In the federal budget bill passed February 9, Congress revived dozens of expired tax breaks retroactively for 2017. Here are the ones you may be able to use:
If you think you qualify for any of these, remember to bring all related documentation to your next tax filing appointment. The IRS is now scrambling to figure out how to apply these late changes to the already published 1040 tax form for 2017.
Your mailbox has probably started filling up with tax forms over the last several weeks and there are likely more to come. Getting these forms organized makes your tax filing easier for everyone involved. Here are some tips on how to handle all the forms you get and to prevent any potential problems.
Collect Them All
Check your tax records from last year, and make a list of the forms you received. Add any new accounts, employers, or vendors and check the forms off as you get them. Gathering all your forms is important because the IRS gets copies of each form sent to them as well. Missing one can trigger an IRS correspondence audit, creating extra work and possibly delaying your refund.
Check for Digital Forms
More employers, banks, and others are making their tax forms available to you electronically, so you may not get a paper form in the mail. Be sure to check your email inbox for any missing forms before you file, and don’t forget to check your “junk” or “spam” email folders as well, just in case any tax information accidentally ends up there.
Double check to see if there are any errors on the forms you receive. If there are, contact the issuer via phone and in writing to get the problem fixed. If you can't get a corrected form, still report everything on your forms to the IRS, but add a correction explaining the error when you file your return. That way you can still file without waiting for the issuer to send you a corrected form.
Commonly Overlooked Forms
While getting all your W-2 and 1099 forms is important, there are two crucial forms that you also need before you file:
Scammers were very successful last year with a scheme to snatch W-2 pay stub data from employers. The IRS is warning that it may be one of several techniques scammers utilize this year.
How the W-2 Scam Works
Fraudsters simply identify employees with access to company payroll data and pretend to be a fellow employee emailing from an outside address. “Hi, I work in accounting. Do you think you could send me the payroll data on file? I’m traveling today and working on preparing my 2017 tax return.”
The IRS said this surprisingly simple tactic worked on more than 200 employers last year and compromised the W-2 information of hundreds of thousands of employees. The stolen data included names, addresses, Social Security numbers, income and withholdings. Scammers then used the data to file returns and claim refunds from the employees' tax withholdings.
If you’re an employee, it’s hard to defend against this kind of scam because the breach happens to your employer. If you file and get an IRS notice that a return has already been filed in your name, you’ll know you’re a victim.
How to Minimize Your Risk
If your refund was nabbed by a scammer, the good news is that the IRS will still eventually send you a replacement refund. The bad news is it can take a very long time—six months to a year or longer—for the IRS to investigate your case.
If that doesn’t sound appealing, know that there are a few things you can do to minimize your risk:
Tax filing season has officially begun. Not many people file this early, but for some taxpayers it makes sense to do so. Here are some reasons you might consider trying to be at the head of the line:
You’re worried about tax identity fraud. One of the most common scams by identity thieves is to impersonate someone, file a return on their behalf, and snatch their refund check. But once you’ve filed, the window of opportunity for identity thieves closes. If you’ve had problems with your identity being stolen in the past, or your information has been compromised, consider filing early.
You want to avoid a dependent dispute. One of the most common reasons a return is rejected is when you claim a dependent who has already been claimed by someone else. This often happens when there is shared custody of a child.
Someone needs a completed return from you. If you anticipate buying a house early in 2018 or making any other transaction that will need a tax return as proof of income, you may want to file early so you can provide current tax information. This is particularly important if you are self-employed and don’t have pay stubs to use as proof of income.
You have a complex problem to work out. If you have a complex tax problem to work out, do yourself a favor and get your tax return appointment scheduled early. Otherwise it’s hard to get the detailed attention you need in the rush just ahead of the April 17 deadline.
You need the refund ASAP. Of course, everyone would like their refund as soon as possible. One thing to remember is that while the IRS starts accepting returns on the 29th, they won’t begin processing paper returns until mid-February. Returns that claim the Earned Income Tax Credit and the Additional Child Tax Credit will see processing of their returns further delayed until sometime after Feb. 15. But absent those exceptions, the sooner your tax return is in the queue, the sooner you should receive your refund.