What Is Considered Early Tax Filing?
JD
Summary:
Although many taxpayers file their returns near the mid-April deadline, you can file much sooner, and there are good reasons to do so. How early can you file your yearly return? It varies from year to year, but usually, the earliest you can file is mid-to-late January when the IRS begins accepting returns. While you wait, you can start preparing your taxes so you can be sure they are correct when the tax filing season opens.
There are many benefits to filing a tax return early. If you file early and you are due a refund, you can get it sooner. And if you owe the Internal Revenue Service (IRS) taxes, you do not have to pay the balance due until the filing deadline. Filing early helps you to know much you will owe and gives you extra time to arrange payment. You can also reduce the risk of losing your refund due to identity theft when you file early. So just how early can you file your taxes?
In 2022, the IRS began accepting returns on January 24, and in other years past, the tax season has started as early as mid-January. Most people know that the official tax filing deadline is April 15 (or a little later if that date falls on a weekend). But the opening date varies each year, and the IRS does not announce what it will be until early January. Here are some more details about early tax filing.
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When is the earliest you can file your tax return?
You can prepare your return as soon as you have the relevant forms and required tax information. But to file your return, you have to wait until the IRS officially starts the tax season. Usually, in early January each year, the IRS issues a statement outlining the first day you can file your taxes. Typically the tax season opens in mid-to-late January and ends in mid-April.
When will the IRS start processing electronic returns?
The earliest date you can electronically file your taxes is the same as the tax season opening date. If you use e-file, you can check the status of your return starting 24 hours after you file.
What are the benefits of early tax filing?
If you have until April to file your taxes, why file early? There are some pretty good reasons.
Get a faster refund
If you have money coming to you, there’s no reason to let the government keep it longer than necessary. The IRS is not as busy early in the tax season compared to April and puts the money in your hands sooner. You can use the IRS Where’s My Refund? page to check the status of your refund.
Avoid the tax season rush
Filing early gives you time to understand fully any changes to tax laws and avoids potential mistakes that come from rushing. If you make mistakes due to filing last minute, this often triggers audits and can lead to penalties or interest owed. (Also see SuperMoney’s Ultimate Guide to IRS Tax Audits.)
If you use a tax preparer, it’s likely they won’t be as busy in January or February compared to April. Early access means they will have more time to consider your tax situation closely and help you with your return. It’s also possible that you could be charged less for tax preparation during the slower months.
Avoid potential identity theft
By filing early you give yourself peace of mind. Filing sooner means less opportunity for someone to file in your name illegally in an effort to take your refund. Identity theft can lead to all sorts of complications. If the thief claims erroneous deductions, falsely reports income, or otherwise taints a tax return in your name, it could take months or even years to clean up.
Unfortunately, there is no good way to know you were a victim of identity theft until the IRS notifies you that there was a possible issue with your return. Be on the lookout for potential tax-related identity theft if:
- The IRS won’t let you e-file your tax return because someone has already filed with your Social Security number.
- You get an IRS notice that an online account has been created in your name when you didn’t make one.
- You get an IRS notice that your online account has been accessed or disabled when you hadn’t done so.
- You get an IRS notice that you owe additional tax or refund offset, or that you’ve had collection actions initiated for a year that you didn’t file a tax return.
- IRS records indicate you received wages or other income from an employer you didn’t work for.
- The IRS sends you an inquiry about a tax return that you didn’t file.
- You received a tax transcript in the mail, although you didn’t request one.
- You were assigned an Employer Identification Number (EIN) without requesting one.
If you suspect your Social Security number has been compromised and you wonder if you are now a victim of tax-related identity theft, contact the IRS immediately. If an e-filed return was rejected due to a duplicate filing with your Social Security number, complete the IRS Form 14039, Identity Theft Affidavit. You can also visit IdentityTheft.gov for steps to take to protect yourself moving forward.
Steps to prepare your taxes before the season opens
Even before the tax season officially opens, there are some steps you can take to prepare your paperwork. Preparing now can help ensure you file an accurate return and avoid processing delays that slow your tax refund.
1. Create an online account via the IRS website
Use the online account feature of the IRS website to securely access the latest information about your federal tax account. It will also allow you to see information from recently filed tax returns.
The website allows you to:
- View taxes owed, your payments, and payment plans
- Make payments to your tax account and apply for payment plans
- Access some of your historical tax records
- Electronically sign Power of Attorney authorizations sent from your tax professional
- Manage communication preferences from the IRS to avoid fraud.
2. Gather and organize this year’s tax records
Having organized tax records helps prepare a complete and accurate tax return. You are less likely to have errors that lead to processing delays which will slow your refund. It can also help you to find otherwise overlooked deductions or credits. You can also use this time to notify the IRS if your address changed and notify the Social Security Administration of a legal name change.
Prepare the following records:
- Collect all income documents and records. Don’t forget documentation of digital asset transactions.
- Gather any IRS or other agency letters from the fiscal year.
- Find your IP PIN if you opted-in to receive one, received a CP01A Notice, or e-filed your taxes in the past.
- Get Forms W-2 from your employer (or employers). All employers must provide a W-2 no later than January 31. Here’s what to do if you didn’t receive one.
- Make sure you have all Forms 1099 from banks, including Form 1099-INT if you were paid interest, pension, annuity, or retirement plan distributions, and even unemployment compensation money.
