Expecting A Tax Refund? Why the "Early Bird" might wait for the "Worm."
The season is upon us: Internal Revenue Service (IRS) opened tax season yesterday, on January 29, 2018. In my office, we have all hands on deck moving with even greater urgency than usual and the rate of coffee consumption has doubled. Otherwise, this simply means that the IRS will now accept both paper and electronic tax returns (a week later than had been previously reported). Each year, without fail taxpayers have questions about filing. Many software companies and tax professionals will accept tax returns before opening day, but that doesn't mean that your return will be filed early. Tax professionals and software companies alike are limited to the same restrictions and can only submit returns when IRS systems open. While the IRS began accepting both electronic and paper tax returns on January 29, 2018, paper tax returns won't be processed until the middle of February.
If you're expecting a refund, the IRS strongly encourages people to file their tax returns electronically. While this generally expedites the process, the law now requires the IRS to hold refunds tied to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until February 15. Remember that the rule applies to the entire refund - even the portion not associated with the EITC and ACTC. You should be aware of the potential for additional delays: factoring weekends and President’s Day, the IRS expects the earliest EITC/ACTC related refunds to be deposited in bank accounts or loaded on debit cards starting on February 27, 2018. That's assuming that affected taxpayers opt for direct deposit and that there are no other issues with the tax return. If I've thrown too much cold water on the excitement and anticipation of your tax refund, here is some good news: The IRS still anticipates issuing more than nine out of 10 refunds in less than 21 days. After filing, taxpayers can check out Where's My Refund? on IRS.gov or the IRS2Go phone app for projected deposit dates.
This year, instead of April 15th, the filing deadline to submit 2017 tax returns is April 17, 2018. This isn't an act of benevolence - it's because April 15 falls on a Sunday, and Emancipation Day falls on Monday, April 16 this year. In the District of Columbia this is a federal holiday, hence the April 17th due date. Although it sounds like extra time, 2018 actually has a condensed tax season; due to the delayed start, the 2018 tax season will last just 79 days (by comparison, last year's lasted 86 days). With that in mind, maybe I'd better be getting back to work.
Eric J. Pelton, CPA and his team of experienced professionals are never too busy to answer a question or handle your tax filing preparation. Email him here or call 423-622-3156 today and schedule a free consultation.