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IRS to Taxpayers: New Factors Could Change Your Withholding
Due to a tax law requiring the Internal Revenue Service hold on to returns claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC), the agency this week recommended taxpayers perform a “mid-year checkup” for their tax withholding. As part of this checkup, the IRS suggested taxpayers make adjustments to their Form W-4, Employee’s Withholding Allowance Certificate. Doing so throughout the year can help them avoid a large tax bill next April. The delay comes as a result of the Protecting Americans from Tax Hikes (PATH) Act, which requires the IRS hold refunds for returns claiming the EITC or ACTC until mid-February to “[give] the agency more time to help detect and prevent fraud.” These precautionary measures may not come as a surprise to some, given the increase in tax-related identity theft scams and attacks that have been perpetrated over the past few years. If any of your clients are early filers, they should not to expect early refunds since the IRS cannot issue them before February 15. To read more, click here.