The IRS opened the 2019 individual income tax return filing season this past January 27. Although it is typical that you may decide to file closer to the April 15 deadline (or you decide to file for an extension), you may want to consider filing your return as soon as you can this year. There is a good reason for this: filing early can potentially protect you from tax identity theft, in addition to other benefits.
Tax identity theft explained
In a tax identity theft scam, thieves use another individual’s personal information to file a fraudulent tax return early in the filing season and claim an illegitimate refund.
The legitimate taxpayer discovers the fraud when they file a return and are informed by the IRS that the return has been rejected. This is because a return with the same Social Security number has already been filed for the tax year. While the taxpayer should ultimately be able to prove that their return is the valid one, tax identity theft can cause major headaches to resolve and delay a refund significantly. Filing early may be your best defense: If you file first, it will be the tax return filed by a would-be thief that will be rejected, rather than yours.
Your W-2s and 1099s
To file your tax return, you must have received all of your W-2s and 1099s. January 31 was the deadline for employers to issue 2019 Form W-2 to employees and, generally, for businesses to issue Form 1099 to recipients of any 2019 interest, dividend or reportable miscellaneous income payments (including those made to independent contractors).
If you have not received a W-2 or 1099, first contact the entity that should have issued it. If that does not work, you can contact the IRS for help.
Other advantages of filing early
Besides protecting yourself from tax identity theft, another benefit of early filing is that you can obtain your refund faster if you qualify for one. The IRS expects most refunds to be issued within 21 days. The time is typically shorter if you file electronically and receive a refund by direct deposit into a bank account.
Direct deposit also avoids the possibility of a lost or stolen refund check, or that the check is returned to the IRS as undeliverable. Additionally, by using direct deposit, you can split your refund into up to three financial accounts, including a bank account or IRA. Part of the refund can also be used to buy up to $5,000 in U.S. Series I Savings Bonds.
Be an early-bird filer
If you have questions about tax identity theft or would like help filing your 2019 return early, please contact us. We can help you ensure you file an accurate return that takes advantage of all of the breaks available to you.
© 2020Posted on