When Should I File My Taxes? Your Guide to the Ideal Filing Time
Filing taxes is confusing enough. Take one variable out by figuring out your best time to file.
Contributing Writer at Tally
March 1, 2022
When the tax season approaches, many questions arise about filing taxes. But many tax filers have one important question: "When should I file my taxes?"
A good blanket-answer is anytime before the tax filing deadline that year. However, this is not a one-size-fits-all answer, as nuances in peoples' tax and financial situations can impact the ideal filing date.
We’ll explore the various tax and financial situations — so you can determine when it’s the right time for you to file taxes — and we’ll review the different ways you can file.
When should I file my taxes?
After receiving all your tax documents, you can file your federal tax return anytime up to the filing deadline that year. In 2022, the tax deadline is April 18. Keep in mind the government will sometimes move the tax filing deadline in extenuating circumstances, such as the tax extension given in 2021 due to the COVID-19 pandemic.
When you file your taxes can vary based on your goals in that tax year. Here are some common scenarios and the date you should file your taxes to make the most of them.
You want to just avoid a late fee
If you just want to avoid the fee for filing your taxes late, simply plan to file by the deadline. In 2022, this is April 18.
If you file after the due date, you'll incur a 5% failure-to-file fee for every month that passes. The maximum failure-to-file penalty you can incur is 25%. Once your taxes are 60 days late, you'll get hit with a fee equal to 100% of your unpaid taxes or $210, whichever is lower.
On top of the failure-to-file fee, you'll also get hit with a 0.5% failure-to-pay penalty for every month — or partial month — your taxes go unpaid. This penalty maxes out at 25%.
You want to protect your personal information and tax return
Identity theft is a big issue, and criminals are now stealing tax info in an attempt to snag your refund check. If you have concerns this could happen to you, your best bet is to file your tax refund as soon as you receive all your W-2s, 1099s, and other tax documents.
If you file your taxes first and get your tax refund check on the way, criminals can't swoop in and steal it from you.
You want your refund quickly
If you want your , file your income taxes as soon as you receive all your tax documents. You can put some serious hustle on it by filing online. If you mail your return to the IRS, it can take six to eight weeks for the IRS to process your return. However, with e-file, the IRS should issue your return in three weeks.
You can speed it up even further by opting for direct deposit instead of a paper check, which saves you the mailing time, making it the fastest way to get your money.
How can I file my taxes?
There are a few ways you can file your taxes, and each has its pros and cons. Here are a few popular ways to file your taxes.
Using a tax preparer
Those who've never filed taxes, don't have the time to file taxes or are just not comfortable filing their own taxes may prefer a tax preparer.
When tax season rolls around, there's no shortage of ads for these services from companies like H&R Block, Liberty, Amscot and Jackson Hewitt. Many smaller local companies offer these services too.
Pros of using a tax preparer
When using a tax preparer for your tax filing, you get a few distinct benefits, including:
Experience: Tax preparers are trained in the ins and outs of tax laws and generally have tons of experience in filing taxes. This ensures you get it right the first time.
Bigger tax refund: If you use a tax preparer, you can rest assured you're getting the maximum tax refund — or are paying the least amount in federal income taxes — because they know all the , such as the child tax credit, earned income tax credit, student loan interest deduction and . To maximize your refund, they can also help you determine the right filing status: married filing jointly, married filing separately, single or head of household.
Faster refunds: Some tax preparers offer you a loan based on the estimated refund you're due. This means you'll get your refund amount immediately, minus a fee for the loan.
Cons of using a tax preparer
While there are plenty of good reasons to use a tax preparer, there are some downsides to using one too, including:
Cost: Tax preparers usually cost $146 to $457 to prepare and file your taxes. The precise amount depends on the complexity of your taxes and the preparer's fee structure.
Time: Some tax preparers can become overwhelmed with the number of customers, leading to long wait times to get an appointment. This could delay your filing while you wait your turn.
Using IRS Free File
The Internal Revenue Service (IRS) offers Free File, the ability to complete your tax return online and file it for free if your adjusted gross income (AGI) is $73,000 or less.
The IRS partners with tax preparation companies to complete the paperwork and filing. The tax preparation company will provide guidance through the process, but the taxpayer completes the income tax return on their own.
Pros of IRS Free File
There are plenty of pros to using IRS Free File, including:
Flexibility: Whether you're an individual taxpayer, a small business owner or self-employed, you can use the IRS Free File. The only caveat is the limit on AGI.
