With the Fiscal Cliff crises averted we are now getting excited about filing our 2012 income tax returns. Gather your W-2's and mortgage statements, education expenses and charitable donations, it's time to sit down with the IRS Tax Publications and Instruction Booklets and make your way through the maze of computations and deductions.
Before you get started though, Certified Public Accountant Troy Reichlein offered these tips to make filing easier:
Start Date of the Tax Season
The IRS officially opens business for 2012 tax returns on January 30th. The season was held up a week because of the Fiscal Cliff crises and the IRS was not able to finalize their forms until an agreement had been reached between Congress and the President. So for those of you who have already filed your returns, by paper or electronically, they are sitting in a holding queue until the 30th and will then be submitted en masse to the IRS for processing. If this is you, and you are already counting on your refund being delivered by a certain date, you may want to give it an extra week or two because of so many returns reaching the IRS processing center at once. If you are ready to file but haven't, you may want to wait until the 1st week of February to file so that your return is not part of the stampede of the returns people have filed.
File Early If You Can
Last year there were 3.7 million fraudulent returns filed with the IRS, and the IRS caught 2.2 million of them. One way people file fraudulent returns is by using the social security number of you, your spouse or a dependent. When a return is filed with the IRS, the IRS assumes it is correct and will typically process it as is. Crooks are aware of this and therefore file returns early in the season. When you then go to file your tax return, if your social security number was already used, your return will get rejected. I have this happen every year to people, and the frequency has been increasing year after year. It creates a very frustrating process for people where you must then mail in your return and it delays the processing of the return and refund.
The best way to prevent this from happening is to file your taxes as early as possible. Then when the crooks go and file a return, their return will be the one rejected.
For those of you who owe when your file your taxes, you of course have less motivation to file early. Just because you file early does not mean you have to pay your tax bill early. Your tax bill is due April 15th so you can file in February and pay your tax bill in April. Most electronic tax filing software will also allow you to schedule an automatic debit from your bank account to pay your tax bill at any date you choose. This can be very convenient and ensure that you will not forget to pay your tax bill by the due date. I use this method and have never had an issue with it.
Checking the Status of Your Tax Refund
Once you file your return if you want to know the status of it you can go to the IRS website, IRS.Gov, and select the "Where's My Refund" button. After you enter your social security number, filing status and exact dollar amount of your refund, the website will tell you if they received your refund and what your expected refund date is. You should note that the refund date is the date the IRS sends your refund out. If you are doing direct deposit it will take a day or two longer, and if you are having your refund mailed then the IRS date is the date it will be mailed to you. Information about your return is generally available 24 hours after the return is received by the IRS if you file electronically, or four weeks (yes that is four weeks), if you file by paper.
Information is updated once each evening and if you do not receive your refund by the expected due date you can check the site again for an update. Occasionally returns do get held up and so if you have not received your refund by the expected due date two times in a row, then you may want to call the IRS to see if there is an issue with it.
So with this, happy tax filings to you and yours and enjoy the hours of fun and adventure in making your way through the 2012 tax return forms!