You are now able to file tax returns since the IRS opened the 2018 income tax return filing season on January 28. This is a great year to file earlier if you typically wait until close to April 15 to file. There are a several reasons to file early. You can potentially protect yourself from tax identity theft, receive tax refunds earlier if you are due refunds, and know of any tax liability before April 15.
What is tax identity theft and why should I be concerned?
Tax identity theft occurs when someone else uses your personal information and files a fraudulent tax return on your behalf early in the tax filing season. You discover the fraud when you attempt to file your tax return. You would be informed by the IRS that the return has been rejected because an income tax return with your social security number has already been filed for the same tax year. If this happens, you can still prove that your return is the legitimate one, but tax identity theft can cause significant delays to refunds. Filing early is one great defense along with safeguarding your personal financial information and social security number. If you file first, your tax return will not be rejected. The fraudulent tax return filing would get rejected.
How fast will refunds be issued?
Yes, the best benefit is you will receive your tax refund earlier. The IRS expects over 90% of refunds will be issued within three weeks. Setting your tax refund up for direct deposit will result in getting a refund quicker than getting a refund check through the mail.
Could I have a balance due if I have always received refund in the past?
Even if you owe tax, filing early can be beneficial. You still won’t need to pay your tax bill until April 15, but you’ll know sooner how much you owe and can plan accordingly. With significant tax changes from the Tax Cuts and Jobs Act and changes in payroll withholding tables in early 2018, your tax return results could look significantly different than in prior years. It is better to know sooner rather than later if there is tax due. This also allows more time to calculate estimated tax payments for 2019.
What if you haven’t received your W-2s and 1099s?
To file your tax return, you must have received all of your tax documents. The deadline for employers to issue W-2’s and for businesses to issue Form 1099 to recipients was January 31. However, in Wisconsin the deadline got moved to February 4 because of inclement weather conditions. If you haven’t received a W-2 or 1099, it is best to check with your employer or the entity that should have issued the form.
What should I do if I need help with filing?
If you have questions about tax identity theft or would like help filing your 2018 return early, please contact us. The new Form 1040 has added several schedules that were not on prior forms. Pass-through business owners have a number of new calculations that need to be completed at the individual level, so the earlier information is submitted the earlier the new calculations can be completed to provide the best tax benefits. We can help you ensure you file an accurate return that takes advantage of all of the benefits available to you.
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