Totally free: With no cost to you, this is the most economical choice for filing your taxes with some support from tax professionals.
Speed: Free File includes free e-filing of your taxes too, so you'll get your tax refund as quickly as possible.
Scheduling: Since you're filing your own taxes, you can complete this process on your schedule. No need to set an appointment with a busy tax professional.
Cons of IRS Free File
A few downsides exist for IRS Free File, including:
Income limitations: While the income restrictions will work for many American taxpayers, plenty won't qualify. And those on the cusp of qualifying likely won't know if their AGI will fall below this until after completing the paperwork, as your AGI is determined during the filing process. So you could complete all your paperwork and learn you don't qualify.
Limited assistance: While Free File includes guidance, there is no live help for trickier tax situations. It could increase your audit risk if you enter something incorrectly.
Limited providers: You must choose from the IRS' limited number of tax preparation partners. Some have even tighter income restrictions — the lowest is TaxSlayer at an AGI of $39,000 or less.
Using commercial tax software
Another option is to use commercially available tax software. Some options include TaxAct, TurboTax and even H&R Block. Tax software prices vary greatly, from free (thanks to the Free File option on some) to roughly $200.
Some of this software only offers guidance, but others offer the ability to get live help for an extra cost. Plus, some offer an audit protection option that helps you through the audit process if the IRS chooses to take a deeper look into your taxes.
Pros of commercial tax software
Commercial tax software has many pros, including:
Many options: There are so many tax software options to pick from, it’s likely one of them will fit your needs
Free options: Some offer the Free File option if your AGI meets the required level.
Live help: Some software also offers live help from a tax professional for an additional fee. This gives you the ability to make sure your taxes are done right the first time.
Loads of other options: Tax software generally has many other options to pick from, including audit protection, identity theft protection, fast-refund loans and more. This makes them highly customizable to your needs.
Scheduling: You can do the filing on your schedule instead of aligning with a tax professional's busy calendar during the tax filing season.
Cons of commercial tax software
The upsides make commercial tax software seem like a perfect option, but you must consider a few downsides, including:
Cost: Tax software can cost as much as $200, which can put a big dent in your refund amount.
Too many options: Having a range of commercial software options to choose from is great, but because there are so many, some filers may struggle to find the best one for them.
Unnecessary features: Many tax software options have a wide range of features to cover all tax situations, driving up the base price. You may not need these features, but you'll have to pay for them in the base price nonetheless.
Generalized guidance: Some tax software offers live, personalized help, but not all. Many offer only generalized assistance that may not cater to those with more complex tax situations.
Using a paper return
Yes, you can still file a paper return. Simply complete the tax forms, which you can download from IRS.gov, sign your return and mail it to the IRS. Remember, it must be postmarked by the tax deadline.
This is a good option for people with years of experience filing their taxes who aren't comfortable with filing digitally.
Pros of filing a paper return
There aren't many pros to filing a paper return, but there are a few, including:
Secured from hackers: If you’re worried about hackers tapping into your computer and stealing your data from your tax return, a paper return is a good solution. With no digital connection, there's no fear of hackers getting your info.
Minimal computer use: This is your best option if you're not computer savvy. The only thing you need a computer for is downloading and printing the forms. If you want to completely skip all computer use, you can often find the forms you need at the post office, local libraries, grocery stores and other places in your community. You can also call and order them at 1-800-829-3676.
Cons of filing a paper return
There are plenty of reasons not to file a paper return, including:
Security issues: While you're limiting your exposure to hackers by using a paper tax form, you're opening yourself to identity theft in other ways. Your tax return forms have your Social Security number, address, employer information and so many other details someone can use to steal your identity. And you’re going to toss that into your mailbox where anyone can get their hands on it. Plus, these thieves are on high alert during tax season and are looking for tax forms.
Time-consuming: These forms can take hours to fill out by hand.
Errors: Because you're filling everything out and doing the math manually, the risk for errors is significantly higher on a paper return.
Mail issues: The United States Postal Service (USPS) is pretty good but not perfect. Things get lost in the mail, including tax returns, and you'd have no idea until the IRS sends you a letter informing you of your .
When you should file depends on your situation
In general, you want to file your taxes anytime before the tax deadline. However, a more detailed look shows taxpayers’ goals may impact the ideal tax-filing time.
These goals include avoiding the late fee, protecting your personal information and tax return from thieves or getting your tax refund as quickly as possible. Depending on which of these goals fit your situation best, your ideal filing time can range from the moment you receive your tax documents to right before the deadline.
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