IRS Opens 2015 Tax Season With Fewer Resources

Why the 2015 Tax-Filing Season Will Be Tougher Than Usual

The 2015 tax-filing season is almost upon us. The Internal Revenue Service (IRS) announced at the end of December that it will begin accepting tax returns for the 2014 fiscal year starting Jan. 20.

But the 2015 tax season could see some major hang ups for taxpayers. It’s the first time taxpayers will have to include information in their tax returns to meet the requirements of the Affordable Care Act. On top of the newly complicated tax code, Congress cut the IRS’ budget and the agency is operating with fewer personnel.

IRS Opens 2015 Tax Season With Fewer Resources

The IRS announced Dec. 29 that it will be opening the 2015 tax season as scheduled on Jan. 20. It was unclear in December if the IRS would be able to begin the tax season as usual, due to legislation to extend certain tax breaks that was not signed into law until Dec. 19.

“We have reviewed the late tax law changes and determined there was nothing preventing us from continuing our updating and testing of our systems,” said IRS Commissioner John Koskinen in a statement from the IRS. “Our employees will continue an aggressive schedule of testing and preparation of our systems during the next month to complete the final stages needed for the 2015 tax season.”

But the IRS is operating on less money and manpower, reports CNN Money. The IRS’ budget for 2015 is 10 percent lower than it was in 2010, even though costs for the agency have increased since. IRS staffing is down 8 percent, while money allocated for staff training was cut by more than 85 percent.

Affordable Care Act Complicates 2014 Tax Code

Cuts to the IRS’ budget might have been less worrisome, save for the new rules introduced by the Affordable Care Act (ACA) and other legislation. As tax filers deal with new forms and rules for the first time, it’s expected to be a particularly confusing and frustrating tax year for many filers; but the IRS will have less manpower and resources to offer support.

The 2015 tax season marks the first return that taxpayers will fill out following the enactment of the Affordable Care Act, which includes many provisions that relate directly to taxes. Taxpayers will be required to provide proof of 2014 insurance coverage, as well as indicate whether they received tax credits to help cover insurance costs.

“The ACA is going to result in more confusion for existing clients and many taxpayers may well be very disappointed by getting less money and possibly even owing money,” said Charles McCabe, president of Peoples Income Tax and the Income Tax School, to The Wall Street Journal.

Some taxpayers who received health insurance subsidies will be disappointed to see a smaller refund if the tax credits they received were too large — or might even find that they owe the government money. H&R Block estimates that up to 6.8 million Americans will end up owing money after completing their tax returns because they were given larger health insurance tax credits than needed through the ACA.

How to Appeal Property Taxes

If you think you’re paying too much, take these steps. Home values are up, and that may mean your property taxes have gone up, too. But what if you believe they’re too high? You may have grounds for an appeal, and in most cases, you can do it yourself.

Step 1
First, look for errors that could be unfairly inflating the value of your home. Ask your local assessor’s office for a property record card, which lists the factors used to come up with your assessment. This information may be available online. Fixing obvious mistakes such as incorrect square footage or the wrong number of bathrooms could lower your property value.

Step 2
Next, check out tax bills for similar properties in your neighborhood. This is public information and may also be available online. Compare your home with others in your tax classification, which usually lumps together homes of similar size and age. If your assessment is much higher than the assessment for other homes in your group, you could have a good shot at an appeal.

Step 3
Finally, make sure you’ve been given all of the tax breaks you deserve. Most states offer exemptions, lower tax rates or reduced assessment ratios for certain taxpayers, such as primary homeowners, senior citizens, or veterans. Check your state’s department of taxation Web site for more information. You can also find more information on appealing a property tax bill at NTU.org, the Web site for the National Taxpayers Union. Looking for more ways to lower your tax bill? Start by making sure that you aren’t missing out on the most common overlooked tax deductions.