2014 Tax Refunds Will Not Be Delayed Until October 2015

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2014 Tax Refunds Will Not Be Delayed Until October 2015

Today, we contacted the Internal Revenue Service and were informed explicitly that their was no chance of 2014 Tax Refunds being delayed until October 2015. We were also informed that there might be a slight delay due to tax laws not being passed early enough in 2014: article here. This would mean probably a mere two week delay though. We tracked down the original story and Snopes.com wrote an explanation on this. We have posted the article for your viewing.

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What is the Earned Income Tax Refund Credit?

The earned income tax credit (EITC) subsidizes low-income working families. The credit equals a fixed percentage of earnings from the first dollar of earnings until the credit reaches its maximum; both the percentage and the maximum credit depend on the number of children in the family. The credit then stays flat at that maximum as earnings continue to rise, but eventually earnings reach a phase-out range. From that point the credit falls with each additional dollar of income until it disappears entirely (figures 1 and 2). The phaseout begins at a higher income for married couples than for single parents. The credit is fully refundable: any excess beyond a family’s income tax liability is paid as a income tax refund.

Taxation-&-Family-Graphs-EITC-2014
  • Families with three or more children may receive a credit of up to $6,143 in 2014. The maximum credit is $5,460 for families with two children, $3,305 for families with one child, and just $496 for those without children.
  • Taxation-&-Family-Graphs-Table-EITC-Figure-2-2014
  • In addition, 24 states and the District of Columbia administered their own state EITCs in 2014. States typically calculate EITCs as a fixed percentage of the federal credit. The EITC is refundable in 21 states and the District of Columbia.
  • After the Supplemental Nutritional Assistance Program (SNAP), the EITC is the largest cash or near cash assistance program targeted at low-income families. TPC estimates that more than 26 million households will receive a total of $60 billion in reduced taxes and income tax refunds in 20151 (Urban-Brookings Tax Policy Center Microsimulation Model, version 0613-2). The Center for Budget and Policy Priorities, using Census Bureau data estimates that in 2012, “the credit lifted 6.5 million people out of poverty, including over 3 million children.” The IRS reports that more than three-fourths of eligible families claimed the Earned Income Tax Credit in 2005, a much higher take-up rate than that for Temporary Assistance to Needy Families (32 percent in 2009) or for SNAP (72 percent in 2009).
    Taxation-&-Family-Graphs-EITC-Figure-3-2014
    Underlying Data: Download
  • The EITC has been successful at encouraging people, particularly single mothers, to take jobs. Its effectiveness at increasing hours worked is more ambiguous.
  • Critics complain that the EITC is too complex, forcing potential recipients to seek help filing their federal tax return: two-thirds of low-income parents get such assistance, typically from paid tax preparers.
  • The credit’s complexity may also contribute to its relatively high error rate. In 2011, the GAO reported that about $17 billion EITC claims were paid out in error in tax year 2010. The reasons for the high levele of improper payment included high turnover of eligibility, confusion among eligible claimants, and the complexity of the law.
  • The EITC imposes significant marriage penalties on some families. If a single parent receiving the EITC marries, the addition of the spouse’s income may reduce or eliminate the credit. To address this issue, the Economic Growth and Tax Relief Reconciliation Act of 2001 raised the income level at which the EITC begins to phase out for couples to $3,000 above that for single filers. The American Recovery and Reinvestment Act of 2009 (ARRA) increased that amount to $5,000 for 2009 and indexed that threshold to inflation. The Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 extended ARRA’s EITC provisions through 2012. In 2012, the American Taxpayer Relief Act temporarily extended the ARRA provisions through 2017, and permanently extended the EGTRRA provision. In 2014, the phaseout threshold for joint filers will be $5,430 higher than that for singles.
  • Several reforms to the EITC have been proposed. One would increase the credit for childless workers to an amount closer to that for families with children; that would provide much-needed assistance for many additional poor workers.
  • The EITC could also be consolidated with other tax provisions benefiting families with children into a single family credit, with lower phaseout rates and a uniform definition of who counts as a child. That could simplify tax filing and increase the assistance provided to working families with children.
  • Separating the EITC into two parts—one directed at providing an incentive to work and the other at costs associated with raising children—could both increase work effort and provide more assistance for needy families with children.

Discuss this on the Income Tax Forums.

IRS Tax Forms

efile or download Federal Income Tax Forms for Tax Year 2014

This page will be updated as the IRS releases 2014 tax forms. We recommend bookmarking this page to keep track of the latest updates. IRS opens for accepting efiled 2014 returns in January 2015.

Below you find a list of all Forms that are enable for efile. Of course, when you prepare you tax return on efile.com you don’t need to select forms, efile.com does this all for you. Prepare and efile your tax return now online! Since 1990 over 1 billion income tax returns have been efiled safely online.

Check the latest IRS tax deadlines and state tax deadlines and important IRS publications. Continue reading

When does the IRS start accepting tax returns in 2015?

When does the IRS start accepting tax returns in 2015?

 

Tax Season 2015 starts January 23rd 2015.

The I.R.S is expected to start accepting 2015 tax returns as of January 23rd, 2015 per the 2015 IRS Refund Cycle Chart. This doesn’t mean that you will not be able to submit your 2014 tax return to the I.R.S before then though. All of the I.R.S. tax forms are usually available by January 5th, 2015.

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