4 Reasons to File Your Taxes in January (Missing Stimulus Money is #2)
by Susannah McQuitty
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January is usually not the first month people think of when it comes to taxes (April takes the cake on that one), but should it be?
The IRS typically starts processing tax returns in mid-to-late January. However, when you file with 1040.com, you can prepare your taxes even sooner; the first or second week of January usually sees us ready to roll.
So what’s the big deal with filing early, and why would you want to do your taxes before the IRS even opens?
File your tax info as it arrives
The beginning of the year sees the trickling in of important tax documents, like Forms W-2 (if you’re an employee). As those mailed forms or online PDFs come together, there’s no reason to wait on everything to arrive before you start—especially if a W-2 is all you’re expecting to get.
Also, if you get hit with a surprise and find out you have to pay more taxes to Uncle Sam instead of collecting a refund, you’ll have plenty of time to figure out how you’re going to cover it before April 15. (That’s right—you can file early and delay payment until April 15).
Didn’t get part of your stimulus payment? Claim it with the Recovery Rebate Credit
Thousands of taxpayers are still missing money from their stimulus payments, and while some may still get the payment before they have to file their taxes, many will have to claim the missing amount with the Recovery Rebate Credit.
This credit allows you to report how much stimulus money you received. You can refer to Notice 1444, which should have been mailed to you for your records, or you can request your account transcript online to see how much stimulus money you received. Once you report that, any amount missing that you qualify for will automatically be calculated, and whatever you didn’t get will be added to your refund (or used to reduce your taxes owed).
The IRS has until January 15 to distribute the second round of stimulus payments. If you haven’t received your second payment by January 15, request your account transcript online to see if you have been issued a stimulus payment. If IRS records show that a payment was issued, it means you are due to receive a payment and should not try to claim that money when you file your taxes (your payment could just be delayed). If your transcript does not show a stimulus payment, you should file your taxes and claim the missing amount with the Recovery Rebate Credit.
Get one step closer to your refund
It’s a well-known rule of thumb that if you want quick service, beat the crowd to the door. When you finish your taxes early, the IRS can receive and approve your return sooner when they open for processing.
And, of course, that means any refund you’re owed will get the green light to head your way—so filing early means getting your refund quicker (unless you claim the EITC or CTC, then it gets the green light in mid-February at the earliest, due to the PATH Act).
Keep your tax info secure
Filing early is a foolproof way to keep tax frauds from filing a return in your name. Even if someone has your information—Social Security Number, tax identification number, whatever—they can’t file a false return if you’ve already submitted one.
Once the IRS receives and accepts a return with your unique ID (Social Security Number or Individual Taxpayer Identification Number), any other filing attempts fail. Finishing early means your chances of losing out to a fraudster drop significantly.
Haven’t started yet? Now’s the time
We at 1040.com have been hard at work helping people prepare their tax returns since January 4—we think early filing is definitely the way to go, and our easy interview makes the process quick and simple.
Not only that, but we guarantee 100% accurate calculations and your biggest possible refund, all for just one flat $25 rate, which makes filing with 1040.com so special. Start off your new year on the right foot: Sign up or log in to file your taxes today!
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