Tax season is here: How to make filing relatively painless
Keep an eye on your mailbox over the next few weeks: All of the information you need to prepare your return should be on its way.
Filing season for the 2017 tax year began on Jan. 29. This year, the IRS bumped the deadline to file returns to April 17 because the traditional filing date of April 15 falls on a Sunday. And Emancipation Day — a legal holiday in some locations — will be observed Monday, April 16.
The IRS expects it will receive nearly 155 million individual tax returns this season.
There's good reason to get organized and file in a timely fashion this year. Experts have said the massive Equifax credit breach could contribute to tax fraud.
Even if you submit your return early, you'll have to wait a while for your refund if you claim the earned income tax credit or the additional child tax credit. Those who choose direct deposit will receive those refunds starting on Feb. 27.
The IRS has delayed refunds on returns claiming these two credits in order to give itself more time to detect phony returns and keep cash out of the hands of thieves.
Here's what you'll need to get a jump start on your filing.What's new
Though most of the changes from the Tax Cuts and Jobs Act will take effect in the 2018 tax year, one major change will affect the 2017 filing season.
Under the previous tax law, filers who take the medical expense deduction could only deduct qualifying costs that exceed 10 percent of their adjusted gross income.
Now, that threshold has been dropped to 7.5 percent for the 2017 and 2018 tax years.
You can also still save on your 2017 taxes if you make an IRA contribution by April 17.
Other than that, the opportunities to save this filing season are limited.
"It would be challenging at this point to be able to make some kind of payment and get a benefit in 2017," said Melissa Labant, director of tax policy and advocacy at the American institute of Certified Public Accountants.
Here's when to look for key documents in your mailbox (or email inbox):January
If you're an employee, you should have already received your W-2.
Businesses that hire independent contractors should have given them their 1099-MISC by the end of January. It will include information regarding nonemployee income.
However, if you're an independent contractor, you should be tracking your income throughout the year.
"Be proactive and contact companies to find out when they're issuing those 1099-MISC forms," said Gavin Morrissey, managing partner at Financial Strategy Associates in Needham, Massachusetts.
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