IRS online data retrieval tool now available for certain student aid applicants

IRS shuts down PTIN online tool after court rules it can't collect fees for tax preparer ID numbers

Trump budget could solve IRS PTIN payment problem

IRS online data retrieval tool now available for certain student aid applicants

Wednesday, June 07, 2017

The Internal Revenue Service and Department of Education have a graduation gift for some students. The tax agency's income data retrieval tool that makes it easier to apply for federal financial college aid is once again operational for some applicants.

This cool balloon was part of my neighbors' celebration of their son's graduation. Some Texas gusts, however, helped it take a post-graduation trip to our driveway. After snapping this photo (and Instagram video), I helped the light-headed fellow home.

Since 2012, the IRS has made getting income information easier for students and their parents who are seeking financial help by filing a Free Application for Federal Student Aid, or FAFSA. Thanks to the IRS' online Data Retrieval Tool (DRT), folks filing FAFSA can get the necessary family earnings data and have it automatically entered on the application.

Or they could, that is, until March.

That month, the IRS turned off its DRT after indications that it had been hacked. Ultimately, the IRS revealed, around 100,000 taxpayer accounts were possibly exposed to identity thieves.

Now, however, DRT is back up and running for certain financial aid applicants.

Back online for some: The Education Department has announced that folks applying for income-driven repayment plans now can use the IRS' online data retrieval tool to obtain their tax data needed for that assistance.

The affected financial aid is shown on StudentLoans.gov where borrowers apply to repay their eligible William D. Ford Federal Direct Loan (Direct Loan) Program and/or Federal Family Education Loan (FFEL) Program loans under one of the four income-driven repayment plans:

Revised Pay As You Earn (REPAYE),
Pay As You Earn (PAYE),
Income-Based Repayment (IBR), and
Income-Contingent Repayment (ICR).

The reactivated DRT has security updates to encrypt and mask taxpayer data in these cases, according to the Department of Education. That means that transferred tax return information will be hidden from view on the DRT web page and the online income-driven repayment plan application.

As an added protection, the IRS automatically will notify taxpayers by mail when their tax return information is accessed using the DRT.

Folks completing the general FAFSA, however, are still locked out of the system until this fall. The IRS and Education Department have set Oct. 1 as the expected date when the DRT again will be fully accessible for 2018-2019 applications.

You also might find these items of interest:

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Posted on Wednesday, June 07, 2017 at 04:31 AM in Education, Finances, Identity Theft, IRS, Tax fraud, Taxes | Permalink | Comments (0)

Tags: Department of Education, Education, FAFSA, Free Application for Federal Student Aid, Identity Theft, income driven education loan repayment plan, Internal Revenue Service, IRS, online security threat, tax, Tax fraud, tax identity theft, Taxes

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Today's Tax Tip

IRS getting more audit money. Don't make your 1040 an easy target — The House is expected later this week to pass the Senate-OK'ed Inflation Reduction Act. Among the tax provisions in the $739 billion total bill is $79 million for the Internal Revenue Service, with most of that money going toward enforcement efforts. While the focus will be on wealthier tax evaders, all of us want to avoid undue IRS attention. So with more tax examiners on the way, it's a good time for a refresher on audit red flags none of us want to fly. (Aug. 8, 2022)
The 2022 Tax Tips offer ways to file your annual return, along with post-filing advice, important tax news and, of course, ways to cut your current tax year bill. You'll find the monthly assemblages on their own respective pages: January, February, March, April, May, June, July, August, September, October, November and December. Remember, tax tasks and tips don't stop after you file your annual return!

COVID-19 & Taxes

Coronavirus has wreaked havoc
on the 2020 and 2021 tax seasons.
These three Coronavirus (COVID-19) and Taxes pages have details:
March-July 2020,
August-December 2020,
January-December 2021, and
January-… 2022
You can find medical coronavirus resource links further down this column.

All About Kay

OK, some about Kay

Kay Bell — Native Texan (the blog title totally makes sense now, right?). Professional journalist. Tax geek.

My Other Accounts

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Tick ... Tick ... Tick

Tax Season 2022 continues!

Tax Day 2022 is finally over … unless you're one of the millions who have more time to file — looking at you taxpayers abroad and those in major disaster areas — or you got an extension to file your 2021 tax year return. That's fine. In fact, the Internal Revenue Service appreciates some of us spreading out our filings, especially when we and the agency still are dealing with all the complications of COVID-19 and taxes.

That's why the ol' blog's focus now is on all y'all still working on returns. But I haven't forgotten my organized taxpayer readers, who are already looking for ways to reduce their 2022 tax year bills. Yep, that amount is adding up, but there are moves you can make. The monthly tips and reminders a little further down this column can help everyone, regardless of which tax year you're working on.

Those on extension should keep a keen eye on the countdown clock below. It will help you track the days tick, tick, ticking off toward that absolutely final fall filing due date of Oct. 17. Yep, it's a few days later this year.
Note: I'm in the Central Time Zone, so adjust accordingly for where you live.

Time for Tax Tasks

The Dog Days of Summer
are here!
For many of us, that means taking it easy like the pup below during these hot, sultry August days as summer winds down.

via GIPHY

But we can't dog it too much.
Making some potentially money-saving tax moves this August can really pay off. So let's get to it!

Aug. 1: School soon will be back in session. That means students need supplies. Good news for them and their parents: this month 15 states are holding back-to-school sales tax holidays. These no- or reduced-tax events are in Arkansas, Connecticut, Illinois, Iowa, Maryland, Massachusetts, Missouri, New Jersey, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Virginia, and West Virginia.

