Tuesday, January 21, 2014

IRS Eyes New Tax Filing Approach for 2014

Courtesy Invest-Smart.org

By Joe Garza

Just like other laws, tax laws change, get more complicated, and change to benefit (and disappoint) different taxpayers. In the coming year, you will most likely to see a few adjustments to income tax, including adjustments for inflation, new regulations for same-sex partners, and some punishments for {not paying for health insurance either through a private provider, or the federal government. One defining characteristic of the '14 legislationtax season may be its several-week delay, courtesy of the U.S. government's shutdown back in 2013. But, this year will also mark the beginning of a completely different type of national tax change — not only the amount we pay, but in the way we file.

2014's New Federal IRS Tax Guide

Not long ago, the Internal Revenue Service announced the release of a “newly revised comprehensive tax guide,” or, as some people call it, Publication 17: a resource that aims to assist people file their taxes this year. This guide touts greater interactivity and tips for “tax-saving opportunities.” Among the inclusions made to the new IRS guide is educational material on the American Opportunity Tax Credit which affects college students and their guardians, and also Earned Income Tax Credit and Child Tax Credit.

Distributed by the IRS since the 1940’s, the new release of the tax guide will still contain info on how to report income, capital gains and losses, IRA’s (Individual Retirement Accounts) and fundamental educational material. However, at nearly 300 pages, it's highly unlikely that many taxpayers will have the time to use the publication in its entirety. Considering the growing complexity of Federal income tax, it comes as no surprise that the IRS posts almost daily updates to forms and instructions on their website.

Less Face-to-Face Interactivity

The new IRS policy demonstrates a huge transition away from face-to-face interaction, with many more online resources to help people get through their taxes.

Tighter IRS budgets — courtesy of sequestration 2013 — mean there are far fewer resources available for in-person tax submission help. In lieu of a human being, those filing taxes will be directed to a multitude of online resources, including over 13,000 official partnering (volunteer) sites, and resources on IRS.gov - like the IRS 'Free File' program. Even very inquiries are now handled online or through one of the IRS' various hotlines. With such online assimilation becoming so ubiquitous, it makes sense that a branch of the government would begin to offer more of its material in the form of online material.

A Shift Toward Web Accessibility

While the lack of walk-in help will probably be frustrating for some people, some will be relieved to know they can take care of more tax-related problems online than ever. Now, taxpayers can view and authenticate their tax forms online. The IRS will also continue to give Employee Identification Numbers via its website. To avoid handling taxpayer inquiries concerning the status of income tax refunds over the phone, the IRS will now handle all related questions online as well.

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