I suppose, provided you believe all the Federal uncertainty is bogus, there is no cause for alarm. I intend to file ASAP and I’ve already begun my preparations in earnest. You surely are seeing, in the media, counsel which says “file early as you can”.
I’ve gotten corrected 1099s + W2s on more then one occasion months after filing my tax returns. Missed one of the corrections once and caused me to be notified by the IRS 2 years or so later, paid interest/penalty. I’ve filed extensions since just so I don’t have to deal with corrections.
Additionally by filing ASAP, you are giving the IRS extra time to audit your return.
Unless you are hard up and needing the refund ASAP or you have some sort of anxiety issue, I see no reason to rush. It isn’t like you won’t get what you are owed whether you do it now or 6 months (extension is simple to request) from now.
That is because the industry doesn’t like everyone waiting so close to the April 15 deadline. They want the work spread out so they encourage people to do it as early as possible so they aren’t inundated working non-stop March/Apirl. People in the tax profession have always encouraged everyone to do as early as possible for this reason, this year isn’t unique.
I believe the industry does not like folks to wait until time is short, though what they do customarily is simply to file for an extension for their clients who show up too near to the April fifteenth deadline…
But the reason for early filing this year being advanced by the media is different than that and is twofold.
New forms and and schedules
Possibility of yet another government shutdown.
Question for tax pros, nothing to do with tax law or form changes.
I made the mistake of including the security deposit in rental income last year. Apparently I wasn’t supposed to do that if I intended to return it. This year I returned the deposit, but I can’t decide how to report this. Should I (1) correct last year’s return or (2a) subtract it from rents received on line 1 (Schedule E), or (2b) add it as “other expenses” on line 19 on this year’s return? Probably important to note that either way it will not have any effect on taxes owed in either year (an unallowed loss carryover would be attributed to a different year, with the same end result).
The correct way would be to amend last year’s return.
The simple way is to reduce rents collected this year. Say, you actually kept the security deposit, and just discounted the rent this year. Even if audited, no one is going to care about the technicality of what was claimed each year as long as it’s all accounted for in total.
I am assuming this is a typical residential deposit, not some skyscraper office building with a 6-figure deposit. That might change the context a bit…
Makes sense. The mistake happens to be immaterial in my case, so if there’s no extra tax due, there should be no penalty. TY.
Persons anticipating one will find hopeful information here concerning your tax refund from the IRS:
Another tax pro here. I agree with @glitch99. 1 is the correct thing to do. 2a is what most people would do and you could justify it with a little word play.
A significant percentage of the influential tax practitioners (from large or mid size accounting firms) are generally very busy doing other things in the months leading up to April, such as financial statement audits, partnership work, etc. Most are pretty busy, and wouldn’t necessarily want to prep individual returns in the middle of February.
I do think there are a lot of practitioners who only prep individual/ small corp returns who do like that, but my impression is that they aren’t as worried about trying to be influential, but I could certainly be wrong about that.
I would imagine though that companies like Turbotax are greatly in favor of spreading out filings, due to server load, Q1 sales, etc. And those companies are probably more influential than any other company in the tax prep world, I just don’t think it’s about practitioner work load.
I get the “idea” from the work I’ve done, talking to my friends at numerous accounting firms, and listening to talks from attorneys comparing working at accounting firms to working at law firms.
I have no idea what things were like a while ago, but today all of the big 4, and rsm (and I would imagine most other mid size firms) have the tax groups doing the tax provisions on the financial statements.
Former public accountant for a local firm here. I agree with @jcohen73. It is indeed the industry that always tells people to file sooner rather than later because most people that have taxes complicated enough to pay someone to do it aren’t in a rush. Accountants are always busy in April. Whatever comes in too late can be extended. They will almost always prefer to get tax work as early as possible.
This is more of a curiosity than anything. But TD Bank quickly sent a corrected 1099 - that was blank. The total dollar amount I received was under $600 so no 1099 was required, but I would’ve thought that if submitting/correcting one anyways they’d use the correct amount. I guess that’s why it is blank rather than “$0”, so as to not represent that no payments were made.
I’d imagine this means they don’t plan on sending the 1099 to the IRS at all.
Glad to hear you preface your anecdote with this. I take it to mean that you will still be putting down your TD Bank interest income on your taxes. That’s what I would do in your situation (not just because I am a tax professional).
Yes. A 1099 is a reconciliation tool to ensure accurate numbers are used and that bigger payments aren’t forgotten about, not the basis for what should and shouldn’t be included as income.
I actually have a rather substantial number listed on the “misc other income” line, despite virtually none of it being reported on any 1099. It’s one reason I continue to do my own taxes by hand; multiple so-called “professionals” (including tax preparers and tax software reps) have been unable to grasp why I’d ask how to include such payments on my return/in their software.
Ugh, makes me sad to hear this. We’re not all sneaky, dishonest shysters (even though several of my clients wish I was).
Heck, when I used to do manufactured spend, I would report the proceeds from that. Everyone claims it isn’t taxable, but when I looked into a legal basis for that position myself, I couldn’t see how that makes sense.
Yeah, I apologize for connecting you to that. A six week (which I think is actually 6 days total) “prep” course that mostly teaches you how to use some software shouldn’t qualify you as a “professional”, yet that’s what most people think when getting their taxes done.
But my comment was mostly about the over-reliance on 1099s rather than, you know, the actual money received.
It was ruled that rebates aren’t taxable. That’s how it makes sense–even if the math doesn’t add up. You paid taxes on things that legally aren’t taxable.