File your taxes early in 2018 or somebody else may do it first. How early is too early? The IRS recently announced that the first day tax filers can submit their 2017 tax returns will be approximately Tuesday, January 16, 2018. But this doesn’t mean a tax filer can file their taxes before receiving and properly including all required documentation. Most tax documents are required to be provided to the tax filer no later than January 31, 2018.
Why file your taxes early in 2018?
1. The chance of fraud and identity theft is less likely
The number of data breaches was already on a record pace for 2017 before the reported theft of nearly 145 million Americans’ names, addresses and Social Security numbers brought the issue to the forefront. In the first half of 2017, the number of data breaches increased by 29 percent, to a record 791 incidents, according to Identity Theft Resource Center and CyberScout, which sponsored the report.
Generally, thieves want to take advantage of the stolen data as quickly as possible. They might sell the data on the Dark Web, access financial accounts for withdrawals or credit cards for charges. Thieves can also file a fraudulent tax return in victims’ names for a refund. IRS Newsroom
2. If you think you’ll have problems claiming your legal dependents, don’t drag your feet
Blended and estranged families are no longer the exception, and parents often don’t see eye-to-eye on everything, including who they think should claim a child as a tax dependent. Many adult siblings find themselves caring for parents, but too late realizing they’ve never discussed tax issues. Confusion can also arise when adult dependents file their own returns and claim their own personal exemption, not knowing they are being claimed by a parent or possibly a care-giving child. Who claims those Kiddos?
Racing to file your tax return first is not necessarily the answer or cure-all to these issues. Most of the time, family consultations regarding tax planning relative to adult or child dependency issues will eliminate confusion. However, in situations of possible or probable conflict, early filing would be wisely considered in overall tax planning. IRS Dependents
3. Receive a faster refund or know what you’ll owe sooner
Again this year, the longer you wait to file, the more likely you are to see slower refunds, especially when the EITC, Earned Income Tax Credit, and ACTC, Additional Child Tax Credit have been claimed. If you’re worried about pending or probable tax problems and are hiring a CPA tax professional for the first time, filing as early as possible will give you and me (as your choice of a CPA tax professional) time to prepare a strategy to best handle your issues.
Wondering how you can file taxes early in 2018?
Tax preparation is an ongoing process. Most of our individual and business tax clients have a good understanding of their tax because we help them maintain proactive tax planning throughout the year. Lifestyle and/or business circumstances may be very different in the third quarter than in the first. Proactive tax planning is good business planning, but is also the approach to take in your individual tax preparation. Tax preparation is what you, as an individual or as a business, do throughout the year so that you’ll be prepared to present your information to the IRS when your tax return is filed, or submitted. No surprises.
What’s the bottom line?
We establish and maintain a personal and business relationship with our clients. Your LIFE Is your Business and Your BUSINESS Is Your Life.
Quick TIP: Don’t wave red flags at the IRS. They’re not overstaffed and they don’t have a lot of spare time! If they see red flags, they see a big ROI…