Tax Preparation

Tax Preparation

It's just about that time to start picking up your W2's and filing your taxes. But there could be some filing delays and things you need to know before you begin the filing process. This tax season is shaping up to be one of the worst for the IRS and potentially for tax payers.

"This budget marks the fifth year in a row that the IRS has seen a budget reduction," said IRS Commissioner John A. Koskinen. "The cumulative effect of these cuts will significantly undermine our ability to serve taxpayers."

Many of the problems come from the series of budget cut, while also implementing new duties for the IRS, like the Affordable Care Act. While many people haven't officially started the filing process, they are starting preparations. Come next week, Liberty Tax Service in Wichita Falls expects their office to start filling up.

“Right now the IRS is scheduling to be open on January 20th to receive tax returns,” said manager Gene Nadeau. 

Nadeau said he is already making preparations in hopes to have a number of them ready for the first day open, but he said he is already running into a few problems.

"They have said the IRS funding is down," said Nadeau. "I'm experiencing it already when I'm trying to call the IRS for tax payers. The wait times to talk to someone is exceedingly longer than it has been in the past."

Only about 50 percent of taxpayers, who call, can reach us over the phone, according to Commissioner Koskinen. Around 24 million people will not be able to reach IRS representatives over the phone. Although they will be very hard to reach, not everyone will need to contact the IRS directly.

The only reason one should have to contact the IRS directly is if there were problems with your refund, if you have been a victim of identity theft, received a letter from the IRS or need information from prior refunds. But due to extreme budget cuts additional measures have been taken.

 The 2015 budget is comparable to the IRS budget of 1998, according to Koskinen.  And a smaller budget means fewer employees, and cutting cost in other areas. 

"I am deeply disappointed by this troubling development," said Koskinen.

Although the massive budget cuts are weighing in hard during the tax season another factor is the Affordable Care Act. This is the first year people will need to file with the new insurance.

"The added problem this year is resolving the Affordable Care Act issues on their tax returns," said Nadeau.

In 2014 around 800,000 Texans signed up for health insurance through the Affordable Care Act.  That may seem like a lot, but roughly five million Texans remained uninsured. 

That's where most of the problem you may see this year stem from. This is also the first year for healthcare penalties. If you failed to sign up for any health insurance you will face fines when you go to file your taxes.

"That could be $95 per adult on their tax return, to up to $47.50 for children, or one percent of their income," said Koskinen.

Not all of the people signing up will be facing penalties. Those with income too low to afford the healthcare may not be facing penalties. For example, if you are filing as single and you income is $12,000 or less you may be exempt from any fees. And there are nearly 20 different exemption, and Liberty Tax Service says they will be combing through those in hopes of easing the burden.

Those that did sign up for a healthcare plan will have to wait on an additional return before you submit your file. But regardless of which tax service you use tax experts advise people to get started as soon as you receive you W2's in the mail.

Brittany Costello, Newschannel 6