Don't Mess With Taxes

MoneyBlogNewz via Flickr CC

It's official. The Internal Revenue Service will start accepting, and more importantly for folks expecting refunds, processing 2019 tax year individual returns on Monday, Jan. 27.

Way to give me some breathing room (NOT!), IRS, after my post earlier today about the opening of business tax filing tomorrow, Jan. 7.

OK, only kidding (sort of) about the back-to-back business and individual filing season blog items.

It's always good news for all when the IRS announces filing season starting dates.

Almost ready to go: The annual announcement of the individual tax return filing season means the tax agency is ready, or soon will be, to handle the returns from more than 150 million individual taxpayers that will be flowing this year through its offices.

It also means that its staff is preparing to help us complete our filings, either by answering our phone calls or providing automated and online assistance.

"As we enter the filing season, taxpayers should know that the dedicated workforce of the IRS stands ready to help," said IRS Commissioner Charles Rettig in statement announcing the 2020 individual taxpayer filing season.

"We encourage taxpayers to plan ahead and use the tools and information available on IRS.gov," Rettig added. "The IRS and the nation's tax community are committed to making this another smooth filing season."

Computers readied, too: In addition to the human IRS component, there's the computer side of filing.

The IRS must each year update its systems to comply with things like annual inflation adjustments that affect our returns. For this coming filing season purposes, that's the 2019 amounts shown in the ol' blog's latest tax-related inflation series.

And once again, the IRS also has to make system changes to deal with Congress' year-end tax law changes.

This time it's to accommodate the expired tax provisions known as extenders. Several popular ones weren't officially resurrected for the 2019 (and 2020) tax year until Dec. 22, 2019.

Eager filers already ready: All those IRS technical filing seasons concerns don't matter to many filers.

They are folks who are already ready to file. Now. Because they are expecting tax refunds.

Yes, that still happens. Many like to overwithhold, even under the Tax Cuts and Jobs Act (TCJA) changes that lowered taxes for most.

Their thinking is that by using the Bank of Uncle Sam to hold their money for the full year, they won't be tempted to spend extra income they could get in their regular paychecks by filing a new W-4.

Forms, February delays still pose hurdles: Remember, though, that you must have the proper documentation.

For most early tax return filers, that is a W-2 form. It's a requirement, whether you file by paper or electronically.

Remember, too, that even if you file on Jan. 27, if you claim the Child Tax Credit or Earned Income Tax Credit (EITC), you won't get your refund until mid-February, or more likely, later that month.

The IRS must, by law, hold on to refunds until Feb. 15 when these two tax credits show up on 1040s.

April 15 for the rest of us: Then there are those of us who never are ready to send in our tax returns ASAP each year.

We either don't have all the necessary tax data and documentation to do so. Or, alas, we know we owe the U.S. Treasury.

That's OK. We have until Wednesday, April 15, to get our returns or an extension to file to the IRS. 

File electronically, yourself or with preparer help: Whenever you do get around to doing your taxes, the IRS recommends you do so electronically.

Using tax software generally means your tax returns are more accurate. Plus, the e-file option once you finish filling out your computer return means you'll get any refund more quickly.

That refund is even speedier when you also opt for direct deposit.

"The IRS encourages everyone to consider filing electronically and choosing direct deposit," Rettig said. "It's fast, accurate and the best way to get your refund as quickly as possible."

These electronic tax options also apply when you a tax professional. Most paid tax preparers use tax software and e-file returns for their clients.

Wait for Free File: If your taxes are simple and you're confident you can do them yourself, consider waiting for the opening of Free File.

That no-cost online tax return preparation and electronic filing option is not yet open. But it should be soon and definitely by the Jan. 27 filing season opening day. Keep checking IRS.gov or, of course, here for updates on when you can use Free File.

Even better, this filing season more taxpayers will be eligible. Free File can be used by individuals, regardless of filing status, whose adjusted gross income is $69,000 or less.

Plus, a new agreement between the IRS and the tax software industry should mean that more eligible Free Filers will be directed to the no-cost option this filing season.

So mark your calendar for Jan. 27 and get ready. The 2020 tax filing party is about to get started!

You also might find these items of interest:

• 5 tax tips for Free File users
• Where to find your perfect tax preparer
• 9 ways the IRS reform bill will help taxpayers

Advertisements