How to Get a Copy of Your Prior Year Tax Information

There are many reasons why you may need a copy of your tax return information from a prior year. New clients are encouraged to bring a copy of their prior year tax return to ensure all bases are covered when preparing the current year return. If you do not have a copy of your prior year tax return, you can request a transcript or copy from the IRS. Transcripts are free and available for the most current tax year after the IRS has processed the return. You can also get them for the past three tax years. If you don’t have your copy, the IRS can help. Here are the types of transcripts to choose from:

• Tax Return Transcript.  A return transcript shows most line items from your tax return just as you filed it. It also includes any forms and schedules you filed with your return. However, it does not reflect changes made to the return after you filed it. If you are applying for a mortgage, most mortgage companies require a tax return transcript and participate in the IRS Income Verification Express Service program. If you are applying for financial aid, you can use the IRS Data Retrieval Tool on the FAFSA website to import your tax return information to your financial aid application. In both of these cases, you won’t have to request a transcript directly from the IRS.
• Tax Account Transcript.  This transcript shows any adjustments made by you or the IRS after you filed your return. It shows basic tax return data, like marital status, type of return, adjusted gross income and taxable income, and other transactions such as payments you made.

Here’s how to get a transcript:

• Order Online. The fastest way to get a Tax Return or Account Transcript is through the ‘Get Transcript’ tool available on IRS.gov. Although the IRS temporarily stopped the online viewing and printing of transcripts, Get Transcript still allows you to order your transcript online and receive it by mail. Just click the “Get Transcript by Mail” button to have a paper copy sent to your address of record.
• Order by phone. You can also order by phone at 800-908-9946 and follow the prompts.
• Order by mail.  To order your tax return transcript by mail, complete and mail either Form 4506-T or Form 4506T-EZ. Form 4506-T can also be used to request other tax records: tax account transcript, record of account, wage and income and verification of non-filing.

If you need an actual copy of your tax return, they are generally available for the current tax year and as far back as six years. The fee per copy is $50. Complete and mail Form 4506 to request a copy of your tax return. Mail your request to the IRS office listed on the form for your area. If you live in a federally declared disaster area, you can get a free copy of your tax return. Visit IRS.gov for more disaster relief information.

Plan ahead. Delivery times for online and phone orders typically take five to 10 days from the time the IRS receives the request. You should allow 30 days to receive a transcript ordered by mail and 75 days for copies of your tax return.

Six Reasons to choose Direct Deposit for Your Refund

When you file your taxes, you have options on how to receive your refund. The best way to get it is by direct deposit. Eight out of 10 taxpayers get their refunds by direct deposit. Here are six good reasons why you should do the same in 2016:

IRS Direct Deposit:

1. Is Fast.  The fastest way to get your refund is to electronically file your federal tax return and use direct deposit. You can still use direct deposit even if you file a paper tax return.
2. Is Secure.  Since your refund goes directly into your account, there’s no risk of having your refund check stolen or lost in the mail. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.
3. Is Convenient.  With direct deposit, your refund goes directly into your bank account. There’s no need to wait for your check to come in the mail.
4. Is Easy.  Choosing direct deposit is easy. When your return is prepared, ask your tax return specialist to direct deposit your refund. Make sure provide the correct bank account and routing number.
5. Has Options.  You can split your refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts.
6. Saves Money. Direct deposit also saves you money. It costs the nation’s taxpayers more than $1 for every paper refund check issued but only a dime for each direct deposit made.

You should deposit your refund into accounts in your own name, your spouse’s name or both. Avoid making a deposit into accounts owned by others. Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Check with your bank for their direct deposit requirements.

It's your money...

Missing Form W-2?

Most people get their W-2 forms by the end of January. Form W-2, Wage and Tax Statement, shows your income and the taxes withheld from your pay for the year. You need it to file an accurate tax return.

If you haven’t received your form by mid-February, here’s what you should do:

Contact your Employer. Ask your employer (or former employer) for a copy. Be sure they have your correct address.

Call the IRS. If you are unable to get a copy from your employer, you may call the IRS at 800-829-1040 after Feb. 23. The IRS will send a letter to your employer on your behalf. You’ll need the following when you call:

• Your name, address, Social Security number and phone number;
• Your employer’s name, address and phone number;
• The dates you worked for the employer; and
• An estimate of your wages and federal income tax withheld in 2015. You can use your final pay stub for these amounts.

