they must file Form 1040-X, Amended U.S. Individual Income Tax Return.

Incorrect Form 1099-G for unemployment benefits
Taxpayers who receive an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits. Taxpayers who are unable to obtain a timely, corrected form from the state should still file an accurate tax return, reporting only the income they received.

02/27/2023

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02/13/2023

The benefits of having a tax refund direct deposited

Receiving a tax refund is happy news to any taxpayer; getting it quickly is even better. Direct deposit is the safest and most convenient way to receive a tax refund. The IRS encourages taxpayers to file when they are ready and choose direct deposit to receive any refund they may be owed.

Benefits of choosing IRS direct deposit:

It's fast. The fastest way for taxpayers to get their refund is to file electronically and choose direct deposit. Visit IRS.gov for details about IRS Free File, Free File Fillable Forms, free tax return preparation and more. Taxpayers who file a paper return can also choose direct deposit, but it will take longer to process the return and get a refund.
It's secure. Since refunds are electronically deposited, there's no risk of having a paper check stolen or lost in the mail.
It's easy. Taxpayers can simply follow the instructions when selecting direct deposit as a refund method and enter their account information as directed. They must enter the correct account and routing numbers when they file.
It provides options. Taxpayers can split a refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts. They should use IRS Form 8888, Allocation of Refund, Including Savings Bond Purchases to deposit a refund in up to three accounts. This form cannot be used to designate part of a refund to pay tax preparers.
Taxpayers should deposit refunds into U.S. bank accounts in their own name, their spouse's name or both. They should avoid making a deposit into accounts owned by others. Some banks require both spouses' names on the account to deposit a tax refund from a joint return. Taxpayers should check with their bank for direct deposit rules.

Get a bank account
Taxpayers who don't have a bank account can visit the FDIC website for information on banks that let them open an account online and how to choose the right account. Veterans can use the Veterans Benefits Banking Program for access to financial services at participating banks.

Mobile apps may be an option
Some mobile apps and prepaid debit cards allow for direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on a tax return. Taxpayers should check with the mobile app provider or financial institution to confirm which numbers to use.

Taxpayers must have their routing and account numbers for direct deposit available when they are ready to file. The IRS can't accept this information after a return is filed.

There is a limit of three direct deposit refunds made into a single financial account or prepaid debit card.

Pay your taxes. Get your refund status. Find IRS forms and answers to tax questions. We help you understand and meet your federal tax responsibilities.

06/23/2019

Taxpayers who still haven’t filed their 2018 tax return should do so ASAP

While the federal income tax-filing deadline has passed for most people, some taxpayers did not file an extension and still have not filed their tax returns. These taxpayers should file ASAP. They should do so even if they can’t pay to avoid potential penalties and interest, which can continue to add up quickly.

Here are some things taxpayers in this situation should know:

Penalties and interest are only added on unfiled returns if the taxpayer did not pay taxes by the April deadline. Taxpayers who did not file and owe tax should file a tax return and pay as much as they are able to now. If they cannot pay the full amount, they should learn about payment options. These can reduce possible penalties and interest added to the amount the taxpayer owes.

IRS Free File is available on IRS.gov through October 15.

Some taxpayers may have extra time to file their tax returns and pay any taxes due. These include:
o Some disaster victims
o Military service members and eligible support
personnel in combat zones
o U.S. citizens and resident aliens who live and work
outside the U.S. and Puerto Rico

If a return is filed more than 60 days after the April due date, the minimum penalty is either $210 or 100 percent of the unpaid tax, whichever is less. Therefore, if the tax due is $210 or less, the penalty is equal to the tax amount due. If the tax due is more than $210, the penalty is at least $210.

The IRS provided penalty relief for certain taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

Other taxpayers filing after the deadline may also qualify for penalty relief. Those who are charged a penalty may contact the IRS and explain why they were unable to file and pay by the due date.

Taxpayers who have a history of filing and paying on time often qualify for first-time penalty abatement.

There is no penalty for filing late if a refund is due

01/29/2019

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12/17/2018

These Tax Credits Can Mean a Refund for Individual Taxpayers

Taxpayers who are not required to file a tax return may want to do so. They might be eligible for a tax refund and don’t even know it. Some taxpayers might qualify for a tax credit that can result in money in their pocket. Taxpayers need to file a 2017 tax return to claim these credits.

