How Early Can You Receive Your Tax Refund This Year?

The Internal Revenue Service announced today that the 2014 tax filing season will open on January 31st, 2014. The IRS further recommends taxpayers use e-file or Free File as the fastest way to receive tax refunds. The IRS pushed back the opening date of tax season from January 21st to January 31st following delays caused by the government shutdown back in October. Every year the IRS must update its systems, applications, and databases to reflect tax law updates, business process changes, and programming fixes. The 16-day long government closure came during the IRS’s peak season for performing these updates and changes. Approximately 90 percent of IRS operations were closed during the shutdown, putting the IRS about three weeks behind schedule in order to be ready for the 2014 tax filing season. The extension of the opening date will allow the IRS the proper time to program, test, and deploy more than 50 systems that process the nearly 150 million tax returns annually. IRS Acting Commissioner Danny Werfel said about the new start date, “It’s a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation’s taxpayers.”Expecting a tax return this year? You can get a head start on your paperwork as many software companies are expected to begin accepting tax returns in January and holding them until the IRS systems open on January 31st. However, the IRS will not process any returns until January 31st so there is no advantage to filing on paper before the opening date. Again, e-file or Free File with the direct deposit option will be the fastest this year for receiving tax refunds. While the tax season opening date is later this year, the April 15th tax deadline is set by statute and will remain in place. For those wishing for more time, anyone can request an automatic six-month extension to file their tax return via the Form 4868.
Starting January 13th, business tax filers can file 2013 returns. Business returns include any return that posts on the IRS Business Master File (BMF.) These returns include a variety of income tax and information returns such as Form 1120 filed by corporations, Form 1120S filed by S corporations, Form 1065 filed by partnerships and Form 1041, the form filed by estates and trusts. Business returns also include various excise and payroll tax returns, such as Form 720, Form 940, Form 941, and Form 2290. The January 13th start date does not apply to unincorporated small businesses that report their income on Form 1040. The start date for all 1040 filers is January 31st, 2014.

The IRS expects to release more information on the upcoming tax season in January 2014. In addition, new year-end tax planning information has been added this week to IRS.gov.