It’s that time of year again: tax season has officially arrived, with the Internal Revenue Service (IRS) opening its electronic filing system for early filers on January 16th, 2024.
This year, however, there’s a twist – the IRS has kicked off its “hub testing” phase two weeks ahead of the official January 29th processing date. What does this mean for taxpayers, and should you rush to file your return early?
What is IRS Hub Testing?
Think of hub testing as the dress rehearsal for tax season. During this period, the IRS processes a limited number of electronically filed returns to ensure their systems are running smoothly and identify potential glitches.
It’s essentially a stress test for the backend tax processing systems before the full onslaught of millions of returns begins.
Why Start Early This Year?
The IRS hasn’t officially stated their reasoning for the earlier hub testing, but some speculate it could be due to several factors:
- Increased complexity of tax code: With recent changes like the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) having specific processing timeframes, testing in advance helps prevent delays.
- Cybersecurity concerns: Early testing allows the IRS to identify and address vulnerabilities in their systems before they can be exploited by malicious actors.
- Improving taxpayer experience: A smoother test phase could translate to faster processing times and fewer glitches for everyone during the official filing season.
Should You File Early?
While the IRS is accepting returns during hub testing, it’s not necessarily recommended for everyone. If you have a simple return with no complex forms or credits, filing early could get you a faster refund. However, if your return is more complex, it might be best to wait until after the official January 29th start date. Here are some things to consider:
- Missing forms or information: If you’re waiting for a final W-2 or other necessary document, waiting until later avoids the headache of filing an incomplete return and needing to amend it later.
- New tax laws or credits: If you’re unsure about how new tax laws or credits affect your return, giving yourself more time to research and consult with a tax professional can prevent errors.
- Potential technical issues: While the IRS strives for a smooth rollout, early testing periods can sometimes experience technical hiccups. Waiting until the official start date minimizes the risk of encountering these issues.
Ultimately, the decision of whether or not to file early depends on your individual circumstances and risk tolerance. If you’re comfortable with the potential downsides, filing early could get you your refund sooner. However, for most taxpayers, waiting until after January 29th might be the safer and more prudent option.
Stay Informed and Stay Safe
No matter when you choose to file, remember to stay informed about the latest updates from the IRS. You can track the progress of your return using the “Where’s My Refund?” tool and be wary of scams and phishing attempts during tax season.
By being prepared and vigilant, you can navigate tax season smoothly and securely.