2015 Tax Filing Season to Begin on Jan. 20th

2015 Tax Filing Season to Begin on Jan. 20th

By / State News / الأربعاء, 21 كانون2/يناير 2015 05:00

RALEIGH : N.C. : January 15th, 2015 - The North Carolina Department of Revenue (NCDOR) will officially open the 2015 tax filing season on Jan. 20. In accordance with scheduling outlined by the Internal Revenue Service (IRS), NCDOR will begin processing individual income tax returns on this date. Taxpayers or preparers who submit a filing prior to the season's opening should remain mindful that the IRS will not transmit any returns to NCDOR prior to this date. Additionally, individuals should use the Jan. 20 opening date as the baseline when calculating tax refund expectations.
Under the Tax Simplification and Reduction Act, many changes to the tax code went into effect during the 2014 tax year. In addition to lowering the tax rate and increasing the amount of the standard deduction, the legislation also adjusted the number of itemized deductions available to taxpayers. Whether using a preparer or submitting a return individually, taxpayers should be mindful of the affect these changes may have on their tax return.
Taxpayers are encouraged to file and pay electronically (eFile). The eFile method can help expedite the state tax refund process and is faster, easier, and more accurate than traditional filing and paying methods. An eFile for Free option is available for those who qualify. In preparation for the upcoming filing season, NCDOR has extended hours for phone assistance. Taxpayers with questions can contact the department from 8 a.m. to 6 p.m. EST, Monday through Friday at 1-877-252-3052 to receive guidance from customer service specialists.
For more information concerning the tax filing process, including copies of all forms and information on tax law changes, please visit www.dornc.com

IMPACT OF THE FEDERAL TAX INCREASE PREVENTION ACT OF 2014 ON NORTH CAROLINA’S CORPORATE AND INDIVDUAL INCOME TAX RETURNS

North Carolina’s corporate income tax law uses federal taxable income as the starting point in determining North Carolina taxable income. North Carolina’s individual income tax law uses federal adjusted gross income as the starting point in determining North Carolina taxable income.
In both cases, the reference to federal law is to the Internal Revenue Code (“Code”) as of a certain date. Currently, that reference is to the Code as of December 31, 2013. Each year the General Assembly determines whether to update its reference to the Code. Doing so would make recent amendments to the Code applicable for North Carolina income tax purposes. In some cases, the General Assembly chooses not to follow (“decouple” from) certain amendments to federal law.
On December 19, 2014, President Obama signed into law the Tax Increase Prevention Act of 2014 (“TIPA”). The Act extended several provisions in federal law that had sunset at the end of 2013. If the General Assembly does not update the reference to the Code to December 19, 2014 or later, the extension of those provisions will not apply for North Carolina income tax purposes.
The Revenue Laws Study Committee is charged with studying North Carolina’s revenue laws and making recommendations with respect to those laws to the General Assembly.
On January 13, 2015, the Revenue Laws Study Committee adopted a recommendation to update the reference to the Code to January 1, 2015 but to decouple from specific provisions in TIPA.
If the General Assembly enacts legislation to update the Code reference as recommended, North Carolina will require additions on the corporate and individual income tax returns for (a) 85% of the amount deducted as bonus depreciation on the federal return and (b) 85% of the difference between the amount deducted on the federal return for Code section 179 expenses, using the federal dollar and federal investment limitations, and the amount that would be deductible for Code section 179 expenses using the North Carolina dollar and North Carolina investment limitations set out for 2014.
For individual income tax returns, additions would also be required for (a) the amount excluded from gross income for the discharge of qualified principal residence indebtedness, (b) the amount deducted in arriving at adjusted gross income for qualified tuition and related expenses, and (c) the amount excluded from gross income for a qualified charitable distribution from an individual retirement plan by a person who has attained age 70 ½. In addition, an individual would also be required to exclude amounts paid for mortgage insurance premiums from the deduction for qualified residence interest if the taxpayer claims itemized deductions on the North Carolina return.
Any person filing a North Carolina income tax return whose 2014 federal taxable income or federal adjusted gross income is impacted by the amendments to federal law included in TIPA should consider waiting to file the 2014 North Carolina income tax return until the General Assembly takes action.
A taxpayer who files the 2014 income tax return before the General Assembly takes action may have to amend the return to reflect the General Assembly’s action.
The General Assembly is scheduled to convene on January 28, 2015. If the General Assembly enacts legislation to update the Code reference, the Department will provide additional guidance, including how to report any required additions on the 2014 returns.

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