For those expecting a hefty refund, answering the question of when to file taxes is simple: as soon as you receive the necessary paperwork, such as W2/1099, annual mortgage statement, etc. Meanwhile, those who anticipate a big bill might wait to file until the April 15 deadline. Determining when to prepare taxes is a personal choice, of course. However, there are some cases where earlier is best and others where last minute might actually be ideal.
The majority of taxpayers will benefit by filing taxes early. The most immediate benefit is a quick payback, since returns are issued on a first come-first serve basis. According to the National Society of Accountants (NSA), early filers from the past few years have received their funds in approximately 21 days. Alternatively, those filing closer to the deadline waited an average of 31 days. For those who owe, filing early can also be an advantage, since the payment date can be scheduled anytime on or before April 15, regardless of when you filed.
Most employers typically send tax forms well before the deadline. However, forms from short-term jobs and investment accounts may show up late. Not to mention, some brokers will send corrected 1099s out much later after receiving financial updates after the fact.
The medium with which you choose to file your taxes can also have an impact on the appropriate timing. E-filing will often speed up the process when you prepare taxes online, but that doesn't necessarily mean that filling out the forms will be lightning fast. If you plan to prepare taxes with software, make sure to read through all of the benefits offered in each package. For example, H&R Block offers a Premium software package that helps users maximize business deductions, calculate the deduction for charitable donations, and free, unlimited advice from a tax expert.