Why you should file your taxes as soon as possible
The IRS begins accepting tax returns Monday, and with big changes coming to the U.S. tax code for the first time in 30 years, many people are wondering how their taxes will change.
President Donald Trump signed the tax bill into law last December, adding new tax brackets and modifying tax deductions. The changes went into effect Jan. 1.
But there’s no need to scramble to understand the new law. Your tax return this year will reflect your 2017 taxes, meaning the new law won’t apply.
Here’s what you can expect:
You should receive all your tax documents by early February. If you already have those documents, you can begin filing today.
File as soon as you can. The IRS suggests filing as soon as you receive your W-2’s. Not only does this mean you can get your refund earlier, but it helps you avoid identity thieves who are counting on the last-minute rush.
The IRS says the fastest way to get your tax refund is by filing electronically. It’s the method already used most by taxpayers. The IRS also suggests selecting direct deposit, a method they call “simple, safe, and secure.” Dune Beckett, CPA and owner of Beckett Tax in Madison agrees. “The sooner you get your tax returns filed, the better,” he said. “The first ones in, the first ones out. So that’s the motivation: to get your money back.”
The last day to file your taxes is April 17. April 15 falls on a Sunday and the following Monday is a holiday in Washington, D.C. It’s recommended you file as soon as possible to protect against tax fraud.
If you owe taxes, you can file now and pay later. You don’t have to pay when you file, meaning you can file at the start of tax season and schedule a payment for April 17 or any time before.
The IRS is stepping up security measures this year in light of October’s Equifax hack. “This year’s the first year that the IRS requires everyone in the country put their driver’s license or ID information with the tax return,” said Beckett. “That will help prevent the identity theft so many have been subject to in the past. It’ll be effective.” Equifax is offering free coverage to the 143 million Americans hacked last October. The deadline to apply for that help is Wednesday, Jan. 31.
You can expect your refund to hit your bank account within three weeks of filing online, assuming you opted to receive it via direct deposit. Oftentimes, you’ll get your money even faster. Last year, the IRS says the average American received a tax refund of $2,900.
Next year, with the new tax code in effect, you may owe less in taxes or see a bigger refund. But right now, tax preparers say it’s unclear what that means for the average American.
“The reality is everybody’s tax return is different and what we’ve seen in the 100 or so we’ve done is that some people will get more money back with their tax return next year if they have the same situation next year,” said Beckett. “Some will not. Some will have to pay in. It all depends on how many children you have and what your tax situation is.”
If you’re curious how your financed will be affected next year, ask. “It is important for people to be prepared and adjust their withholdings accordingly,” said Beckett. “Whenever you get your tax return done, ask the preparer if they can tell you what would the result be with the new tax laws coming, so you can adjust your withholdings accordingly.”
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