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

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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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Filing Season Tax Tips

Working around a missing W-2 — Still haven't gotten your W-2? Here are some steps to take to get the annual wage statement. And if those don't work, you can use the replacement document Form 4852 instead to file your tax return. (Feb. 20, 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

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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

Time to get hopping
on your 2019 taxes!

Click image for some fun
Leap Year/Leap Day facts.

OK, bad but easy pun (aren't they all?) about this being a Leap Year, but I couldn't resist. Joking aside, it's always good to have any extra time to work on your taxes. So let's, ahem, leap right into this February's 29 days of tax filing, planning and saving moves.
Feb. 1: If you haven't received all the tax statements you need to file your Form 1040, be patient. Issuers were supposed to have the tax docs at least on their way to you by Jan. 31, so they should show up in your email or snail mail box by next week.

Feb. 2: Happy Groundhog Day!

Don't get caught in a Bill Murray loop and end up doing your taxes over and over. Get your 2019 return right the first time. Once you get your tax docs, then review this filing checklist to make sure you have all you need to file.

Feb. 2 also is Super Bowl LIV day, which is fitting since pro football fans are happy to see this sporting event come around each year. So are gamblers. This is the biggest single betting day of the year and much of the money goes toward those goofy NFL championship prop bets. Just remember, if any of them pay off, then you owe tax on your winnings. Note, too, that even if your winnings are part of a fantasy sports bet, the associated taxes are very real.

Feb. 6: Finally! Your tax statements are here, 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. It's available for taxpayers with adjusted gross income of $69,000 or less.

There are 10 software companies participating this year at IRS.gov's Free File webpage. If you make too much to use the online software, look into using Free File's fillable forms.

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

Click image
to calculate how much to leave your server.

Feb. 12: Black History Month is celebrated every day this month, commemorating the achievements by black Americans and recognizing the role of African Americans in U.S. history.

This day is notable, however, because National Association for the Advancement of Colored People (NAACP), the nation's oldest and largest grassroots-based civil rights organization, was founded on Feb. 12, 1909. That was the centennial anniversary of the birth of Abraham Lincoln, who issued the Emancipation Proclamation twice.

One of the NAACP's key divisions is its Legal Defense and Educational Fund.
If you want to support the Fund's work, you can donate to it and, since it is a 501(c)(3) organization, you can claim it as a charitable tax deduction
if you itemize.

Feb. 14: Happy Valentine's Day!

Do you and your better half file a joint return? Most married couples do. Remember to look over the 1040 carefully before you sign it. When both spouses sign their jointly filed 1040, each is jointly and severally liable for the entire tax amount due. This means the Internal Revenue Service can come after either spouse for payment of a tax bill, even the husband or wife who is in more dire financial circumstances.

Feb. 17: Today is Presidents Day, officially honoring George Washington, the Father of Our Country. Over the years, however, this federal (three-day, yay!) holiday has come to commemorate the contributions of all our Commanders in Chief. And we've got to give a (another) special shout out to Abraham Lincoln, who essentially was father of our income tax system, signing into law a tax on earnings to help pay Civil War costs.

Feb. 24: You filed your 1040 back on Jan. 27, the first day that filing season 2020 opened. Now you want to know when you're getting your refund. Check the status of your return online using the IRS' online "Where's My Refund?" tool.

Feb. 29: Happy Leap Day!

Click image for some more about Leap Day.

This extra day of the tax season is a great opportunity to do a little tax planning. Regardless of whether you owed tax (or will when you file) or got (or are expecting) a refund, you might want to consider adjusting your withholding. The IRS' online Tax Withholding Estimator can help you get just the right amount. .

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 Tax Form Tuesday page.

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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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.
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