We are a few days away from the end of 2019 and once again getting ready for the 2019 tax filing tax season. By the second week in January, employers will begin mailing out W-2s to employees and 1099s to contractors. Depending on the tax impact of the financial activities during the year, some taxpayers should anticipate receiving other series of 1099 forms, 1098, 1095. I often advise my clients to open a tax folder to keep all these documents to avoid losing or erroneously omitting them from the documents given to the tax preparer. Below are a few things to know to get ready for the upcoming tax season.
Taxpayers who plan to itemize deductions still have till December 31st to make charitable contributions. Charitable contributions are deductible in the year made. Donations charged to a credit card or checks mailed by the last day in 2019 will count towards your itemized deductions for the 2019 tax return.
Did you move or change your address in 2019? If you answered yes to this question, you will need to notify the US postal service, employers and the IRS. To notify the IRS, mail a completed Form 8822, change of address, to the mailing address listed on the form’s instructions. This is important to prevent mails from being sent to the wrong address.
If you changed your name due to marriage, divorce, or a dependent’s name changed during the year, notify the Social Security Administration (SSA) to prevent a name mismatch between the IRS and the SSA records. A name mismatch between these two agencies causes a delay in refunds.
ITINs (Individual Taxpayer Identification Number)
An ITIN is a tax ID used by taxpayers who don’t qualify to get a social security number. Taxpayers with expiring ITIN can get their ITINs renewed more quickly to avoid refund delays by submitting their renewal application soon. More information, including answers to frequently asked questions, is available on IRS.gov/ITIN.
Keeping copies of tax returns is important. As a practice, I request a prior-year tax return from new clients. It is also key to keep proper records of the supporting documents of the return. Your tax preparer should give you a copy of the completed return. For a more secure document exchange, most tax preparers have adopted the use of a secure portal. It is advisable to request a soft copy of the return to prevent having to request for it at later in the future. It is mandatory that taxpayers keep good records of all documents that will corroborate expense, income and credit claimed on the return.
Different factors affect the timing of refunds. Most taxpayers get their refunds faster by filing electronically and using direct deposit. This is a simple and secure way of getting your return submitted and your refunds. Below are a few things to should keep in mind as far as refund goes:
- Typically, the IRS issues refunds in less than 21 days. Some tax refund may take longer to process. Some require additional review, and some are delayed due to errors or mistakes on the return. Often time, IRS will contact taxpayers by mail when more information is needed to process a return.
- By law, IRS does not issue refunds to people claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. This is to ensure taxpayers receive the refund that is due to them by giving the IRS more time to review to prevent and detect fraud.