Plan Ahead for 2018 Filing Season to Avoid Refund Delays

The IRS advises taxpayers about steps they can take now to ensure smooth processing of their 2017 tax return and avoid a delay in getting their refund next year.  Additionally, the IRS has a special page on its website with steps to take now for the 2018 tax filing season.

Gather Documents:

The IRS urges all taxpayers to file a complete and accurate tax return by making sure they have all the documents before they file their return, including their 2016 tax return. This includes Forms W-2 from employers, Forms 1099 from banks and other payers, and Forms 1095-A from the Marketplace for those claiming the Premium Tax Credit. Doing so will help avoid refund delays and the need to file an amended return later. Confirm that each employer, bank or other payer has a current mailing address.

Typically, these forms start arriving by mail in January. Check them over carefully, and if any of the information shown is inaccurate, contact the payer right away for a correction.

Taxpayers should keep a copy of their 2016 tax return and all supporting documents for a minimum of three years. Doing so will make it easier to fill out a 2017 return next year. In addition, taxpayers using a software product for the first time may need the Adjusted Gross Income (AGI) amount from their 2016 return to properly e-file their 2017 return. Learn more about verifying identity and electronically signing a return at Validating Your Electronically Filed Tax Return.

Refunds Held for Those Claiming EITC or ACTC Until Mid-Feb:

By law, the IRS cannot issue refunds for people claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law requires the IRS to hold the entire refund — even the portion not associated with EITC or ACTC. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or debit cards starting on Feb. 27, 2018, if direct deposit was used and there are no other issues with the tax return. This additional period is due to several factors, including the Presidents Day holiday and banking and financial systems needing time to process deposits. This law change, which took effect at the beginning of 2017, helps ensure that taxpayers receive the refund they’re due by giving the IRS more time to detect and prevent fraud.

As always, the IRS cautions taxpayers not to rely on getting a refund by a certain date, especially when making major purchases or paying bills. Though the IRS issues more than nine out of 10 refunds in less than 21 days, some returns require further review.

For a Faster Refund, Choose e-file:

Electronically filing a tax return is the most accurate way to prepare and file. Errors delay refunds and the easiest way to avoid them is to e-file. Nearly 90 percent of all returns are electronically filed.

Use Direct Deposit:

Combining direct deposit with electronic filing is the fastest way for a taxpayer to get their refund. With direct deposit, a refund goes directly into a taxpayer’s bank account. There’s no reason to worry about a lost, stolen or undeliverable refund check. This is the same electronic transfer system now used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits. Nearly four out of five federal tax refunds are direct deposited.

Wisconsin Filers:

The Wisconsin Department of Revenue may not issue tax refunds before March 1, unless both employer and employee have filed all required returns and forms (W-2, 1099-Misc, etc).

Also, Wisconsin Department of Revenue will again be sending letters to random taxpayers for ID verification.  If you receive a request, you should timely take the quiz or provide necessary documents to confirm identity.  Failure to take the quiz or provide ID verification, will result in the Department of Revenue will denying the tax refund.  Fraud prevention by the Department of Revenue is expected to increase due to the Equifax and other recent data breaches.  Therefore, more individuals may receive the ID verification.

To be eligible for the Homestead Credit for tax year 2017, those under age 62 and not disabled must have earned income to claim this credit.  Earned income includes wages, salaries, tips, other employee compensation, and net earnings from self-employment. For those without earned income, either the taxpayer or spouse must be 62 or older or taxpayer must be disabled. If you are disabled, proof of disability must be submitted with the tax return.  This can be in the form of statement from VA, SSA, or Physician.

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