Here is information about four tax credits that can mean a refund for eligible taxpayers:

Earned Income Tax Credit. A taxpayer who worked and earned less than $53,930 last year could receive the EITC as a tax refund. They must qualify for the credit, and may do so with or without a qualifying child. They may be eligible for up to $6,318. Taxpayers can use the 2017 EITC Assistant tool to find out if they qualify.
Premium Tax Credit.Taxpayers who chose to have advance payments of the premium tax credit sent directly to their insurer during 2017 must file a federal tax return to reconcile any advance payments with the allowable premium tax credit. In addition, taxpayers who enrolled in health insurance through the Health Insurance Marketplace in 2017 and did not receive the benefit of advance credit payments may be eligible to claim the premium tax credit when they file. They can use the Interactive Tax Assistant to see if they qualify for this credit.
Additional Child Tax Credit. If a taxpayer has at least one child that qualifies for the Child Tax Credit, they might be eligible for the ACTC. This credit is for certain individuals who get less than the full amount of the child tax credit.
American Opportunity Tax Credit. To claim the AOTC, the taxpayer, their spouse or their dependent must have been a student who was enrolled at least half time for one academic period. The credit is available for four years of post-secondary education. It can be worth up to $2,500 per eligible student. Even if the taxpayer doesn’t owe any taxes, they may still qualify. They are required to have Form 1098-T, Tuition Statement, to be eligible for an education benefit. Students receive this form from the school they attended. There are exceptions for some students. Taxpayers should complete Form 8863, Education Credits, and file it with their tax return.
By law, the IRS is required to hold EITC and Additional Child Tax Credit refunds until mid-February — even the portion not associated with the EITC or ACTC. The IRS expects the earliest of these refunds to be available in taxpayer bank accounts or debit cards starting February 27, 2018, if these taxpayers choose direct deposit and there are no other issues with their tax return.

Instructions for Forms 1040, 1040A or 1040EZ list income tax filing requirements. Taxpayers can also use the Interactive Tax Assistant tool on IRS.gov to answer many tax questions. They should look for “Do I need to file a return?” under general topics.

This tax tip covers information for tax year 2017 and is not affected by the Tax Cuts and Jobs Act of 2017. Most of the changes in this legislation take effect in 2018 and will affect the tax returns filed in 2019.

More Information:

Publication 596, Earned Income Credit
Schedule 8812 (Form 1040A or 1040), Child Tax Credit
Publication 972, Child Tax Credit
Publication 970, Tax Benefits for Education
Education Credits

12/10/2018

Taxpayers can sign up to receive IRS email subscription services
The IRS issues tax information by email for many different audiences. Here are some of the electronic subscriptions people can request by visiting the e-News Subscriptions page on IRS.gov:

Guidewire: People who sign up for Guidewire receive email notifications when the IRS issues advance copies of tax guidance, such as regulations, revenue rulings, revenue procedures, announcements, and notices.

e-News for Tax Professionals: Provides the latest national news for the tax professional community, as well as links to resources on IRS.gov and local news and events by state.

Outreach Corner: Provides organizations such as businesses and non-profits articles content that they can use in their own communication products and newsletters.

Tax Statistics: Supplies information about the most recent tax statistics.

Quick Alerts: Provides tax professionals and tax software providers with the latest information about e-file issues and events.

IRS Newswire: Provides news releases issued by IRS National Media Relations Office in Washington, DC.

Here are some other electronic subscriptions the IRS offers:

Alerts from Office of Professional Responsibility

e-News for IRS Continuing Education Providers

Modernized e-File News for Partnerships

e-News for Payroll Professionals

e-News for Small Business

e-File News for Large Businesses

Foreign Accountant Tax Compliance Act News & Information

Employee Plans

Indian Tribal Governments News

Tax Exempt Bond Community Update

Exempt Organization Update

Federal State & Local Governments

The IRS also offers Consejos Tributarios del IRS, a newsletter in Spanish.

