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E-filing before Jan. 31 opening day

By Kay Bell ·
Thursday, January 9, 2014
Posted: 3 pm ET

Most taxpayers get refunds every filing season. Last year, the average federal tax refund was $2,651.

That's a nice chunk of change, so it's no surprise that the millions of folks who expect money back from Uncle Sam tend to file in January.

It's also no surprise that this year these early filers are upset that they have to wait until Jan. 31 for the Internal Revenue Service to start processing tax returns. The delay is due to the federal government shutdown back in October, which slowed down the agency's updating of forms and testing of its computer systems.

Some taxpayers, however, aren't waiting. They are getting a head start on their tax return preparation so they'll be at the head of the line when the IRS does open its electronic filing doors on Jan. 31.

And popular tax preparation software and franchise tax offices are helping these filers.

E-filed returns being accepted, but held

TurboTax began accepting e-filed returns on Jan. 2.

"TurboTax will securely hold tax returns and submit them to the IRS starting Jan. 31 on a first-in, first-out basis," says Bob Meighan, CPA and vice president of Intuit TurboTax. "Last year, the average federal tax refund was almost $3,000. We know how important that money is to our customers. It's why we're encouraging people to file as soon as they can."

That's the same procedure at H&R Block, the country's largest tax preparation company.

"Consumers don't need to wait to prepare their returns. We will transmit it on their behalf," says Kathy Pickering, executive director of The Tax Institute at H&R Block. "This ensures the return is completed before the IRS opens."

Doesn't apply to paper

This file-and-hold system, however, works only for electronically filed returns.

In announcing the delayed 2014 filing season start, the IRS told taxpayers that "there is no advantage to filing on paper before the opening date."

And the IRS used that no-paper-returns-early plea to encourage e-filing, saying, "Taxpayers will receive their tax refunds much faster by using e-file or Free File with the direct deposit option."

Free File opening early

Now about Free File. This IRS partnership with the tax software community will be back in 2014.

And it will be back before the official Jan. 31 filing season starts.

Free File 2014 will start accepting customers on Jan. 17, two weeks before the season opens.

Starting that day, says the IRS, Free File companies will "securely hold your completed tax return until Jan. 31 when the IRS begins accepting returns."

This year, the option to prepare your taxes and e-file them at no cost at the Free File website (available as a link on the home page) is available to taxpayers with adjusted gross incomes of $58,000 or less. That earnings limit applies to all filing statuses.

So if you have all your necessary 2013 tax-filing material, you can go ahead and get it off your desk and your e-filed return into the IRS' holding pattern.

But remember, you won't get your refund any quicker. The IRS won't begin the actual processing of your 1040 form or those of others until Jan. 31.

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Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and co-author of the e-book "Future Millionaires' Guidebook."

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January 10, 2014 at 5:09 pm

To Haywood Jablowme. I thought I retired from the IRS. I hope I don't have to give back my pension that comes from OMB. I also get Social Security. Should I gave that back also?

Ellen McPhetres
January 10, 2014 at 4:56 pm

I filed my 2013 return last night and got that exact message. Anyone looking for financial aid for a college student needs to file as close to January 1 as possible.

Haywood Jablowme
January 10, 2014 at 4:00 pm

Kay, I beg to differ.

The Internal Revenue Service is not an agency of the United States government. It is true that not only can it NOT be found in Title 31, but it is nowhere to be found in the entirety of Title 5 U.S.C.

Congress THOUGHT it created it but it didn't. Just look at the 1100 manual and it tells you so. Congress only created the Commissioner's Office. He then hired the private collection agency people and used them as the tax collectors. In fact, I defy you to find any IRS employee listed as an Employee of the United States Government with a United States Employee Identification number that has been hired by any District Director in the country. Now I suggest you look at 27 Code of Federal Regulations Section 250.11 and therein you will find the definition of "Revenue agent." That definition reads "Any duly authorized Commonwealth Internal Revenue Agent of the Department of the Treasury of Puerto Rico."

January 10, 2014 at 3:32 pm

Frank, the 2013 tax tables are in the 1040 forms' instruction books. The 1040 instructions were finally posted to this week (1/8). The 1040A and 1040EZ forms and instructions were done by 12/31/13. So some folks with relatively uncomplicated filing needs could e-file as soon as they got all their necessary tax info (W-2s, 1099s, etc.).
I share your early-filing incredulity, though. More years than not, I'm an extended return filer!

January 10, 2014 at 3:21 pm

Haywood, actually the IRS is a federal agency. It's under the Treasury Department and gets its operating funds from Congressional authorizations/appropriations.

January 10, 2014 at 3:18 pm

I wonder how much the government will make by sitting on those returns for a month and not having to borrow to cover refunds? Of course, if they process incoming payments first and push refunds to the end of the line they might save even more..... Naw, the IRS surely isn't that devious, is it?

January 10, 2014 at 2:44 pm

Frank go online irs published already the 2013 tax table.

Haywood Jablowme
January 10, 2014 at 2:07 pm

Why would the IRS use the excuse of things being late because of the government shutdown? They should not have been closed at that time. The IRS is the collection division of the Federal Reserve Bank and is not a government agency. They are a company on there own. They are as Federal as Federal Express.

January 10, 2014 at 12:53 pm

How is it possible that anyone has already filed a tax return for 2013, paper or electronically? The IRS has not yet published the 2013 tax tables.

January 10, 2014 at 5:31 am

we need a fair tax