The Best Time to File Your Tax Return

Income Taxes, Personal Taxes, Taxes
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Best Time to File Your Tax Return

Many things in life come down to timing, and tax returns are no exception. Wait too long, for example, and you could miss the tax-filing deadline, setting you up for interest charges and even penalties. It’s always a good idea to file by the April 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.

Minimize filing costs

Best time to file: before March 15

The market for tax software is competitive, and providers often change their prices throughout the year. Prices tend to go up during the 30 days before the April deadline, and not just for the software. Fees to file state returns may rise as well when demand peaks.

» MORE: Compare the best tax software

If you’re going to hire a human tax preparer, get on that person’s calendar early, or it could cost you. The average fee to expedite a return is $85, according to the National Society of Accountants.

Also, you might be able to get free tax software, especially if your tax situation isn’t very complicated or you have less than $64,000 of adjusted gross income. See if your favorite tax software provider offers a free version, and check out the IRS’ FreeFile site.

Avoid late-filing penalties

Best time to file: by the annual April deadline

If your tax return is MIA after the April filing deadline, the IRS could hit you with a late-filing penalty of 5% of the amount due for every month or partial month your return is late. You can get an extension, but you have to do that by the April deadline, too.

Avoid the common mistake of thinking that getting an extension means you don’t have to pay your tax bill in April. Drag your feet and you’ll owe interest, plus the IRS could also assess a late-payment penalty, which normally costs 0.5% of the outstanding tax per month, to a maximum of 25%.

Keep criminals away from your refund

Best time to file: The minute you have all your paperwork

Tax-identity theft is a big problem. In the first 11 months of 2015 alone, the IRS rejected or suspended processing 4.8 million suspicious returns. Refund theft generally starts by accessing someone’s personal information and then filing a fake tax return under the person’s name to pocket the refund. (Click here to learn what to do if your refund is stolen.) 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.

» MORE: Try NerdWallet’s federal income tax calculator

Get a fast refund

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 most of the time. And don’t wait for a paper refund check to wend its way through the postal service, either. If you want your refund as soon as possible, also choose direct deposit so the money goes right into your bank account.

Taxpayers can check the status of their refunds at IRS.gov/refunds. There, the IRS will notify you when it gets your return, when it approves your return and when your money is on the way. 

Tina Orem is a staff writer at NerdWallet, a personal finance website. Email: torem@nerdwallet.com.

Updated Feb. 1, 2017.