When to file taxes depends on personal preferences and financial and tax situations

March 02, 2020 : Kathy Pickering

Filing taxes is no longer a once-a-year event on April 15. When do people file their taxes? With about three months to file during tax season, an additional six months for those who file an extension, and generally three years to file to claim a refund, people are filing taxes throughout the entire year. People tend to file around the same time each year based on their personal preferences and financial and tax situations. There can be benefits of filing taxes early, such as potentially getting your refund earlier and even lowering your risk for tax identity theft. Others can’t file early because they don’t have all the documents they need to file an accurate return. There may not be one right answer about when to file your taxes, but you should file when it’s right for you.

You may file early…

…to get a refund as soon as possible

While you will get the same size refund whenever you file during the tax season, getting that refund earlier can incentivize you to file as soon as possible, particularly if you depend on your refund to pay bills or other essentials. In our survey of earned income tax credit filers, 83% said their tax refund money is important to their household’s finances and 67% said it would be challenging to pay for essential living expenses if they did not receive their tax refund this year. However, the IRS is required to hold refunds claiming the earned income tax credit or the additional child tax credit until mid-February, and it could be early March before those filers get their refunds.

…to prevent tax identity theft

Some early filers aren’t necessarily motivated by their refund but want to get their tax return in to the IRS before criminals can file with their name and Social Security number (SSN) or individual tax identification number (ITIN). The IRS typically operates on a first-come, first-served basis, so once someone files using your SSN or ITIN, subsequent attempts to file with your number will be automatically declined, setting off a potentially months-long process for you to reclaim your tax identity, file a return, and receive your refund.

You may file later…

…because you’re waiting for documents

Not all late-season filers are procrastinators. While most information documents should arrive by the end of January, like an employee’s W-2 reporting wages, or a 1099-INT reporting bank interest, some information documents won’t arrive until March. If you own shares in an S corporation, you may not receive your K-1s until mid-March, leaving you with less than a month to prepare and file your return by the April deadline.

…because you’re less likely to get a refund

Not only does the size of individual refunds decrease as the filing season progresses, but refunds themselves become less common. 79% of early filers got a refund, while 64% of April filers got a refund, and only 55% of post-April filers got a refund. The average April refund of more than $2,300 was 17% lower than earlier refunds. Though less common, the silver lining for post-April filers is that the average refund size spiked to more than $4,000 on average.

…because you think you have to pay when you file

Most people don’t know that you don’t have to pay your balance due at the same time that you file your taxes. If you think you have a balance due, you may wait until the last minute to file. Many people believe they must pay any taxes they owe when they file their return. But the truth is not that straightforward. As long as you’re not going to face post-April 15 penalties or interest, there’s usually no reason to pay a tax bill when you file before April 15. You can file in early January and send a check or schedule a payment for April 15 or whenever is comfortable for you.

In general, if you paid at least 90% of your 2019 tax bill or 100% of your 2018 tax liability during 2019, you won’t face late payment penalties or interest through April 15. If you paid less than that throughout the year, you could face an underpayment penalty even if you file and pay early in tax season. If you are subject to this penalty, it’s best to pay as early as you can to minimize this penalty.

If you have everything you need to file an accurate return, there’s no reason to wait. Find the way to file that’s right for you.

Related Resources

With tax extensions up, October tax deadline nears

Learn why the tax filing extension deadline in October is so important and why so many people filed an extension this year.

Kathy Pickering

Kathy Pickering

Chief Tax Officer

Kathy is the chief tax officer at H&R Block. With more than a decade of experience in tax operations and 25 years in information technology, Pickering is responsible for the strategic direction and management for a team of the nation's top experts on tax issues. Prior to joining H&R Block, Pickering worked with Sprint PCS, Olsten Health Services and various consulting firms where she focused on implementing accounting and financial systems, and leading Enterprise Resource Planning (ERP) software implementations, such as JD Edwards and PeopleSoft software.

Connect with us