The IRS has pushed back the beginning of tax season by 10 days. As you get everything ready to prepare your tax return, take a minute to clarify some of these common misconceptions about the delay and what it means for you.
Misconception #1: Tax season begins January 21
Originally, the IRS scheduled tax season to begin on January 21. The IRS has pushed this date back to January 31.
However, this doesn’t mean you should hold off on the important step of gathering all your tax return information as quickly as it is available. For many taxpayers, there will be no reason to wait to prepare your returns – those who e-file earliest will be first in line once e-filing opens.
The fastest way to get your refund is to have your tax return done and waiting to be e-filed on the date the IRS opens its door for your 2013 return. H&R Block offices opened on January 6. They will hold your completed return and send it once the IRS accepts them on a first come, first serve basis.
Misconception #2: All tax season delays are the same
It is true that there was also a delay last year to the start of tax season. But that delay was due to a different reason – late tax law changes made by Congress in the American Taxpayer Relief Act. Additionally, last year some tax returns with certain forms or schedules were pushed back even further to match up to the late-passed tax law changes.
This year’s delay is directly due to the federal government shutdown in October. While there is no good time for a 16-day governmental shutdown, this one happened during the IRS’ advanced scheduled testing and updates of their system.
Misconception #3: You will have additional time to file your return
April 15 is the due date for your return regardless of when the IRS starts accepting returns. That date is fixed by law. The penalties and interest due on any unpaid tax liability owed will begin to accrue on April 16, 2014. The delay only means a compressed tax season. Be prepared for longer waits on hold if you are calling the IRS during tax season since the same number of people will need to file over a shorter period of time.
Misconception #4: I will just paper file my return to avoid the delay
No. The IRS will not process any returns before January 31. Since it takes the IRS longer to process paper-filed returns than e-filed returns, you would just be shooting yourself in the foot. If you are desperate for your refund, remember there is no advantage to paper filing your return before tax season officially begins.
E-filed returns are typically the most accurate and the quickest way to file your tax return. Last tax season, a record 122 million returns were e-filed out of the total – 147,744,000. The IRS issued more than 109 million refunds worth almost $300 billion for 2012. Almost 77% of refund recipients chose to receive their refunds through direct deposit for quickest access to their refund.
In summary, here’s what you need to know:
• The IRS will start accepting returns on Jan. 31
• E-file returns are processed faster than paper
• The deadline is still April 15