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In This Issue:


    January 12, 2016

    What’s new for Ohio’s 2015 tax season

    Ohio Department of TaxationBy Joe Testa, Ohio Tax Commissioner

    For business owners, investors and all residents of our great state, the 2015 tax filing season in Ohio will be unlike any other. The changes you’ll see this year are significant and numerous. They include new tax cuts for most individuals and small business income taxpayers, and major modifications to our primary income tax forms, which we believe will simplify the tax filing process. I would like to share some highlights with you that I hope will be helpful when filing your 2015 Ohio income tax return. 

    TAX CUTS 
    For individuals, the 2015 tax rates reflect a 6.3% income tax cut from the 2014 Tax Year. This reduction drops Ohio’s top rate to just below 5%, the lowest level it has been in more than 30 years. In addition, many business owners and investors will not only benefit from that reduction but also enjoy a maximum tax rate of 3% on business income exceeding $41,700. This, along with the business income deduction (previously named the small business deduction) which allows taxpayers to again deduct 75% of the first $250,000 of net pass-through business income, will free up additional funds to further strengthen Ohio and Ohio businesses.

    TAX FORMS
    The Department is continuously looking for ways to simplify the income tax filing process. This year, several tax forms have been revamped to make the process easier and more efficient. Most prominently, the IT 1040, IT 1040 EZ and amended IT 1040X forms have been consolidated into one Universal IT 1040 tax return. Combining these forms will allow amended returns to be filed electronically, rather than on a paper form as required previously. It will also enable refunds from amended returns to now be direct deposited, rather than issuing a paper check as was done in the past. This will speed up processing and the delivery of refunds. Taxpayers will also benefit by seeing all of the tax credits in one place (see “Schedule of Credits” below), making it easier to identify those credits for which they are eligible. Similarly, the SD 100 and amended SD 100X school district forms have been merged into the Universal SD 100 tax return. The Universal forms and new schedules should be used for Tax Year 2015 and thereafter. However, the relevant old forms should still be used for Tax Years 2014 and earlier.  

    SCHEDULE OF CREDITS AND OTHER SCHEDULE CHANGES 
    As mentioned, all nonrefundable and refundable credits have been combined into the new Ohio Schedule of Credits. The Schedule of Credits includes line items that were previously individual line items on the IT 1040, such as the joint filing credit and personal/dependent credit. Additionally, it has all lines/credits previously reported on Schedules B, C, D and E, so these forms are not available for 2015 personal income tax filing. The Schedule E is still available for pass-through entity filings. Please also be aware that beginning with the 2015 tax return, space has been added to Schedule J to capture the dependent “relationship” for each dependent being claimed on an Ohio income tax return, so as to help deter fraud with these exemptions.

    TAX FRAUD 
    Last year, the Department intercepted a record number of fraudulent returns and we expect no let-up in this illegal activity. More than $533 million in fraudulent income tax refund claims have been stopped since 2014. We are committed to combatting tax fraud and ensuring that tax refunds are paid only to legitimate filers. We believe we’re among the leaders in the country in aggressively combatting these fraud schemes. Last year, the Identity Confirmation Quiz was instrumental in that fight and we will be utilizing it again this year. After listening to taxpayer feedback, we did make a few modifications to some of the types of questions asked and we’re confident that those will improve the process and provide a better experience for taxpayers who take the quiz. Plus, with further improvements to our tax return analysis this year, we expect significantly fewer taxpayers will be asked to take the quiz.

    MORE INFORMATION SHARING = MORE SECURITY
    Behind the scenes this year, there have been some important agreements that will result in considerably more information sharing between the IRS, state tax departments, and public and private sector tax groups. The goal is to help us all quickly identify and adjust to new and emerging tax-related fraud schemes. Unfortunate but unavoidable, safeguarding taxpayer dollars from tax fraud theft can slow the processing of returns and issuing of refunds. We truly appreciate the understanding and patience shown by Ohio taxpayers.

    TECHNOLOGY TOOLS 
    We continue to utilize technology to help improve customer service. We’re on Twitter now, so I welcome you follow us @OhioTaxation for all the latest news. We’ve also expanded our presence on YouTube with a number of instructional videos. If you’d like to check on your refund or sales tax rates around the state, download the Ohio Tax App through Apple or Google Play. Finally, visit our website – tax.ohio.gov -- if you’d like additional information on the topics covered in this article, or to sign up for our Tax Alerts and get Ohio tax news year-round.

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