In late December, the President changed the United States tax code for the first time in 30 years by signing the Republican tax bill into law. Changes include new tax brackets and modified tax deductions that went into effect January 1st. Your tax return for the 2017 tax year will not be affected. Before you file you must collect all your 2017 tax documents. If you’re an employee, that means your W-2, interest-bearing savings account, mortgage interest, property taxes, or interest paid on a loan. The IRS says fastest way to get tax refund is filing electronically and selecting direct deposit to receive refund. The deadline to file taxes falls on April 17th. The reason for change in date is that April 15th falls on Sunday and April 16th is Emancipation Day celebrated in Washington D.C.
Tax season presents opportunities for identity thieves to steal your Social Security number and file a fraudulent tax return. The best way to protect yourself against tax scams is to file your tax return as soon as possible. If you think you are a victim of identity theft or tax fraud report it immediately to the Treasury Inspector General for Tax Administration. Keep in mind the IRS never discusses personal tax issues through unsolicited emails, texts, or social media. When the IRS needs to contact you it will only be via letter sent through the US Postal Service. Here’s what to expect during this year’s tax season.
The IRS Will Accept Returns January 29th
Refunds will go out within 21 days of filing for most
Your refund should reach bank account within three weeks of filing electronically if you opted to receive direct deposit. You can always check your refund status by going to Where’s My Refund on IRS website. You can verify status after 24 hours from electronic filing or four weeks after mailing in a return.
If you owe taxes, you do not pay when you file
Your tax bill is not due until April 17th no matter what day you filled your return. When you file you can schedule a payment by due date if you are not ready at filing. If you cannot afford to pay your tax bill the IRS will work with you to set up a payment plan. You also have an option called offer in compromise to settle bill for less than owed or request a deferment until you can make payment.
Keep copies of old tax returns for at least 3 years
The IRS recommends keeping copies of tax returns for at least three years this is the typical length the IRS would look back if audited. When you dispose of old tax returns ensure all documents are properly shredded to protect against identity theft.
Review your tax withholding
Our financial situation changes overtime, for example, we get married, buy a home, or have a child. It is a good idea to review your W-4 tax withholding form at the start of a new year.