Why do you have to file your tax returns ASAP?
Americans aren’t messing around this tax season.
In just one week since the tax filing began on Feb. 12, the IRS received nearly 35 million individual tax returns as of Thursday, according to the agency.
The rush in returns far exceeds what the agency saw last year, even before the coronavirus pandemic broke out and resulted in an expanded login window. In the week ending January 31, 2020 – the first of the 2019 tax season – the IRS received 15.7 million returns, it said.
Even as of February 7, 2020, the end of the second week of the 2019 filing season, the IRS had received nearly 29 million individual tax returns, less than in just one week this year.
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There are several reasons Americans are currently in a rush to file files. First, the IRS has postponed filing to February 12 so that it has time to prepare after the second round of stimulus payments have been sent out.
Because the agency has not extended the April 15 filing deadline – and has stated that it has no plans to – people have less time to get their paperwork and any payments they owe the IRS.
Benefits of submitting as soon as possible
Filing this early may have other benefits for Americans hardest hit by the coronavirus pandemic.
People may be running for the submission in hopes that they will get a refund soon, which for many is the greatest godsend they see all year round. The quickest way to get a refund owed is to file your taxes ASAP, said Elaine Maag, a research fellow at the Urban-Brookings Tax Policy Center.
“There’s no point in waiting,” she said.
Filing a tax return is also the only option for Americans who haven’t received stimulus checks they were entitled to or who haven’t received the correct amount to receive the money.
If you had a drop in income in 2020 or had a child, you may be able to receive incentive payments that you did not qualify for based on 2019 income. You may also be able to apply for tax credits to help middle- and low-income Americans, such as: Such as the Earned Income Tax Credit and Child Tax Credit, which can be worth hundreds or thousands of dollars depending on income and family size.
Filing a return is also one of the best ways to make sure the IRS has your current banking details and addresses that could help you with future stimulus payments, Maag said.
Early filing can protect against fraud
Filing this early can also help keep you safe from tax fraud, according to Kelley Long, a certified financial planner, CPA and a member of the American Institute of CPAs’ Consumer Financial Education Advocates.
If someone stole your identity and files a tax return on your behalf to claim a refund, you will run into trouble submitting your actual information, she said. Then it is your responsibility to prove to the IRS that the return submitted on your behalf was fraudulent and provide them with the correct information.
Waiting has no advantage.
Principal Research Fellow at the Urban-Brookings Tax Policy Center.
The agency will investigate, thereby delaying you on the money owed.
“You don’t want to worry about that extra step to prove someone stole your identity,” Long said.
Tax returns can be changed if necessary
Of course, as Congress continues to fight coronavirus, there could be additional changes to tax legislation that would affect returns for 2020. However, experts say this is not a reason to delay filing your tax information, or at least start filling out your tax return, as it is not clear when another package will become law.
For one, if you plan to work with a tax professional to file an application this year, these will likely get slammed because of the shortened season. So it is best to get in touch as soon as possible.
“I think it’s more cautious this year getting everything right,” said Anjali Jariwala, CFP, CPA and founder of FIT Advisors in Torrance, California.
If laws are passed that would change your return, you can always file an amended one later, she said.
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