12/08/2018

Employers should be aware of W-2 scam, protect employee information
Small businesses should be on-guard against a growing wave of identity theft and W-2 scams. Employers hold sensitive tax data on their employees – such as Form W-2 data – which is highly valued by identity thieves.
All employers are targets for the W-2 scam. This scheme has become one of the more dangerous email scams. Here’s how it works:

These emails appear to be from an executive or organization leader to a payroll or human resources employee.

The message usually starts with a simple greeting, like: “Hey, you in today?”

By the end of the email exchange, all of an organization’s Forms W-2 for their employees may be in the hands of cybercriminals.

Because payroll officials believe they are corresponding with an executive, it may take weeks for someone to realize a data theft has occurred.

Generally, the criminals are trying to quickly take advantage of their theft, sometimes filing fraudulent tax returns within a day or two.

This scam is such a threat to taxpayers that a special IRS reporting process has been established. Here’s an abbreviated list of how a business should report these schemes. They should:

Email [email protected] to notify the IRS of a W-2 data loss and provide contact information. In the subject line, type “W2 Data Loss” so that the email can be routed properly. The business should not attach any employee personally identifiable information data.

Email the Federation of Tax Administrators at [email protected] to get information on how to report victim information to the states.

File a complaint with the FBI’s Internet Crime Complaint Center. Businesses and payroll service providers may be asked to file a report with their local law enforcement agency.

Notify employees. The employee may then take steps to protect themselves from identity theft. The Federal Trade Commission’s www.identitytheft.gov provides guidance on general steps employees should take.

Forward the scam email to [email protected].

06/06/2018

The Tax Cuts and Jobs Act includes changes to moving, mileage and travel expenses:

Move-related vehicle expense
The new law suspends the deduction for tax years beginning after Dec. 31, 2017, through Jan. 1, 2026. During the suspension, no deduction is allowed for use of an auto as part of a move using the mileage rate listed in IRS Notice 2018-03.

This does not apply to members of the Armed Forces on active duty who move related to a permanent change of station.

Unreimbursed employee expenses
The Act also suspends all miscellaneous itemized deductions subject to the 2 percent of adjusted gross income floor. This change affects unreimbursed employee expenses such as uniforms, union dues and the deduction for business-related meals, entertainment and travel.

For additional guidance, see IRS Notice 2018-42.

Standard mileage rates for 2018
The standard mileage rates for the use of a car, van, pickup or panel truck for 2018 remain:

54.5 cents for every mile of business travel driven, a 1 cent increase from 2017.18 cents per mile driven for medical purposes, a 1 cent increase from 2017.14 cents per mile driven in service of charitable organizations, which is set by statute and remains unchanged.

Increased depreciation limits
The recent legislation also increases the depreciation limitations for passenger autos placed in service after Dec. 31, 2017, for purposes of computing the allowance under a fixed and variable rate plan. The maximum standard automobile cost may not exceed $50,000 for passenger automobiles, trucks and vans placed in service after Dec. 31, 2017.

06/01/2018

IRS reminds extension filers of October 15 deadline

The IRS reminds taxpayers who requested an extra six months to file their 2017 tax return that Monday, October 15, 2018, is the extension deadline for most taxpayers.

For taxpayers who have not yet filed, here are a few tips to keep in mind about the extension deadline and taxes:

Try IRS Free File or e-file. Taxpayers can still e-file returns for free using IRS Free File. The program is available only on IRS.gov. Filing electronically is the easiest, safest and most accurate way to file taxes.
Use Direct Deposit. For taxpayers getting a refund, the fastest way to get it is to combine direct deposit and e-file.

Use IRS online payment options. Taxpayers who owe taxes should consider using IRS Direct Pay. It’s a simple, quick and free way to pay from a checking or savings account. There are other online payment options.

Don’t overlook tax benefits. Taxpayers should be sure to claim all entitled tax credits and deductions. These may include income and savings credits and education credits.

Keep a copy of return. Taxpayers should keep copies of tax returns and all supporting documents for at least three years. This will help when adjusting withholding, making estimated tax payments and filing next year’s return.

File by October 15. File on time to avoid a potential late filing penalty.

More time for the military. Military members and those serving in a combat zone generally get more time to file. Military members typically have until at least 180 days after leaving a combat zone to both file returns and pay any tax due.

04/25/2018