Haven’t filed your taxes yet? Here’s what to know

Jill on Money

Tax season opened on Jan. 29, and the IRS expects more than 155 million returns to be filed this year. More than 70 percent of filers should receive a refund. Once again, due to a District of Columbia holiday (Emancipation Day), the filing deadline is delayed. Procrastinators, mark April 17, rather than April 15, as your drop-dead date.

Although the IRS began accepting electronic and paper tax returns in late January, paper filers won’t see refunds as quickly. The agency began processing their returns in mid-February. Choosing e-file and direct deposit for refunds remains the fastest and safest way to file.

The IRS expects more than four out of five returns will be prepared electronically using tax software and expects to issue more than nine out of 10 refunds in less than 21 days.

Now, on to completing your return. Here’s what you need to know about this filing season: While many of the recently enacted changes to the tax code go into effect next tax season, one big thing changes this year. If you itemize deductions on Form 1040, Schedule A, the new law allows you to deduct qualified medical and dental expenses that exceed 7.5 percent of your adjusted gross income. That’s a lower threshold than the previous one of 10 percent. (The level returns to 10 percent beginning Jan. 1, 2019.)

Medical care expenses are a big category, and you should check out the IRS list of what qualifies, such as fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists and nontraditional medical practitioners, as well as insurance premiums you paid for policies that cover medical care or for a qualified long-term care insurance policy.

Although the GOP tax law repealed the individual mandate to carry health insurance, that does not go into effect until 2019. So you still need to provide proof of coverage or pay the penalty, which is the higher of 2.5 percent of your AGI, or $695 per adult and $347.50 per child, up to a family maximum of $2,085. What about next year? This is where the process gets tricky. The IRS has created new withholding tables (IRS Notice 1036), but the amounts cited may not be enough to cover a lot of taxpayers’ liability, especially those in high-tax states who could lose certain deductions. To be safe, at least for the first year the new law is in effect, you may want to assume that your tax liability will be at least the same as this year’s. To avoid a penalty, you can pay 100 percent of your income tax liability from 2017 or 110 percent if you earn more than $150,000.

To get a better sense of your situation, be sure to check out the revised IRS withholding tax calculator on IRS.gov, which should be available by the end of February.

Here are some resources for filers, courtesy of the IRS:

IRS Free File: Prep and filing software for individuals and families with incomes of $66,000 or less.

Volunteer Income Tax Assistance and Tax Counseling for the Elderly: Free tax help to people who generally make $54,000 or less, persons with disabilities and limited English-speaking taxpayers who need assistance.

Where’s My Refund? tool on IRS.gov and the IRS2Go phone app.

Directory of Federal Tax Return Preparers: A database of return preparers with credentials and select qualifications.

Jill Schlesinger, CFP, is a CBS News Business Analyst. She welcomes comments and questions at askjill@jillonmoney.com.