As the tax season gets closer, companies and individuals will again deal with the issues of confusion and paperwork. However, the next filing year can be different since there are many new updates on the tax front. The following are some of the things that you have to know when filing your tax return.
Tax Accountants Tend to Get Swamped Near the Tax Season
Starting to collect documents and determining how you will file your taxes is a great idea. A lot of accounts may be too busy helping procrastinators who wait until later time to begin the process. Early filing preparation will help in avoiding document problems and accountant time constraints.
There are Evolving Tax Filing Methods
How people file their taxes is evolving with a lot of them prefer to use tax preparation software over manual filing. For instance there are affordable and free services for helping you fill out tax returns. But, the software can cost you up to $79.99 when you are a small business owner or self-employed. The Internal Revenue Service provides Free File Software; however, it is just available to people an annual income that is below $62, 000.
There are Higher Obamacare Penalties
The current changes to Obamacare are substantial, particularly on the aspect of penalties. Although the Affordable Care Act imposed some penalties for people who have no qualifying health care coverage, there were small initial penalties. In case you did not have 2014 coverage, the penalties began at $92 per adult or 1% of the household income. Last year, the penalties increased to $325 per adult or 2% of household income when you did not have health insurance in 2015.
For a lot of tax payers, such penalties can be confusing as they file their federal tax return. But you can try to relieve the confusion by using affordable care act filing software at etc.com. When you have concerns, consult a tax expert.
Gather your Documents Now
In any year, tax planning is not fun; however, the current year is likely to be tough for a wide variety of groups. It is imperative for taxpayers to understand the changes in Obamacare, for instance, and the way the IRS will make use of their personal data in order to try to prevent identity theft that will also require more effort from taxpayers.
In this kind of environment, planning and researching early will help you get started. Begin collecting personal tax documents early, particularly your Affordable Care Act documents where more confusion may take place.