3 Reasons to File Your 2018 Tax Return Early

The IRS opened on January 28, meaning its officially tax return filing season. Even if you typically wait to file closer to the April 15th deadline, this year consider filing as soon as you can. Why? There are several benefits to filing early, besides gaining the satisfaction of striking it off your to-do list.

‍1. Avoid Tax Identity Theft In a tax identity theft scheme, a thief uses your personal information to file a fraudulent tax return early in the filing season and claim a bogus refund. Unfortunately, you won’t know that this has happened until you file your return and the IRS informs you that you Social Security number has already filed for the same tax year. Why is filing early your best defense against tax identity theft? If you file first, it will be the tax return filed by a would-be thief that will be rejected — not yours. While you should ultimately be able to prove that your return is the legitimate one, tax identity theft can cause major headaches to straighten out and significantly delay your refund.

‍2. Get Your Refund Earlier Besides protecting yourself from tax identity theft, the most obvious benefit of filing early is that, if you’re getting a refund, you’ll get that refund sooner. The IRS expects more than nine out of ten refunds to be issued in less than 3 weeks. If you want to receive your refund even earlier, make sure that you opt for direct deposit.

‍3. More Time to Plan if You Owe Keep in mind that some taxpayers who typically have gotten refunds in the past could find themselves owing tax when they file their 2018 return due to tax law changes under the Tax Cuts and Jobs Act (TCJA) and reduced withholding from 2018 paychecks. 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.

‍What if you haven’t received your W-2s and 1099s? To file your tax return, you must have received all of your W-2s and 1099s. Employers were required to issue 2018 Form W-2 on January 31 to their employees and, generally, for businesses to issue Form 1099 to recipients of any 2018 interest, dividend or reportable miscellaneous income payments. If you haven’t received a W-2 or 1099, first contact the entity that should have issued it. If that doesn’t work, you can contact the IRS for help.

‍Need help? If you have questions about tax identity theft or would like help filing your 2018 return early, please contact your local HHM CPA. While the new Form 1040 essentially does fit on a postcard, many taxpayers will also have to complete multiple schedules along with the form. And the TCJA has changed many tax breaks. We can help you ensure you file an accurate return that takes advantage of all of the breaks available to you.