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What's new with Your Tax Professional

Several items might be different for your session with your tax professional this year.

First, Congress did not pass legislation late in the year that would have created a delay in electronic filing.   The software providers and the Internal Revenue Service are on schedule to start electronic filing on schedule.

Second, Congress did pass what is now called the Path Act of 2015 (PATH) in the middle of December.  Without getting into the details it means that many provisions of the law which always were in jeopardy because they were going to expire have been made permanent or extended for several years.  The implication is a tax professional can project or advise on 2016 and future years’ taxes with more certainty.  For example, your professional no longer has to qualify a statement about college credits being available.  Also no longer will those over 70 ½ have to wait until the last week of December to make charitable contribution from their IRA which will count as part of their Require Minim Distribution (RMD).  There is less uncertainty with PATH being passed.

Third, fully expect to be asked about your Medical insurance coverage during 2015.  The original schedule had employers issuing a form 1095-C in January.  Now the deadline has been pushed back to March 31.     For some taxpayer this will be easy because their employer will have provided a form 1095-C before the new deadline.  Come prepared with evidence of the medical coverage you do have at the time of the appointment.

Why?  The IRS has given the task of implementing compliance to Obamacare to a large extent to tax professionals.   The IRS response is to push the burden to the tax professional.  In short, if a tax professional is found negligent in not asking the proper questions determining if the client had medical coverage, the tax professional can be fined. For tax year 2016 returns the fine will be $500 per return.  The implication is that if a tax professional is not asking you questions about medical coverage something could be amiss.  Come prepared with your proof of coverage so that there are no delays in completing your return.