The Internal Revenue Service urged taxpayers to take action now to avoid surprises when they file next year and ensure a smooth processing of their 2019 tax return.
This is the first in a series of reminders to help taxpayers prepare for the next tax filing season. For this, the IRS recently updated a special page on its website that describes the steps that taxpayers can now take to prepare for the 2020 tax filing season.
Gather documents and organize tax files
The IRS urges all taxpayers to develop a file maintenance system, electronic or paper, to keep important information in one place. Keep copies of the statements submitted and supporting documents for at least three years. Add files as they are received. Having the necessary documents on hand before starting to prepare your return helps taxpayers to file a complete and accurate tax return.
Taxpayers must confirm that each employer, bank or other payer has a current postal or email address. Typically, these forms begin arriving by mail, or are available online, in January. Check them carefully and, if any of the information shown is incorrect, contact the payer immediately for a correction.
To avoid delays in reimbursements, taxpayers should avoid the use of incomplete files and, instead, wait to file until they have collected all the documentation of end-of-year income. This will minimize the chances of having to file an amended return later, which is additional work for taxpayers and can take up to 16 weeks to process once the IRS receives it.
Taxpayers who use a software product for the first time may need the adjusted gross income (AGI) amount shown on Line 7 of their 2018 return to file their 2019 tax return electronically. You should check the statement from the previous year or the link to view your account at IRS.gov. Learn more about identity verification and the electronic signature of a return in Verify your tax return after filing electronically.
Notify the IRS of address changes and notify the Social Security Administration of a legal name change to avoid a delay in processing your tax return.
Renew expiring ITINs
Taxpayers with expired Taxpayer Identification Numbers (ITIN) can renew their ITINs more quickly and avoid delays in reimbursements next year by submitting their renewal application soon.
An ITIN is a tax identification number used by taxpayers who do not qualify to obtain a Social Security number. Any ITIN with average digits 83, 84, 85, 86 or 87 will expire at the end of this year. In addition, any ITIN that has not been used in a tax return in the last three years will expire. As a reminder, ITINs with average digits 70 to 82 that expired in 2016, 2017 or 2018 can also be renewed.
The IRS urges any affected person to submit a complete renewal application, Form W-7, IRS Taxpayer Personal Identification Number Application, as soon as possible. Be sure to include all required identification and residency documents. Otherwise, processing will be delayed until the IRS receives these documents.
Once a completed form is submitted, it usually takes about seven weeks to receive an ITIN assignment letter from the IRS. But it may take longer, from nine to 11 weeks, if an applicant waits until the filing season to submit this form or sends it from abroad. Taxpayers must take action now to avoid delays.
Taxpayers who do not renew an ITIN before filing a tax return next year may face a deferred refund and may not be eligible for certain tax credits. With about 2 million homes of taxpayers affected, the application will now help avoid haste, as well as delays in reimbursement and processing in 2020. For more information, visit the ITIN information page on IRS.gov.
Prepare to submit electronically; use direct deposit for refunds
Electronic filing is easy, secure and the most accurate way to file taxes. There are a variety of free electronic filing options for most taxpayers, including the use of the IRS Free File for taxpayers with incomes under $ 66,000 or interactive forms for those who earn more. Taxpayers who earn $ 56,000 or less can get free help preparing their tax return at a Volunteer Taxpayer Assistance or Tax Advice for the Elderly site.
Combining direct deposit (in English) with electronic filing is the fastest way for a taxpayer to get a refund. With direct deposit, a refund goes directly to the taxpayer’s bank account. You do not have to worry about a lost, stolen or undelivered refund check. This is the same electronic transfer system that is now used to deposit almost 98 percent of all Social Security and Veterans Affairs benefits. Almost four out of five federal tax refunds are deposited directly.
Direct deposit is easy to use. Taxpayers simply select it as their method of reimbursement through the tax software or inform their tax preparer that they want a direct deposit. Taxpayers can even use direct deposit if they file a paper return. Be sure to have your bank account and routing numbers handy when submitting and verifying the information to avoid mistakes.
Direct deposit also saves taxpayer money. Taxpayers cost more than $ 1 for each refund check issued, but only one cent for each direct deposit.
By law, the IRS cannot issue refunds for those who claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. The law requires that the IRS withhold full refund, including the part not associated with EITC or ACTC. This change in law, which took effect in early 2017, helps ensure that taxpayers receive their reimbursement by giving the IRS more time to detect and prevent fraud.
As always, the IRS warns taxpayers not to trust a refund on a certain date, especially when making major purchases or paying bills. Keep in mind that some statements may require additional review for a variety of reasons and may take longer. For example, the IRS, along with its partners in the state and nation’s tax industry, continue to strengthen security reviews to help protect against identity theft and reimbursement fraud.
Start with IRS.gov to get help that includes tools, tax filing options, other services and resources. Taxpayers increasingly use IRS.gov as their first resource for tax matters. Information in languages other than English is available on the “Language” tab on IRS.gov. The Let us help you page presents links that lead users to information and resources about a wide range of topics.