On a similar note...
On a similar note...
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Many things in life come down to timing, and tax returns are no exception. Wait too long, and you could miss the filing deadline, setting you up for interest charges or even penalties. It’s always a good idea to file by the tax deadline, but you might be able to save money, beat crime or realize other advantages if you file during other parts of tax season. It all depends on your objective.
Objective: Do it as cheaply as possible
BEST TIME TO FILE: TYPICALLY, BEFORE MARCH 15
The market for tax software is competitive, and providers often change their prices throughout the year. In normal tax-filing years, prices tend to go up during the 30 days before the typical April deadline, and not just for federal returns. Fees to file state returns may rise as well when demand peaks.
If you’re going to hire a human tax preparer, get on that person’s calendar early, or it could cost you more as well.
Objective: Avoid late penalties
BEST TIME TO FILE: BY THE APRIL 15 DEADLINE
If your tax return arrives after the April filing deadline, the IRS could hit you with a late-filing penalty of as much as 5% of the amount due for every month or partial month your return is late (up to a maximum of 25%). You can get an extension, but you have to do that by the April deadline, too.
Avoid the mistake of thinking that getting an extension means you get more time to pay. Drag your feet past the April deadline, and you may owe interest, plus the IRS could also assess a late-payment penalty, which normally costs 0.5% of the outstanding tax each month, to a maximum of 25%.
Objective: Fend off criminals
BEST TIME TO FILE: AS SOON AS YOU HAVE ALL YOUR PAPERWORK
Tax identity theft is still a big problem. It generally starts by accessing someone’s personal information, then filing a fake tax return under the person’s name to pocket the tax refund. If you file before a criminal does, there’s no refund to steal — in theory, at least.
Keep criminals’ grubby hands off your refund check by filing your tax return as soon as you have your W-2 form and other paperwork. That could mean doing your taxes in February or even earlier. The IRS typically begins accepting tax returns in mid-January, and employers usually send out W-2s by the end of that month.
Objective: Get your refund ASAP
BEST TIME TO FILE: ANY TIME — BUT DO IT ELECTRONICALLY
If you want your refund right away, don’t mail a paper return. Refunds from old-school paper returns can take six to eight weeks to process. Filing your return electronically (“e-filing”) lets the IRS hit the gas on your refund. The refund is issued within 21 days in most cases.
Don’t wait for a paper refund check to wend its way through the U.S. Postal Service, either. If you want your refund as soon as possible, choose direct deposit so the money goes right into your bank account.
Start tracking your tax refund here. The IRS will notify you when it gets your return, when it approves your return and when your money is on the way.