Americans don’t mess around in this tax season.
In just a week since the opening of the tax filing period on Feb. 12, the IRS received nearly 35 million individual tax returns, according to data the agency released Thursday.
The rush of returns far exceeds what the agency saw last year, even before the coronavirus pandemic hit, and led to an expanded filing window. In the week ending January 31, 2020 – the first of the 2019 tax season – the IRS had received 15.7 million returns, he said.
Even by February 7, 2020, the end of the second week of the 2019 filing season, the IRS had received nearly 29 million individual tax returns, less than they received in just one week this year.
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There are a few reasons why Americans are now in a rush to file. First, the IRS delayed the start of the filing until Feb. 12, so it had time to prepare after sending the second round of incentive payments.
Because the agency has not extended the April 15 filing deadline – and has said it has no intention of doing so – people have less time to get their paperwork and any payments they owe to the IRS.
Advantages of submitting as soon as possible
Filing as soon as possible may have other benefits for Americans hardest hit by the coronavirus pandemic.
People may race to file in hopes of getting a refund soon, which for many is the biggest windfall they see throughout the year. The fastest way to get any refund you owe is to file your taxes as soon as possible, says Elaine Maag, a lead investigator at the Urban-Brookings Tax Policy Center.
“There’s no point in waiting,” she said.
Filing a tax return is also the only way for Americans who did not receive incentive checks for which they were eligible, or did not receive the correct amount, to receive the money.
If you had a drop in income or had a child in 2020, you may be eligible for incentive payments that you were not eligible for based on 2019 income. You may also be able to claim tax credits designed to help middle Americans – and help low income, such as the earned income tax credit and the child tax credit, which can be worth hundreds or thousands of dollars depending on the income and size of the family.
Filing a return is also one of the best ways to make sure the IRS has your current bank information and address, which can help you with any future incentive payments, Maag said.
Filing early can protect against fraud
Filing as soon as possible can also help protect you from tax fraud, said Kelley Long, a certified financial planner, CPA and member of the American Institute of CPA’s Consumer Financial Education Advocates.
If someone stole your identity and files a tax return in your name to request a refund, you’ll be in trouble providing your factual information, she said. Next, it is your responsibility to prove to the IRS that the tax return in your name was fraudulent and provide them with the correct information.
There is no point in waiting.
Elaine Stomach
principal investigator at the Urban-Brookings Tax Policy Center.
The agency will conduct an investigation, delaying you getting the money you owe.
“You don’t want to worry about going the extra mile to prove someone stole your identity,” Long said.
Tax returns can be adjusted as needed
Sure, as Congress continues to work on coronavirus relief, there may be additional tax code changes that will impact returns for 2020. But experts say this is no reason to delay filing your tax information, or at least starting with filling in your declaration, because it is not clear when another package will become law.
First, if you plan on working with a tax professional this year, they will likely be slammed due to the shortened season, so it’s best to get in touch as soon as possible.
“I think it makes more sense this year to get everything situated,” said Anjali Jariwala, CFP, CPA and founder of FIT Advisors in Torrance, California.
If legislation is passed that would change your tax return, you can always file an amended one later, she said.
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