I love tax season – but I'm nerdy like that. However, I know a lot of people that also love tax season because they want to get their tax refunds. And for people wanting to get their tax refunds as soon as possible, early filing is when it happens.
I have several friends that count down the days until the IRS opens eFiling – which for 2015 was on January 20. The reason? If you're getting a refund, the sooner you file the sooner you'll get your tax refund.
But for those who will owe, you can still file early and not have your payment sent until April 15. It might be nice to just get your taxes done and out of the way.
If you want to be an early filer, here are my top tips so that you can get your refund fast and avoid having to amend your tax return later.
Keep Accurate Records
The first thing you need to do is keep your own accurate records. Yes, you'll get a W2 and some other forms, but what really matters isn't what the form says, but what you actually made. This is especially important when it comes to other income sources, such as investing or the sale of your home. In these situations, you want to have proof of what you paid, when you paid it, and more, so that you can accurately calculate your income or loss on the sale.
Furthermore, you'd be surprised how many times forms aren't correct – and it's on you, the taxpayer, to make sure that everything is entered correctly on your tax return whether or not the form was correct.
Make Sure You Have All Your Forms
Next, simply make sure that you have all of your tax forms before you go to file. For most people, this should include a W2, 1099-INT, 1099-DIV, and more.
If you do keep very accurate records, you may be able to get away with not having all your forms prior to filing, but it's usually better safe than sorry when it comes to this.
For some investors, you may not be getting your investing forms until middle of February, and for some partnerships, it could be March or later.
Find The Best Deal On Tax Software
When you are ready to file, you should look for the best deal possible on tax software. All of the major companies are competing for your business, and for many people, filing your taxes is pretty straightforward.
eFile and Use Direct Deposit
To get the fast refund, you should always eFile your tax return to the IRS and elect for direct deposit. This will make sure you refund is processed the fastest and deposited into your bank account quickly – typically within 21 days. We have a tax refund calendar that shows when you can expect your tax refund.
If you mail in your return, you can expect to add 2-4 weeks for processing, or longer. The reason is the IRS has less staffing than past years, so when you mail your return, less people are inputting it into the system.
If you opt for a paper check, you'll also add an additional 1-2 weeks to receive it. The IRS sends your information to the Treasury, who then prints a check and mails it to you. This takes time, and that is time you won't have your refund.
Beware Of Tax Scams
There are two key scams that impact a lot of tax payers that you should be aware of.
The first if a phone scam – the IRS will not call you on the phone and ask for your information. They will send you a letter instead. So, if you get a call from someone claiming to be from the IRS, simply hang up on them and ignore it. These scammers are trying to get your personal information so they can steal your identity and file your tax return instead of you.
Second, be aware of tax preparers that are hyping up getting you the best refund. If you opt to pay a person to prepare your tax return (versus doing it yourself), you are still responsible for it being accurate. I've known several cases where the tax preparer falsified information on the return to boost his customers' refunds – making him look good and getting more business. In the end, all the customers owed backed taxes and it really caused a lot of problems.
You know what's right for your own income – pay the taxes you legally owe.