- If you worked a gig job collect Form 1099-K, 1099-MISC, or other income statements.
- If you enrolled in the Health Insurance Marketplace, make sure you have Form 1095-A, and reconcile Premium Tax Credits for Marketplace coverage.
Pro Tip
Don’t file your return without your IP PIN if you were assigned one by the IRS. If you try to e-file without your assigned IP PIN, your return will be rejected and you won’t be able to e-file. If you send in a paper return because you don’t know your IP PIN, there will be additional screenings which will delay any refund due.
3. Make sure your Tax Identification Number (ITIN) is up to date
If you have an ITIN, check to be sure it’s valid. Although not the end of the world, you can avoid unnecessary delays by renewing an expired (or expiring) ITIN. If you’ve already requested renewal, don’t fret and send another renewal request. The IRS will notify you once your ITIN is assigned or if they need any additional information.
Pro Tip
Here are some quick ways to know if your ITIN has expired. If your ITIN wasn’t included on a U.S. federal tax return in 2019, 2020, or 2021, your ITIN will expire on December 31, 2022. Also, any ITINs with middle digits from 70 up to 88 have expired, and any ITINs assigned before 2013 that have middle digits from 90 up to 99 have expired.
4. Make sure you’ve withheld enough money to pay your taxes
Credit amounts may change each year, so you can take this time to visit IRS.gov to use the Interactive Tax Assistant or Tax Withholding Estimator. The tax assistant will help you identify which tax credits you qualify for. The withholding estimator can help you plan for any withholding adjustments. Getting married or divorced, having a child, or getting a second job can all mean a change to withholding. This can mean a change to your expected refund (or payments) when filing. If an adjustment is required, you will need to submit a new Form W-4 to your employer.
5. Set up direct deposit to speed up your tax refund
The fastest way to get your refund is by filing electronically and choosing direct deposit. Direct deposit will give you access to your refund faster than a paper check will. It also avoids the possibility that a refund check could be lost, stolen, or returned to the IRS as undeliverable. All that’s required is your bank routing number and account number.
Pro Tip
Don’t have a bank account? Some prepaid debit cards and mobile money apps allow direct deposit of tax refunds. Just make sure to have your routing and account numbers included on your tax return. Check with the app provider or financial institution to confirm what numbers to use.
Get help preparing your return
Most experts would agree that it’s best to start preparing your tax return as early as possible. Even if you can’t file yet, there is much you can do to start the process. By following the tips in this article you can get a faster refund, avoid potential identity theft, beat the tax season rush, and make sure your return is accurate and complete. If you need help, find a tax preparation service to walk you through the process.
FAQ
Should you e-file your taxes?
E-filing is often better than sending in a paper return for several reasons.
- It’s accurate and easy. E-file software does the math to help taxpayers avoid mistakes and uses a question-and-answer format to make doing taxes easier.
- Security. E-file uses sophisticated encryption technology to protect tax returns. The safeguards in place make tax filing with e-file a safe and secure option.
- Convenience. You don’t have to leave the house to e-file. You can use commercial tax software to e-file right from your home computer.
- Faster refunds. When you file electronically, there are no processing or mailing delays, and usually, the return is virtually mistake-free. When combined with direct deposit, electronic filing is the fastest way to get a tax refund.
- It’s usually free. Many taxpayers can now e-file for free using the IRS Free File assistant. Free File is only available on the IRS.gov website. Some taxpayers may also qualify to have taxes e-filed for free through an IRS volunteer program.
- Many payment options. You can e-file early and set up an automatic payment plan until the April deadline. There are also other options available at IRS.gov/payments.
What is the deadline for filing a tax return?
Typically, individual income tax returns are due around mid-April. For the 2022 tax season, for example, most tax returns must be filed by April 15, 2023.
If you’re not able to file before the deadline, you can e-file an extension for free to give you until October 15 to file your taxes. Make sure to file the extension request before the due date of your return. If you cannot pay what you owe, you can also request an additional 60-120 days to pay your account in full by using the Online Payment Agreement application. This request is separate from the filing extension request.
When should I get my tax refund in 2023?
Although the IRS issues most refunds in less than 21 days after a return is filed, there are many factors that can affect the timing of your refund. The IRS warns not to rely on receiving a refund by a certain date, especially if you plan to use your refund to pay for major purchases or bills.
Here are four common reasons why a return can be delayed:
- Identity theft or refund fraud is involved.
- The refund includes the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) which does not get refunded before mid-February. The law requires the IRS to hold the entire refund — even the portion not associated with EITC or ACTC.
- The return requires manual review.
- The return was filed via mail and was subjected to mail carrier logistic delays and internal IRS limitations.
Key takeaways
- Even though the due date is not until mid-April, taxpayers can submit their taxes as soon as the IRS opens the tax season, which is sometimes as early as mid-January.
- Submit your tax return earlier to get applicable tax refunds sooner.
- Don’t put your taxes off until the last minute to avoid mistakes that could lead to an audit or penalties.
- Tax preparers may give you better rates if you file your taxes early.
- Preparing early gives you time to estimate capital gains, gather tax losses, make year-end charitable deductions, and at times shift certain deductibles to the most advantageous tax year.
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