When is the Best Time to File Taxes?
The best time to file your taxes depends somewhat on your personal situation and whether you anticipate getting a tax refund or having to pay the IRS. It is always best to spend time each January as your tax forms arrive in your mailbox, and come up with a strategy for filing each year. Interestingly, your audit risk does not change based on when you file, so you really should tailor this to your individual needs.
Some compelling reasons to file your taxes early are:
1. You are getting a refund: Keep in mind that getting a tax refund actually means that you have overpaid the government throughout the year on your taxes. This is your money and you may as well put it back in your bank account as soon as possible so that you (not the IRS) can collect the interest. Do not file too early though…you do not want to file before all of your tax documents have been received. Early February is generally the earliest feasible time for submitting your taxes.
2. If you are asking the IRS to apply your refund to an IRA or your health savings account. This is a great option for your refund but you will want to file early so that you are eligible.
3. If filing your taxes causes you stress: For many people, tax time is very stressful. Getting your taxes filed early limits the stress and anxiety of the season. You do not have to worry for months whether you will be receiving a refund or paying this year if you file early.
Reasons to file by the mid-April deadline
1. If you owe this year, there is no reason to pay the government before April 15th. Let that money sit in your bank account and accrue interest for you during that time.
2. You want to file by April for financial aid purposes. If a member of your family will be attending college.
3. You will also want to file by the normal tax deadline if you are looking to refinance your mortgage.
Note: A request for extension must be filed by the mid-April deadline using form 4868. Reasons to request an extension and file by mid-October
1. October 15th is usually the very last day to file your taxes (if you have received an extension) before you begin accruing late fees and penalties. This is your last chance to file your taxes “on time”, so it is absolutely in your best interest to do so if you have not already.
2. Extenuating Circumstances: If you have a family emergency, family illness or any other personal need, it may be wise to take the extra time to file your tax return, provided you have requested an extension.
3. Missing documentation: If you are tracking down missing information that is pertinent to your tax return, take the extra time to get the information pulled together. This will help you in the long run keep your audit risk lower by submitting your return with all required information.
Still have questions?
If you are still not sure when the best time for you to file is, consider enlisting the help of a tax firm. You can often receive very good advice from a trusted source and even find additional ways to increase your return or owe less to the IRS. Success Tax Relief has been helping customers prepare and file taxes for more than thirty years and has extensive experience dealing directly with the IRS when needed.
If you have questions about your tax return or would like a free consultation, give us a call today at 1-877-958-6638.