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.

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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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Filing Season Tax Tips

Who must file a tax return — Most of us who make any money generally must file a tax return. Here are the details on the three filing requirements — age, income and filing status — that will determine whether you're one of the millions from whom the Internal Revenue Service demands a Form 1040. (Jan. 17, 2020)
Did you miss a tax tip posted above? No worries. They are, or eventually will be, collected in the 2020 Filing Season Tax Tips pages, one for each of the three-and-a-half months that we focus on our 1040s: January, February, March and — tah-dah! — April. After a brief break to catch our post-filing deadline breath, the Weekly Tax Tips, like these from 2019, will return.

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

Tick ... Tick ... Tick

Tax Year 2020 Countdown
Happy New Tax Year! Are you ready to file your 2019 tax return? Me neither.
But we need to start thinking about it now because April 15 will be here before we realize it. At least the 2020 filing season should be a bit easier than last year, when we submitted our first filings under the Tax Cuts and Jobs Act (TCJA). Right? Let's be optimistic: Right!
To help make sure things go smoothly and you don't overlook any tax breaks or upcoming filing deadlines, check out the tips a little further down this column. And keep an eye on the countdown clock just below. It will help you keep track of the arrival of Tax Day 2020.
Note: I'm in the Central Time Zone, so adjust accordingly for where you live.

Time for Tax Tasks

Welcome 2020!
Are we glad to see you! Just in case you think that's a question, the answer is a resounding yes!

Click image to see other canines (and cats, too) decked out in their New Year's Eve finery.
Jan. 2: The pup above doesn't look too impressed by the arrival of 2020. Maybe he's remembering the hassles the new tax law created last year, like folks not getting the refunds they expected or even owing Uncle Sam when they finished their 1040s. If you haven't already adjusted your withholding, do so today, or the first day you're back in the office after the New Year's Day break. The Internal Revenue Service has a new Form W-4 and online withholding estimator to help you get the numbers just right.

Jan. 6: The IRS' online withholding assistant or your tax pro can help you with your withholding amount and other tax numbers, but it's also a good idea going into a new year to have an idea of your tax bracket and income tax rate. The rates tend to hold steady (until Congress starts fiddling), but the brackets are adjusted annually for inflation. The first post in the series shows the 2019 and 2020 tax brackets.

Jan. 10: Does your job include tips? If so and you received at least $20 in gratuities in December, use Form 4070 to report them today to your employer.

Click image
to calculate how much to leave your server.

Jan. 13: Did some of those tips come from a side hustle? That's just one of the tax matters to think about when you're part of the gig economy.

Jan. 15: One of those additional tax considerations self-employed people, whether part- or full-time, and anyone else who gets payments that don't have taxes withheld, is estimated taxes. These are four extra tax payments a year to cover your untaxed earnings. The last estimated tax payment for the 2019 tax year is due today.

Jan. 20: Many people spend Martin Luther King Jr. Day as a day of service.

Click image to find out ways
you can volunteer on MLK Day.
Taking time on Dr. King's holiday to volunteer at a charity isn't tax deductible, but some costs associated with volunteering could help reduce your tax bill if you itemize. Since the Tax Cuts and Jobs Act (TCJA) changes greatly increased standard deduction amounts, even fewer filers now itemize. But tax breaks aren't the real reason most of us give to our favorite nonprofits, so don't let that stop you from doing good deeds today (or any other).

Jan. 23: Although employers have until the end of January to send you your W-2 annual earnings statement, many companies and other payors start issuing tax statements, such as charity receipts, 1098s and the various 1099s, earlier, either by snail mail or electronically. You'll need them to file your return, so start collecting them in one place so they'll be at your fingertips when you're ready to file.

Jan. 27: OK, you're ready to file and you've decided to do it yourself using tax software. Be sure to check out Free File, which, as its name sounds, offers eligible taxpayers access to tax software and e-filing at no cost and usually opens for business on the IRS website around this time.

This is the 18th year the IRS has partnered with Free File, Inc., the alliance of participating tax software companies. It also reached a new agreement with the group to help ensure taxpayers searching for tax software can find the appropriate Free File option.

This year, qualifying taxpayers — that's those with income of $69,000 or less — can use one of the expected dozen or so special commercial tax software programs at IRS.gov's Free File online page. Even if you make too much to use the online software, you can file using Free File's fillable forms.

Jan. 31: If, however, you're still unsure about doing your taxes yourself, now's the time to find a qualified tax professional to help you fulfill your tax responsibilities. Make sure you pick the paid preparer who bests meets your tax needs. And definitely thoroughly check out the preparer you pick before handing over details of your tax life.

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.

Mapping Your Tax Route

Do you get lost doing your taxes? Check out the Taxpayer Advocate Service's Taxpayer Roadmap.

This publication, designed along the lines of a subway map, shows the many routes and detours of a taxpayer's journey through our elaborate Internal Revenue Code and the Internal Revenue Service's enforcement of our tax collection system.

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Kudos Et Cetera

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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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