The Start of Tax Filing Season Is Delayed
Editor's Note: This article is part of our 2014 Tax Tips series. Robert Flach is an expert with more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.
NEW YORK (MainStreet) Thanks to last fall's government shutdown, the IRS will not begin processing electronic or paper income tax returns until January 31.
The Service generally begins the tax filing season on January 21 but needed the additional ten days to properly program and test its tax processing systems.
This is the second year that the processing of tax returns is delayed. Last year the start of the filing season was pushed to January 30, 2013, because of the last minute passage of The American Taxpayer Relief Act. The processing of returns claiming depreciation and amortization deductions, education and energy credits, and passive losses was delayed until late February.
Regardless of when the processing of returns will begin, you should not rush to be the first on your block to file your 1040. Don't begin work on your returns, or give your "stuff" to your tax preparer until you have received all the necessary forms and information - every W-2, every 1098, every 1099, and every K-1.
On several occasions a client came in to my office during the first days of the filing season to have his or her 1040 prepared, only to receive another Form 1099 in the mail the day after the return was mailed to the IRS.
If you have a brokerage account there is an excellent chance that you will receive at least one corrected "Consolidated 1099 Statement" to revise the amount of dividends, interest and gross proceeds after the original statement arrives in February. The final corrected 1099 may not arrive until March.
But don't wait until the last minute.
Many taxpayers who expect to owe wait until April to begin to get their "stuff" together to prepare their return. Be aware that many tax preparers set a cut-off date, often March 31, after which they no longer accept returns to be completed in time to be filed by April 15.
Even if you think you will owe taxes, have your returns prepared as soon as you receive all the information. You don't have to file them and pay the tax until April 15. By having your 1040 prepared early, you will know exactly how much you owe and have a month or two to come up with the money instead of trying to juggle funds days before the deadline.
--Written by Robert D. Flach for MainStreet