Although taxes aren't due for a number of months, it's never too early to start thinking about them. Here are a few key things you should know going into tax season.
1. The filing deadline is April 17, 2018
The tax filing deadline is typically April 15, but this year, we all get a bit extra leeway. That's because April 15 falls on a Sunday, and so the filing deadline is pushed to the following business day. However, because Monday, April 16, is Emancipation Day -- a legal holiday in the District of Columbia -- the tax filing deadline ends up landing on Tuesday, April 17, instead. That said, if you wind up needing more time than that to complete your tax return, you can request an extension by the filing deadline, which will buy you an extra six months to get your taxes in order. You don't need a particularly compelling reason to get that extension -- you just need to request one in time to get approved.
2. The earliest date to submit your tax return is Jan. 29, 2018
If you're the type who would rather get the tax-filing process over with, here's some good news: The Internal Revenue Service will begin accepting returns as early as Jan. 29 of this year. There are several benefits to preparing your taxes ahead of schedule. If you're due a refund, you'll get your hands on that money sooner than you would by waiting until April. And on the flip side, if you end up owing money to the IRS, you'll have two-and-a-half months to figure out how to pay your tax bill. If you wait till April, you'll have fewer options if you find that you've underpaid your taxes.
3. The new tax laws won't impact your 2017 return
If you've been following the news, you're probably aware that a host of tax changes just took effect that will most likely impact the way people file their taxes. For example, going forward, we'll probably see more filers claim the standard deduction rather than itemize now that that figure has almost doubled. But don't forget that these changes don't actually apply to your 2017 return, which is the one you'll be filing this year. For example, under the new laws, the SALT (state and local tax) deduction is limited to $10,000, but if yours exceeded that threshold for 2017, you can still claim it in full.
4. Most refunds will be issued within 21 days of filing -- but some will be delayed
If you're expecting a refund this year, here's something positive to chew on: The IRS expects most refunds to go out within three weeks of when returns are submitted. That said, if you're claiming certain tax credits, you can bank on your refund getting delayed. Specifically, the IRS must withhold refunds for the Earned Income Tax Credit and the Additional Child Tax Credit until Feb. 15 due to high levels of fraud associated with both. If you're claiming one of these credits, expect your entire refund to be delayed -- even the portion not associated with the credit you're taking.
5. It pays to file electronically
Though you still have the option to file your tax return on paper, these days it makes much more sense to submit your taxes electronically. The aforementioned 21-day time frame for refunds we just talked about? That applies to electronic returns. If you file on paper, you could end up waiting a good six to eight weeks for your money back. Furthermore, you're much less likely to make a mistake on your taxes if you file them electronically. The IRS reports that the error rate for paper returns is a relatively egregious 21%. The error rate for electronic returns, by contrast, is less than 1%.
While you may not be ready to start worrying about taxes just yet, the truth is that the more thought you put into them, the greater your chances of having things go smoothly. And that's a good way to make an otherwise stressful process far less harrowing.
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