Two Good Reasons for Filing Your Taxes Early

It’s tax time! This year personal tax returns are due on April 18, 2017. In January and February, you will start to receive tax documentation needed to prepare your tax returns. At this point, you may be saying to yourself, “I have plenty of time between now and April 18th to get my taxes done.” While this is true, consider the following two good reasons for completing and filing your taxes early.

Reason #1 – Tax professionals are less busy

If you hire a tax professional to prepare your taxes, tax professionals are significantly less busy at the beginning of the tax season compared to the end of the tax season.

The peak of the tax season will be between March 15th and April 18th. During this time, tax professionals will work long hours to get all tax returns completed by the due date. It’s a crazy time. However, at the beginning of the tax season, tax professionals will start to get busy but not nearly as busy. Your tax preparer will have more time available to meet your needs compared to later in the tax season.

Reason #2 – Identity theft and fraudulent tax returns

This reason is a more important reason to file your taxes early. Consider this situation.

– Your name, birth date and social security number are, unknowingly, stolen
– The scammer electronically files a fraudulent tax return showing a large refund
– The IRS processes the tax return and deposits the refund into the scammer’s financial institution
– Your taxes are prepared and you file your tax return electronically
– The IRS rejects your tax return because the IRS says you already filed a tax return

What can you do now? There are procedures to notify the IRS of the identity theft. This includes paper filing your tax return with Form 14039, Identity Theft Affidavit. Click here more information. It will take the IRS approximately 6 to 8 months to clear up the situation and process your tax return. This includes waiting for a long time to get your tax refund.

However, if you filed your tax return early, then your tax return will be filed first. The fraudulent tax return filed by the scammer will be filed after yours and, therefore, will be rejected by the IRS.

The risk of identity theft has increased over the years. Over past two tax seasons, we’ve had at least one client fall victim to identity theft. Both of these clients provided us their tax information in April and their tax returns were filed right around April 15th. Their tax returns were rejected because a fraudulent tax was already filed.

Related Identity Theft Stories

The IRS was hacked several times over the past two years.
IRS Hacked Again and Tax Scams Continue

Then there was the major hack at Michigan State University where student data was stolen, this includes current students and Michigan State alumni.
Michigan State University Hacked, Student Data Stolen

FREE Homeowner Tax Class – February 18, 2017 at 10am

On February 18, 2017, there is a FREE 1 hour tax class for homeowners.  The class starts at 10am and will be held at Team Hinton Real Estate Group in Downtown Ypsilanti, MI.  ALG will be presenting.

The following are topic ALG will cover.

  • Preparing your own tax return or hiring a tax preparer
  • Tips on hiring a tax preparer
  • Standard deduction versus itemized deductions
  • Most common itemized deductions
  • Other deductions (Above the line deductions)
  • Identity theft and IRS tax scams issues (What are they and what can you do)

Sign up for the class here.

Topic:  Tax Class for Homeowners
Date:  February 18, 2017
Time:  10:00 am to 11:00 am
Place:   Team Hinton Real Estate Group, 36 N. Washington, Ypsilanti, MI

 

Important 2017 IRS Due Dates

New for 2017 are some changes to the due dates for various tax returns.  For example, partnership tax returns are due on March 15 instead of April 15.  Also, a couple of the due dates fall on a holiday and/or weekend.  When this happens, the due date is the next business day.

January 23, 2017

Tax season starts.  The IRS will start accepting and processing tax returns on this date.

January 31, 2017

– Form W-2, Wage and Tax Statement; and

– Form 1099-MISC, Miscellaneous Income.

The due dates for Form W-2 and Form 1099-Misc includes filing necessary forms to the recipient, IRS and Social Security Administration.  The requirements for filing these two forms were slightly different in previous years.

February 15, 2017

Tax refunds due to Earn Income Tax Credit or Additional Child Tax Credit will be held until this date.  A new law was put in place requiring the IRS to hold the refunds.

March 15, 2017

– Form 1065, U.S. Return of Partnership Income; and

– Form 1120S, U.S. Income Tax Return for S Corporation Return.

In previous years, partnership returns were due on April 15.

April 18, 2017

April 15 falls on a weekend in 2017 and Monday April 17 is Emancipation Day.  Therefore, tax returns are due on Tuesday, April 18, 2017.

– Form 1040, U.S. Individual Income Tax Return;

– Form 1041, U.S. Income Tax Return for Estates and Trusts;

– Form 1120, U.S. Corporation Income Tax Return;

– Form 1040-ES, Q1 Estimated Tax for Individuals; and

– Form 1120-W, Q1 Estimated Tax for Corporations.

New this year, Form 1120 Corporation returns are due in April instead of March.

June 15, 2017

– Form 1040-ES, Q2 Estimated Tax for Individuals; and

– Form 1120-W, Q2 Estimated Tax for Corporations.

September 15, 2017

– Extended Form 1040, U.S. Individual Income Tax Return;

– Extended Form 1041, U.S. Income Tax Return for Estates and Trusts;

– Extended Form 1120, U.S. Corporation Income Tax Return;

– Form 1040-ES, Q3 Estimated Tax for Individuals; and

– Form 1120-W, Q3 Estimated Tax for Corporations.

October 2, 2017

– Extended Form 1041, U.S. Income Tax Return for Estates and Trusts

December 15, 2017

– Form 1120-W, Q4 Estimated Tax for Corporations

January 15, 2018

– Form 1040-ES, Q4 Estimated Tax for Individuals

Fake IRS Tax Bill Scam

The IRS issued a warning about fake IRS tax bills being mailed to taxpayers.  Scammers have created a fake version of a real notice used by the IRS, Notice CP2000.  We suggest using our IRS Letter Decoder to check the authenticity of the letter you may have received before responding.  Continue reading…

Free eBook on First Time Penalty Waiver

You made a mistake by either filing your tax return late or paying taxes late. As a result, the IRS charged you penalties. The penalties charged by the IRS can be significant. If this was your first time making this mistake, you may qualify for First Time Penalty Waiver. Continue reading…

Dealing with an IRS Tax Lien and FREE eBook

The IRS has the right to protect the government’s interest in all your property, including real estate, personal property and financial assets by filing a tax lien.  Owing taxes is bad enough.  But once the IRS files a tax lien, your IRS tax situation may get worse.  We review important aspects of IRS tax liens.  Continue reading…