Aug. 5: The tax holidays will help ease the high cost of school supplies and other qualifying purchases a bit, especially in these inflationary times. But some taxpayers are agetting more help. Sixteen states are issuing inflation relief payments. If you're in one of them, make sure your state tax department has your correct information, since that's how most of the inflation aid money will delivered.

Aug. 10: Restaurants are still recovering from the challenges of operating during a national health crisis, especially now that new COVID-19 variants are spreading. If your favorite eatery is now seating diners indoors, still take precautions, aka mask on until that meal arrives, please! If you're still doing take-out and deliveries, those business owners appreciate that support, too. And regardless of whether you're eating out or still getting food brought to your house, remember to tip your server or delivery person.

If a tip isn't included in your food delivery charge, click the image above to calculate how much to tip the person who brought it to you.

As for servers who now are back on the job, remember that your tips are taxable income. If you worked at least some of July at a job where you got gratuities, you need to account for them today if they came to at least $20 last month. Use Form 4070 to report your tips today to your employer.

Aug. 17: Did you get an extension back in April to file your tax return this fall? Well, that new due date — Oct. 17 — is now just two months away. But you don't have to wait until that day is, well, just days away. You can get to work on your tax paperwork now and be done with it any time before then.

Whenever you do get around to finishing your tax return, the IRS recommends you do so electronically. Check out ways to e-file at no cost, including via Free File, which is, as its name says, free. The official electronic filing webpage is Free File on IRS.gov is available to qualifying taxpayers until midnight, Eastern Time, on Oct. 17.

Free File this year is available for taxpayers whose adjusted gross income is $73,000 or less. That income level applies to all filing statuses. This year, 8 software programs are available to eligible filers. Spoiler: The two biggies, Intuit's TurboTax and H&R Block, are not among the choices. The two leading tax prep programs decided to end their participation in the program.

Aug. 22: The early part of the 2022 Atlantic/Gulf of Mexico hurricane season was, thankfully, not that bad. But August is when things tend to literally start heating up. The National Oceanic and Atmospheric Administration's (NOAA) National Hurricane Center says that most tropical storm activity occurs between mid-August and mid-October. If you haven't yet prepared — physically, financially, and tax wise — it's time to do so

Uncle Sam's official forecasters at the NOAA Climate Prediction Center expect 2022 to bring as many as 21 named storms, with six to 10 possibly becoming hurricanes. Three to six of those could reach major status, which is category 3, 4 or 5 with winds of 111 mph or higher. Regardless of the count, it only takes one to wreak havoc. The countdown clock below can help you keep track of how many more days you have to worry about tracking any size or type of tropical storms.

You also might want to check out the ol' blog's special Storm Warnings.
These multi-page collections of posts offer tax advice on preparing for, recovering from and helping those who sustain damages from the many ways that that weather goes wild. That includes claiming uninsured losses from a major natural disaster as an itemized tax deduction.

Aug. 26: The stock market has been up and down, then up and down, then … You get the idea. All the gyrations mean it's time to review your portfolio. Periodic rebalancing to meet your financial goals also could provide a tax break. If some of your taxable holdings have dropped in value, you can sell them and use the loss to offset other assets' gains. Remember, though that this tax loss harvesting strategy should be used only is you really want to sell the asset, not just use it to cut taxes. As the old (and apropos this month) saying goes, never let the tax tail wag the financial dog.

Aug. 31: If you've already filed your 2020 taxes, were you surprised by either the size of your refund or how much you owed? If so, now's the time to make sure that doesn't happen next year. The IRS' online estimator can help you more accurately adjust your payroll withholding.

Small Business Tax Calendar: Important filing, deposit and record keeping dates throughout the year that your company needs to know. You can get more tax calendar information at the IRS' online calendar page and view the full year's important business and individual tax dates in IRS Pub. 509.

State Tax Help

Don't forget your state taxes!
Forty-three states and D.C. collect personal income taxes. But even if you live in of the seven states without an income levy, you still face other state (and local) taxes.

State Tax Departments provides links to your state's Web page. The companion page, Tax Tidbits, is the compilation of blurbs about each state's tax laws. And for more state tax news, check out all our state tax bloggings.

Tax Forms

Thanks to our increased use of tax preparers and computer software, many of us don't see our tax forms until we sign and file them. But knowing what's on these documents, either in paper or digital form, and why the IRS wants it is key to understanding our tax system. And knowledge definitely is power, especially when it comes to tax savings. Find this valuable information in the ol' blog's special Talking Tax Forms page.

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I gotta tell ya ...

AKA Disclaimer:
I am a professional journalist who has been covering tax issues since 1999.
I am not a professional tax preparer.
The content on Don't Mess With Taxes is my personal opinion based on my study and understanding of tax laws, policies and regulations. It is provided for your private, noncommercial, educational and informational purposes only. It is not a recommendation of any specific tax action(s) you should or should not take. Similarly, mentions of products or services are not endorsements. In other words, my ramblings on the ol' blog are free advice and you know what they say about getting what you pay for. That's why when it comes to filing your taxes, I urge you to get additional, professional, paid-for guidance from an accountant, Enrolled Agent or other qualified tax preparer who is familiar with your individual tax circumstances.

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August 2022

Tell it to the Hill

While it's easy to rail at the IRS, for the most part we can thank — or blame — our tax laws on Congress and the White House. So if you have an issue with tax legislation or want a tax bill passed, you need to let your federal legislators and the White House occupant know of your concerns. You can find out who in Washington, D.C., to contact (and how), as well as get information on your local lawmakers for matters, tax or otherwise, closer to home, at USA Gov.

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