It might sound crazy at first, but some taxpayers really look forward to the beginning of tax season. But in most cases, it's not because they particularly like the tax filing process. Rather, when you have a big refund check coming, the sooner you get your return done, the sooner you'll see that hard-earned money from the government.
The IRS just announced that it'd start accepting and processing 2019 tax year returns on Monday, Jan. 27, 2020. This will mark the third year in a row that the tax service is making taxpayers wait until the last week of January. That comes as somewhat of a surprise, as this year the IRS doesn't have the excuse of major tax reform or the threat of a government shutdown to justify the delay. Nevertheless, even if you can't file until Jan. 27, you can still get ready to pull the trigger when the opportunity presents itself.
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Why are we late again?
In the past, the IRS usually managed to get tax season started about three weeks into the new year. Occasionally, it'd take some extra time to get going, especially if there were major changes to tax laws that took effect late in the preceding year. The best example of that was late 2017's tax reform package, which required a quick look to see which provisions might take effect for the just-completed tax year.
However, there aren't any particularly good excuses for the extra wait this year. One thing to keep in mind, though, is that it's often hard to file returns long before the end of January anyway. That's because employers generally have until then to get key tax forms to you, such as your W-2, and many 1099 statements on investment accounts you have will arrive then as well. Without those forms, you typically won't have the numbers you need to even prepare your return, let alone file it.
Here's what to do
If you want to get moving on your taxes so you're ready to file as soon after Jan. 27 as possible, keep these things in mind:
- Get started with a tax preparer or software package now. Even if you can't file until Jan. 27, you can still do all the advance work necessary to be ready to file then. You can already buy 2019 tax software, and professional accountants and tax preparers are accepting customers right now. In fact, getting a head start makes their lives easier, too, as things will only get busier as tax season progresses. By getting help now, you can set things in motion so that you'll be able to just click a button on Jan. 27 and get your return moving.
- Consider electronic filing. The IRS always encourages taxpayers to file their returns electronically, because e-filing automatically checks for math errors and other common mistakes. That simplifies processing for the IRS and avoids it having to send back bad returns to taxpayers, helping you as well. Moreover, those who buy tax software or hire tax professionals will typically get e-filing included in the cost.
- Know when certain tax credits will force you to wait on a refund. Two of the biggest tax credits available are the earned income tax credit and the additional child tax credit. But concerns about fraud and identity theft led lawmakers to create rules delaying the payout of refunds on returns claiming those credits until Feb. 15. You can still file in late January -- just be ready to wait on your refund check.
- Pick your ideal time to file. Don't let the start of tax season pressure you into filing before you're ready. Many taxpayers don't get all the forms they need until mid-February or later, and filing early just runs the risk of using incorrect numbers and having to amend your return.
Ready, set...
A tax refund can be a powerful incentive to get your tax return filed as quickly as possible. With the start of tax season just days away, doing what you can right now to prepare will help you get a nice jump out of the starting gate when the time comes.
