Time to Hit the Ground Running

As holiday festivities come to a close and the tunes of “Auld Lang Syne” fade into the distance, the New Year brings new resolutions, new opportunities, and for some a new start at financial goals.  Since January marks the early beginnings of tax season, no better time than now to hit the ground running and get prepared for tax filing in 2018.

This year, the IRS will begin accepting tax returns on January 29, 2018 with approximately 155 million individual tax returns predicted.  The IRS set this deadline to allow for security and updates to the tax processing system and strengthening taxpayer protection from identity theft and refund fraud. 

The usual deadline to file taxes on earned income is April 15th, unless this day is a holiday or weekend.  For 2018, April 15th is a Sunday.   For the second year in a row, the tax filing deadline is getting another extension due to Emancipation Day.   For historical information about Emancipation day, see here: https://www.timeanddate.com/holidays/us/emancipation-day-dc

Despite the fact that Emancipation Day is a legal Washington D.C. holiday held annually on April 16th, it affects government operations similar to federal holidays.  As a result, taxpayers get two extra days this year, until April 17, 2018 at midnight, to submit tax returns.  

In order to hit the ground running in preparation for April 17th, the IRS needs to know exactly who is filing and who is covered in the tax return.  Social security numbers, dates of birth for the filer, spouse, and dependents are necessary.  Additional items include income information, adjustments to income, itemized tax deductions and credits, along with information about taxes paid through income tax and tax payments made throughout the year.

As a reminder, the IRS encourages taxpayers to keep copies of prior-year tax returns and supporting documentation for three years following the filing date.  Why is this important?  Keeping returns for the three-year timeline is tied to the IRS statute of limitation to file claims on refunds.   Under the statute, if you do not file a claim for a refund that you are entitled to, you have the later of three years from the date you filed the original return or two years from the date you paid the tax, to file a refund claim.   Similarly, the IRS usually has up to three years from the filing or due date of the return to assess any additional tax owed if income was not correctly reported.   https://www.irs.gov/irm/part25/irm_25-006-001r 

Need a little help getting started?  The IRS has a variety of resources to get help with preparing and filing tax returns on their website.  The official IRS website, www.IRS.gov, has answers to most tax questions, online file forms, secure account access, and the IRS Services Guide.  For another layer of expertise, finding a trusted tax professional can provide essential and helpful advice and information to accurately prepare and file your return.  

On Your Mark, Set, Get Ready to File!

–  Susan Amsler

–  January 10, 2018

Randolph Business Resources, LLC.
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