The IRS will begin accepting 2017 income tax returns on January 29. You may be more focused on the April 17 filing deadline, or even the extended deadline of October 15 (if you file for an extension by April 17). If you’re busy getting things in order in the new year, you may find it inconvenient to file your return any earlier than you’re required to. But there’s one major advantage to filing as close to January 29 as possible: protecting yourself from tax identity theft.
In an all-too-common scam, thieves use victims’ personal information to file fraudulent tax returns electronically and claim bogus refunds. This scam is typically carried out early in the tax-filing season. A victim typically discovers the fraud after he or she files a tax return and is informed by the IRS that the return has been rejected because another return with the same Social Security number has already been filed for the same tax year. The IRS then must determine who the legitimate taxpayer is.
Tax identity theft can result in major complications that take time to get sorted out, a process which can significantly delay legitimate refunds. But if you file first — before a scammer gets the opportunity to — the fraudulent tax return filed by the potential thief will be rejected by the IRS instead of yours.
The IRS is working with the tax industry and states to improve safeguards that protect taxpayers from tax identity theft, but filing early may still be your best defense.
Early birds take note: Jan. 29 is the first day you can submit your 2017 return.
W-2s and 1099s
Of course, in order to file your tax return, you’ll need to have your W-2s and 1099s. So another key date to keep in mind is January 31 — the deadline for employers to issue 2017 Form W-2 to employees and, generally, for businesses to issue Form 1099 to recipients for any 2017 interest, dividend or reportable miscellaneous income payments.
If you don’t receive a W-2 or 1099, your first step should be contacting the entity that should have issued it. If by mid-February you still haven’t received it, you can reach out to the IRS for help.
Early returns result in quicker refunds
If you’re expecting a tax refund, another obvious benefit of filing early is that you’ll receive your refund sooner. The IRS expects over 90 percent of refunds to be issued within 21 days.
E-filing and requesting a direct deposit refund generally will result in a quicker refund and also can be more secure. If you have questions about tax identity theft or would like assistance filing your 2017 return early, please contact your KraftCPAs tax advisor.