Foundation program offering tax-time help

Tis the season to file for 2017’s income taxes, with the Internal Revenue Service starting to accept returns last week.

The IRS plans to receive 155 million individual tax returns this year, with the filing deadline set for April 17. Usually falling on the 15th, this year that date is on a Sunday, and the holiday observance of Emancipation Day in Washington D.C. the following day pushes the deadline further out to April 17.

For Wrangell taxpayers, a program sponsored by the American Association of Retired Persons Foundation will be offering free filing assistance. Ann Schnell and Paula Rak are voluntary preparers under its Tax-Aide program, which each tax season accommodates 5,000 neighborhoods across the country.

Schnell has been working with the program for 11 years and Rak for 10. While Schnell has a background in tax consultancy Rak explained she had taken the position because it seemed like interesting work. Also, she said it was a way to help the community.

“A lot of people are afraid of the IRS, and they feel so much more comfortable when they know their tax returns have been prepared properly,” she said.

The Tax-Aide program assisted 133 individual filers in Wrangell last year, plus more previous-year returns. While adjusting to a new e-filing program last year caused some delays in the process, Rak said this year should be easier now that returning filers have been logged into the system.

“We had people backed up the whole time,” she recalled. “This year it’s carrying forward, so it should go a lot faster.”

AARP provides its tax return preparers with laptops, software, printers and training. In mid-December Rak and Schnell were sent to Anchorage, where they took part in an IRS-run program. At each year’s training the two brush up on changes in the tax law from the previous year, and practice filing returns before receiving their updated certification.

A big change on the horizon for filers is the new tax overhaul passed by Congress in late December and signed into law. Under the legislation individual and jointly filed income tax rates were readjusted, the corporate tax rate was reduced from 35 to 21 percent, and penalties for uninsured individuals under the Affordable Care Act have been repealed. However, changes only take effect for 2018.

“Things haven’t changed that much for 2017 taxes. But of course the new tax law that passed in December is going to change things for 2018 taxes,” said Rak. “So the next filing season, there are going to be some changes.”

Under AARP’s Tax-Aide, filers can bring in their paperwork and documentation for assistance, regardless of age. Rak explained the sorts of tax filings they can help with are largely limited to individual and previous-year income returns. For some of the more complex returns taxpayers may need to seek help from an accountant.

“There are certain types of returns we can’t do. Let’s say fishing boat owners, we can’t do those. We can do the deckhands,” she said.

For documentation the pair will need W2 forms, 1099s – “Anything that shows your income or deductions,” Rak added – as well as identification and the social security numbers of any claimed dependents. For those participating in the ACA Marketplace, 1095-A forms showing premium tax credit information will also be necessary.

“That can be pretty hairy for people,” Rak said about filing for the Marketplace. At the start of the year participants have to estimate their expected income, and their subsidies are based on that. “You have to reconcile at the end of the year your income and the subsidies you got.”

Tax refunds will not be available before late February this year, Rak said, due in part to identity theft concerns on the part of the IRS.

“All they need is someone’s social and birthdate, and they can make a return and make up all the numbers, have refunds sent to their direct deposit, and that’s it. A person who’s had that done to them doesn’t know until they go to file, and the IRS says ‘Oh no, you’ve already filed.’”

Rather than going through that headache, refunds will be delayed by a few weeks. Also, by law the IRS cannot issue refunds claiming Earned Income Tax Credit and the Additional Child Tax Credit before mid-February. Those returns will be processed as received, but it is likely direct deposit refunds will begin appearing by February 27.

Schnell and Rak began the program last weekend, and can be found every Saturday from noon until 4 p.m. in the Nolan Center visitor center office through April’s tax filing deadline.