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IRS e-file began Jan. 17; most can file immediately
WASHINGTON — The Internal Revenue Service opened the 2012 electronic tax return filing season Jan. 17.
According to the IRS, e-file is the best way to get fast refunds and ensure accurate tax returns.
E-file revolutionized the way the IRS processes tax returns and made speedy refunds possible. More than 112 million income tax returns were e-filed last year, or 77 percent of all individual returns filed.
Taxpayers can e-file their tax returns one of three ways: through a tax return preparer, through self-preparation software or through IRS Free File. The IRS does not charge for e-file. Many tax return preparers and software products also offer free e-filing with their services. Free File offers free tax preparation and free electronic filing.
Any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically. The IRS encourages taxpayers to use tax return preparers who offer IRS e-file.
Taxpayers should only use paid preparers who sign the returns they prepare and enter their Preparer Tax Identification Numbers (PTINs). Preparers are required to sign the returns they prepare and include their PTINs. Although paid preparers sign returns, taxpayers are legally responsible for the accuracy of every item on their return. Preparers are also required to give taxpayers a copy of their returns.
IRS Free File also began Jan. 17. Everyone can use Free File — either the brand-name software offered by IRS’ commercial partners or the online fillable forms.
Individuals or families with 2011 adjusted gross incomes of $57,000 or less can use Free File software. Free File Fillable Forms, the electronic version of IRS paper forms, has no income restrictions.
IRS releases adjustments to 2012 tax numbersPOULSBO — Federal tax law requires that certain tax numbers be adjusted for inflation each year. Here are some of the 2012 tax numbers you’ll need to use as you get started with this year’s tax planning.
- The standard mileage rate for business driving remains at 55.5 cents per mile for 2012. The rate for medical and moving mileage decreases from 23.5 cents per mile to 23 cents per mile. The general rate for charitable driving remains at 14 cents per mile.
- The maximum earnings subject to Social Security tax increases to $110,100. The earnings limit for those under full retirement age is $14,640. For those at full retirement age, there is no earnings limit.
- The “nanny tax” threshold increases to $1,800 for 2012. If you pay household workers more than this amount during the year, you’re responsible for payroll taxes.
- The “kiddie tax” threshold is unchanged for 2012. If your child under age 19 (under age 24 for students) has more than $1,900 of unearned income this year (e.g., dividends and interest income), the excess could be taxed at your highest rate.
- The maximum individual retirement account (IRA) contribution you can make in 2011 remains unchanged at $5,000 if you’re under age 50 and at $6,000 if you are 50 or older.
- The maximum amount of wages employees can put into a 401(k) plan increases to $17,000. The 2012 maximum allowed for SIMPLE plans remains at $11,500. If you are 50 or older, you can contribute up to $22,500 to a 401(k) and $14,000 to a SIMPLE plan.
- For 2012, the maximum amount that can be contributed to a health savings account (HSA) increases to $3,100 for individuals and $6,250 for families.Tax legislation could change these and other important tax numbers at any time.