Receiving an earlier refund is not guaranteed to all who file their taxes early. Signed into law in December, the 2006 Tax Relief and Health Care Act extend certain tax deductions past their previous expiration dates.
This is bad news for early filers who qualify for those deductions, because they will receive their return later than they expected.
Even though it’s only a small percentage, those people who file for state and local sales tax deductions, higher education tuition and fees deductions, and the $250 educator expense deductions are most affected, said the IRS.
Those three deductions were claimed by only 930,000 filers by Feb. 1 last year.
In 2006, 11.2 million people filed for sales tax deduction, 4.7 million filed for the tuition and fees deduction, and 3.5 million filed for the educator expense deduction.
Sadly, most people tend to wait until February to file their tax returns.
Filing electronically cuts down on time and paperwork, and decreases the possibility of making a mistake. However, while e-filing is also easier and cheaper, the do-it-yourself e-filer must double check their math for errors.
It is also very important to compare your W2 to your last pay stub, and the number on this year's return to the previous year's return. One of the common mistakes usually made by taxpayers is have the wrong Social Security number on their tad return.
Whether you file yourself or have a professional file for you, always keep tax return-related records. Put everything in a file, Hammonds said. Organization is the key.
In the same way the extended deductions work, if you want to get interest on dividends, it is advisable that individuals who have brokerage accounts to wait until the first week of March to file Form 1099.
Please consult a tax professional or log on to the IRS website at irs. gov or by calling 1-1-800-829-3676 for more information
Earnest Young is a tax and accounting writer for Accent Accounting and Taxes http://accentaccounting.net/