File on Time. Your tax return is normally due on or before April 18, 2016. Use Form 4852, Substitute for Form W-2, Wage and Tax Statement, if you don’t get your W-2 in time to file. Estimate your wages and taxes withheld as best as you can. If you can’t get it done by the due date, ask for an extra six months to file. Use Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to request more time. You can also e-file a request for more time.

Correct if Necessary. You may need to correct your tax return if you get your missing W-2 after you file. If the tax information on the W-2 is different from what you originally reported, you may need to file an amended tax return. Use Form 1040X, Amended U.S. Individual Income Tax Return to make the change.

Payment Options

Services for preparation of your tax return are due before the return is filed with the IRS, but how can you pay for those services? We offer several flexible options:

• Pay with Cash - We offer Upfront Pricing so you will have an idea ahead of time what the cost to prepare and file your return will be and can have cash on hand.
• No Out of Pocket Expense - Choose a refund transfer* and have the preparation fees withheld from your IRS refund.
• Pay with Debit/Credit Card - We have partnered with Square to accept debit and credit cards for payment of tax preparation fees. And, our out of town clients can receive an invoice by email and pay for the services using Square's secure online payment system.

Daystar Tax Service makes tax preparation easy! With a Lowest Cost Guarantee, Mobile and Personal Service, Upfront Pricing and now multiple payment options, filing your taxes has never been easier!

It's your money...

*http://bit.ly/i8FAI3 for refund transfer details

Health Insurance and Taxes

The Affordable Care Act was passed with the goal of providing affordable health insurance to many who could not acquire coverage. With the passage of the new law, several items became mandatory for individuals relating to their annual tax return. Here is a review of those items:

• Marketplace insurance - The marketplace was established for individuals to acquire health insurance when coverage was not available through employers or the employer provided coverage was not affordable. An individual with health insurance from the marketplace will receive a 1095-A form from the insurance provider. This form must be used to complete the individual tax return.
• Form 1095-A - Individuals with health insurance through a state or federal marketplace will receive a Form 1095-A to be used when filing their tax return. In most cases, the tax return cannot be filed without this form. The marketplace providers had to mail this form to individuals by February 1st. In many cases, you may be able to download and print a copy of this form from your online marketplace account.
• Forms 1095-B and 1095-C - Form 1095-B is required to be sent to those insured with any type of coverage that is not reported on a Form 1095-A or C. This includes coverage from insurance companies, the government (Medicaid, CHIP, Medicare Part A, TRICARE, VA, etc.), small self-insured employers and more. Form 1095-C is required to be sent to those insured by large employers – those that are required to offer coverage to employees or pay a penalty for failing to do so. This form is unique in that it repots both an offer of coverage to an employee and the coverage of the employee if the employer is self-insured and the employee enrolls in coverage. Both of these forms are due to be mailed by March 31st. Individuals are not required to wait for these forms to file their tax return as most individuals already know this information.
• Premium Tax Credit - The premium tax credit is a refundable credit that helps eligible individuals and families with low or moderate income afford health insurance purchased through a Health Insurance Marketplace. This credit can be received in advance, each month, paid directly to your insurance provider or calculated on your tax return. If you received advanced premium tax credits, you are required to file a tax return to reconcile those credits even if you otherwise would not be required to file.
• Shared Responsibility Payment - Starting January 2014, you and your family must either have health insurance coverage throughout the year, qualify for an exemption from coverage, or make a payment when you file your tax return. In general, the payment amount is either a percentage of your income or a flat dollar amount, whichever is greater. The payment amount is capped at the cost of the national average premium for a bronze level health plan available through the Marketplace. For 2015 tax returns, the payment calculation is 2% of income above the filing threshold or $325 per adult ($162.50 per child) with a family maximum of $975. For 2016 tax returns, the payment calculation increases to 2.5% of income above the filing threshold or $695 per adult ($347.50 per child) with a family maximum of $2,085. After 2016, the flat dollar amounts are based on the 2016 amounts plus an inflation adjustment.

Health insurance requirements have a direct impact on an individual’s tax return. Additional forms may be required, more time is involved and many individuals may require assistance from a professional to navigate the process. Contact a personal tax specialist today to help you navigate this process!