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

COVID-19 home tests are now tax deductible — Not many taxpayers claim itemized itemized medical expenses, primarily because they must have enough to exceed 7 percent of their adjusted gross income. But the IRS just added another expense that could help filers get other that threshold: home COVID-19 tests. (Sept. 16, 2021)
The 2021 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 tax season.
These three Coronavirus (COVID-19) and Taxes pages have details:
March-July 2020,
August-December 2020, and
January-… 2021

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 Season 2021 continues!
Tax Day 2021 is finally over … unless you're one of the millions who got an extension to file your 2020 tax year return. That's fine. In fact, the Internal Revenue Service appreciates some of us spreading out our filings, especially in a year like this where it's dealing with so many other COVID-19 related tax tasks. But enough about Uncle Sam's tax collector. The focus now is on you and your still-to-be-completed 2020 return. Let's get started! Your new Oct. 15 tax filing deadline will be here before you know it.

The monthly tips and reminders a little further down this column can help you finish up your returnon time. Once that's done, then look for tips each month that offer advice on ways to cut your still adding up 2021 tax bill.

Also keep an eye on the countdown clock below. It will help you track yet more days tick, tick, ticking off toward that absolutely final fall filing due date.
Note: I'm in the Central Time Zone, so adjust accordingly for where you live.

Time for Tax Tasks

Fall is on its way!

via GIPHY
Hello, September!

We've been waiting for your cooler, crisp days. In some parts of the country, leaves soon will turn their annual bright colors. That seasonal process is a reminder that we can't fall down on tax tasks. So let's get to making some tax-smart moves this month.

Sept. 1: In many parts of the county, school is back in session. Some classrooms are welcoming students and teachers back after a COVID-19 break. Others are going hybrid, with at least some remote classes as a continued coronavirus caution. Regardless of the method, school still means expenses. Students and/or their parents need to do some tax homework to learn how Uncle Sam can help pay some educational expenses at elementary, secondary, and college levels.

Sept. 6: Happy Labor Day! This celebration of workers' contributions is a federal holiday and day off for many.

via GIPHY

The COVID-19 pandemic has reshaped today's workplaces and workforces. Many lost their jobs, but at least are getting refunds for overpaying tax on unemployment benefits. Others are still working from home, even though since they're employees their makeshift home offices don't qualify for a tax deduction.

In other cases, the COVID-19 pandemic prompted folks to embrace their entrepreneurial spirits. Being your own boss is rewarding, but as an independent contractor, your gig job (or jobs if you got multiple side hustles to make ends meet) mean additional federal tax responsibilities.

Sept. 10: Until the Delta variant showed up, many had resumed Before Days events, like eating at favorite restaurants. Some eateries are still offering table service. If you're comfortable going to them, be sure to share your happiness about being served in person again with your waiters. If you're still a bit hesitant about going to a packed diner, also tip the food delivery folks still bringing meals to your door.

If a tip isn't included in your restaurant check or food delivery charge, click the image above to calculate how much to tip.

Those of you getting the tips, remember that your tips are taxable income. If you got such added financial thanks that came to a total of at least $20 last month, whether as a waiter/waitress or hair stylist or valet or whatever job where gratuities are common, you need to account for them today. Report them to your employer on Form 4070.

Sept. 12: Happy Grandparents' Day!
If you're an older grandma or grandpa, pay attention to your overall earnings. Your added retirement income could result in some of your Social Security benefits being taxed.

And if you're helping out an older relative (or anyone, related or not), that person might qualify as a dependent and help you claim the $500 tax credit for qualifying dependents.

Sept. 15: Today is the deadline for most of us to pay our third estimated tax payment of the 2021 tax year. Pay electronically by midnight or get your snail mailed 1040-ES voucher to a U.S. Post Office branch so it can be postmarked today to avoid possible penalties and interest.

Sept. 18: Still haven't filed your 2020 tax return? I hope you at least got an extension, which gives you until Oct. 15 to complete your Form 1040. But you don't have to wait that long. The Internal Revenue Service will gladly take your tax return any time before then, like today. And if you qualify, you still can save some money by using Free File, the online no-cost tax preparation and e-filing partnership between the IRS and Free File Alliance.

The official Free File site at IRS.gov this season offers nine participating tax software options if your adjusted gross income is $72,000 or less, regardless of filing status. If you make too much to use the online software, look into using Free File's fillable forms. Both the online Free File and fillable forms are available through October's extension date … if you want to keep procrastinating.

Sept. 22: Fall officially arrives today with the autumnal equinox at 3:20 p.m. Eastern Daylight Time. Adjust for your time zone, since the equinox occurs at the same moment worldwide. It's a good time to think about home maintenance that will help you weather the coming colder weather. While making those necessary repairs, also consider home improvements that could increase your home's basis and guarantee you won't owe any capital gains tax on your eventual residential sale profit.

Sept. 30: It's the last day of September, but the Atlantic/Gulf of Mexico hurricane season continues well into autumn. The annual hurricane season doesn't officially end until Nov. 30. The countdown clock below lets you know how many more days you have to worry about tracking tropical systems.

As September began, Louisiana and other southern states were dealing with the damage from Hurricane Ida. Being prepared for a hurricane — or any natural disaster — can make recovery efforts easier.

The ol' blog's special Storm Warnings section can help. The 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 on itemized tax deduction.

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 Publication 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 Tax Forms Fiesta! page.

What are you looking for?

Looking for something in particular? Start with the Table of Contents.
Or check out the Archives, where you can review posts by month and category. Or enter specific keywords in the box below to search
Don't Mess With Taxes.

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0, 1, 2, 3, 4, 5, 6, 7, 8, 9 ...

Taxes are all about the numbers.
Check out these (mostly) weekly
By the Numbers figures.

Kudos Et Cetera

National Association
for Women in Communications
Winner, Best Personal Blog
2012, 2014 & 2017
Plutus Financial Bloggers Awards
Celebrating the Best
in Personal Finance
Winner, Best Tax Blog
2011 and 2013
Lifetime Achievement Nominee 2020

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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September 2021

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, use the federal legislator locator above to find just who on Capitol Hill should hear your concerns. And for matters tax or otherwise closer to home, you can find info on your state and local elected officials at USA Gov.

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