Believe it or not, in the recent past, Federal Income Tax rules were rather straightforward without significant changes year to year. The regular taxpayer got a little free booklet from the government. Following the guide, a payer filled out the form using a pen and mailed it with a check if money was due.
In the good old days, very little stress was involved. A few necessary receipts were thrown in a box throughout the year. On tax paying day, the little scraps of paper were organized and tallied by hand to obtain totals for line items on the form.
When I was pregnant with my first baby, I went into labor in February. I told my husband I wanted to do the taxes before going to the hospital as I would be busy afterward. Within a few hours the taxes were finished, and I was holding a beautiful baby boy.
These days, a few folks can use the 1040EZ, but only if they have no dependents or significant deductions. To use this form married couples cannot file separately. Very few people qualify for the easy route.
This year the IRS published an encouragement for taxpayers to jump in and get their taxes completed. They give five main reasons that earlier is better.
The primary concern is that the longer a taxpayer waits, the more time tax thieves have. Unfortunately, there are villains that have the skills to steal identities and file for tax return funds that belong to others.
File early if someone else knows the Social Security numbers of children or might try to claim them. This often is a parent who does not have full custody or the legal right to claim a child.
If a child is falsely claimed by another person, do not despair. The situation can be corrected, but it is not easy. A single parent who suspects there might be foul play should file using a local tax consultant. That way help is available if needed.
For divorcing or separated parents, be aware that only one filer may claim each child. This usually is the parent who has the most custody time, but situations vary. It is best to work out who claims a child for tax purposes in the divorce settlement. If there ever is a question, the IRS needs such documentation.
Parents or college students who have filled out a FASFA should also file taxes as soon as possible. Financial aid eligibility depends on income proven by tax information. Estimated taxes may be accepted for filing, but true numbers should be submitted as soon as possible.
Taxpayers often need tax returns for other financial matters. The sooner someone fills, the sooner the forms are available if needed.
For some folks the best reason to file early is the hope of an early refund. To avoid under payment penalties, many people overpay taxes. Afterall, it is much more enjoyable to receive a refund than to come up with cash to pay taxes and a possible penalty.
As always, be on alert for tax scammers this time of year. Such crooks are getting cleverer at using tax scares to steal money. Do not talk to anyone who calls on the phone about taxes. Do not click reply to emails claiming to be from the IRS. Guard all Social Security numbers.
Please note, I am not a tax specialist. The information provide here was gleaned from newsletters and online postings. Please consult a local tax advisor regarding tax liability situations.
Being proactive and getting taxes done is always a good idea. Avoid tax scammers. Hopefully, a nice refund will enable you to do some fun shopping locally.