IR- 2017-114, June 28, 2017
WASHINGTON — The Electronic Tax Administration Advisory Committee (ETAAC) today held its annual public meeting and released its annual report to the IRS and the Congress, which includes numerous recommendations on improving electronic security in the tax system and fighting tax fraud related to identity theft.
The Committee's principal recommendations fall into four broad categories:
The Committe also reported that an estimated 87.3% of all individual tax returns; 83% of partnership returns; 76.3% of Corporate returns; 80.2% of Fiduciary returns; 62% of exempt organizations; and, 36.6% of all employment tax returns were efiled for the 2016 tax year.
State and local sales tax deduction--The 2015 PATH Act removes “for tax years beginning after Dec. 31, 2003 and before Jan. 1, 2015" The election is thus made permanent, and is available for tax year 2015. retroactive (see effective date below).
EIC marriage penalty is reduced and made permanent--The 2015 PATH Act makes permanent the increase of $5,000, as adjusted for inflation, in the credit phaseout amounts for married couples filing a joint return.The 2015 PATH Act makes permanent the increase of $5,000, as adjusted for inflation, in the credit phaseout amounts for married couples filing a joint return. This change reduces the marriage penalty under the EIC for tax years after 2017. The marriage penalty arises where both spouses have income, because joint filers must combine their AGI or earned income in figuring the phaseout. This penalizes some individuals who receive a smaller EIC as a married couple than they would if not married.
Mortgage insurance premiums are deductible until Jan 1, 2017--Premiums paid or accrued during the tax year for qualified mortgage insurance (defined below) in connection with acquisition indebtedness for the taxpayer's main or second home are treated as qualified residence interest (QRI), and so are deductible. Amounts paid or accrued after Dec. 31, 2014 (2015 PATH Act §152(b)DivQ), and before Jan. 1, 2017. The deduction is phased out for taxpayers with adjusted gross income (AGI) over $100,000 and is completely eliminated when AGI exceeds $109,000.
Similarly, a qualifying child isn't taken into account for any tax year for which the child is associated with a TIN that was issued after the due date for filing the return for the tax year. Thus, an individual cannot retroactively claim the EIC by amending a return, or filing an original return if he failed to file, for a year in which he didn't have a valid SSN. The provision doesn't specify whether the “due date for filing the return” includes extensions.
Social security numbers are required for the Child Tax Credit--The child tax credit (CTC) isn't allowed to a taxpayer for any qualifying child unless the taxpayer includes the child's name and taxpayer identification number (TIN) on the tax return for the tax year. A TIN includes a social security number (SSN), an individual taxpayer identification number (ITIN), or an adoption taxpayer identification number (ATIN). The provision doesn't specify whether the “due date for filing the return” includes extensions.
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