Tax season comes with surprises

  • By IAN FOLEY
  • Monday, February 16, 2015 10:50pm
  • News

Due to new laws and other factors, this tax season has caused surprises for some taxpayers. While there are many questions about filing 2014 returns, there are just as many people and organizations trying to help answer them.

Jim Duffield, CPA for Liberty Tax Service in Kenai, said one reason this tax season is unlike past years is due to the Affordable Care Act.

“Every tax season is crazy,” Duffield said. “This one is definitely different. It’s different in the fact that the Affordable Care Act — everyone calls it Obamacare — is finally in, what we would call, full swing.”

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For 2014 tax returns, Duffield said people need to show documentation of health coverage during the year. If an individual didn’t have health coverage, they could be subject to a tax penalty.

According to a Gallup Poll, 13.4 percent of Americans were uninsured near the end of 2014.

Duffield said that some local people have been shocked at the penalties for not having coverage, which he says have averaged around $600, but have been as high as $2,000.

“People are getting really surprised, because a lot of them hadn’t been paying attention and didn’t realize the situation it was going to create,” Duffield said.

Duffield said the IRS, under the current presidential administration, has become a lot more aggressive when collecting tax penalties.

“We’re seeing them go after penalties and things like they haven’t since the 1970s,” Duffield said.

For people who owe money to the IRS, but can’t make a full payment, there are options available, Duffield said.

“They can do an installment agreement with the IRS and make monthly payments to them,” Duffield said.

Aside from the Affordable Care Act, another issue facing Alaskans is reporting Permanent Fund Dividends, which is taxable income, according to the Alaska Department of Revenue. Because the 2014 PFD was more than $1,000, dependents under 18 years of age who received a PFD also need to report their income, according to the IRS.

Duffield said that when trying to call the IRS, it’s not uncommon to be on hold for an hour before getting assistance.

To alleviate the long wait times before speaking with an IRS representative, people are encouraged to explore online resources before calling with questions, according to a press release from the IRS.

“The entire week of the Presidents Day holiday marks a peak time in the number of calls to the IRS, and we encourage taxpayers to visit IRS.gov as the best place to get quick help and answers to your questions,” wrote IRS Commissioner John Koskinen.

On the Kenai Peninsula, the AARP Tax Aide offers free tax preparation assistance at the Soldotna Library every Thursday leading to the April 15 deadline for filing tax returns.

The IRS’s “Free File,” which offers free tax return preparation help, is available for taxpayers who made $60,000 or less last year, which would account for 70 percent of taxpayers nationwide, according to the release.

While there are several free tax assistance tools available, Duffield said he cautions people who want to complete their tax returns themselves.

“If at all possible, people really should see a tax professional to help them with their tax situation,” Duffield said.

 

Reach Ian Foley at ian.foley@peninsulaclarion.com.

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