Mark Jan. 23 on your income tax calendar

The No. 1 thing people need to be aware of this upcoming tax season is filing begins Jan. 23. And the IRS is going to want everybody to continue to e-file as much as possible, said certified public accountant Alan Taylor.

In addition, state income taxes can be filed as early as Jan. 23.

There are a few changes for the tax season, which includes a delay in refunds.

The IRS will not issue refunds until Feb. 15 for individuals with an earned income tax credit or additional child tax on their return, even though you may file on Jan. 23, Taylor said.

“It’s simply a measure on their part,” Taylor said. “I think it has to do with trying to address some of the fraudulent claims that have happened in years past on those particular credits.

“They’ve put some additional due diligence on those type of requirements on the tax preparers for us to look into the verification of information that went onto the returns that led to the earned income tax credits.”

It is one of the bigger changes for the IRS.

“I don’t think it will create, hopefully it won’t create, too serious of a situation for those individuals,” Taylor said. “Hopefully, it won’t stop them from filing their returns early anyway.

“Instead of them getting their refund back in 10 days, it may take two- to two-and-half weeks. It will delay it somewhat, but it won’t be a major issue.”

The New Energy Efficient Home Credit (IRC 45L) expired at the end of December 2016, according to the IRS website.

“So going forth in 2017, some of those energy efficiency credits may no longer be available,” Taylor said.

But the credit for solar electric property and solar water heating property is available for property placed in service through Dec. 31, 2021, according to the IRS.gov website.

The IRS is expanding the number of people receiving ID verification numbers due to identity theft.

“I’ve come across it a few times in our work,” Taylor said. “It depends on the number of returns you do and the locales, whether that identity theft has caused a major issue for individuals.

“But I do know that that’s out there.”

The Affordable Care Act penalty has expanded again. It’s a $695 charge for failure to have insurance per adult. It’s half of that for a child.

The pros and cons for filing taxes online versus going to a tax preparer is going to be cost.

There are a number of websites that will allow you to e-file your return for free, Taylor said.

“The number one negative against using that is, if using an experienced tax preparer, they may be aware of certain items in a tax wall, deductions or limitations that they will be able to provide to you when they prepare your returns that you, as an individual, may not be aware of,” Taylor said.

The issue with state income tax online programs is they have a Louisiana state module to file a state return, but they’re doing it for all 43 states that have state income taxes.

“So, they might not necessarily be up on the last minute changes that happened at the state level.”

The preparer primarily practicing in the state of Louisiana would more likely be aware of more special circumstances at the state level.

Other items afforded to you by having a paid preparer would be if your return is pulled and subjected to examination by the IRS or the state. That person, in most cases, would be available to assist you and represent you and work with you in getting through that process.

“Most reputable tax preparers are not going to leave you to your own devices and prepare your return, shake your hand, take your money and kick you out the door,” Taylor said. “And say, ‘see you next year.’

“If you run into an issue or problem, they should assist you in addressing that question or whatever it takes to help you get through that and make sure you stay in compliance.”

In case the IRS decides to conduct an audit, a best practice for record keeping is to keep returns up to seven years, although most recommend three years.

“The IRS normally can go back three years and evaluate your returns,” Taylor said. “Our practice is we tend to keep everything normally around a five- to seven-year period just to make sure we’ve gotten beyond any statutory limitations or periods like that.”

However, if a person commits tax fraud, there is no limitation.

“If they’ve determined that you’ve fraudulently reported to them to substantially understate your taxes, they pretty much have all weapons at their disposal,” Taylor said.

“And they can go as far back as they feel they need to do to ferret out that fraud.”

Taylor is a certified public accountant with Kolder, Champagne, Slaven & Co. in Morgan City.