The IRS will begin accepting e-filed individual income tax returns on January 14th. Many people are anxious to file their returns, especially if they have big refunds coming to them. But I’d like to issue a caution to those eager filers: don’t rush. Here’s some common sense tips to help you hold out just a little.
1. Do not try to file your tax return until you have all of your necessary paperwork–that means your W2s and 1099s. It’s against the law for a professional preparer to file a return just using your check stub. (Some companies will do a “loan” against your tax refund, that’s different, but you’ll pay a hefty fee for that.)
2. If you file your return without reporting all of your income, you will receive a letter from the IRS later. It won’t be friendly either. The headache of correcting a mistake like that is much worse than waiting a few weeks to have everything together and doing it right the first time.
3. Your employer is required by law to send out your W2’s by January 31st. You should have everything in your hands by February 5th.
4. Even if you have all of your paperwork, some returns won’t be able to be filed until mid to late February because of delays. When Congress changed the tax laws in December, it messed up the IRS’ ability to process some people’s returns. If you itemize your deductions on a Schedule A frm, if you claim the teacher deduction, or if you claim the tuition and fees deduction; then you can’t file your return yet anyway. (Other education credits weren’t affected.)
5. If you’re doing direct deposit, there is no difference between whether you file on January 14th or filing on January 19th as far as how fast you get your refund. It’s all related to the IRS cut off dates for issuing checks and direct deposits. No difference. It might make sense to hold off a day or two to make sure you’ve got everything you need.
For you FAFSA filers. You want you tax return done as soon as possible so that you can include the information on your FAFSA application. If you’re one of the many people whose return will be delayed because of itemizing, it’s okay to go ahead an prepare your return now and use the tax return information in your FAFSA and then file the actual return later once the IRS starts accepting them.