Should I Wait to File My Taxes or File Early?

The annual tax season presents a common dilemma: whether to file a tax return as soon as possible or wait closer to the deadline. The best choice depends on a person’s specific financial situation and preparedness. Understanding the advantages of each approach is necessary for making an informed decision.

Reasons to File Your Taxes Early

One reason to file your taxes early is to receive your refund sooner. The Internal Revenue Service (IRS) processes returns on a first-come, first-served basis. Filing electronically with direct deposit can speed up this process, resulting in a refund within a few weeks, whereas waiting can lead to processing delays.

Filing early is also a defense against tax-related identity theft. This fraud occurs when a criminal uses your stolen Social Security number to file a fraudulent return and claim your refund. Since the IRS accepts only one return per Social Security number, filing your legitimate return as soon as you have all your documents prevents a thief from filing before you do.

Completing your tax return early can provide a psychological benefit. Tackling this task ahead of the deadline eliminates the stress that often accompanies procrastination. It provides clarity on your financial standing, whether you are expecting a refund or find that you owe the government, which allows for better financial planning.

Reasons to Wait to File Your Taxes

A reason to delay filing is to ensure you have all necessary tax documents. While employers must send Form W-2 by January 31, other forms often arrive later. Documents like Form 1099-NEC for freelance income, Form 1099-DIV for dividends, or Form 1099-B for brokerage transactions may not be sent until mid-February or later. A Schedule K-1 for partnership investments might not arrive until March, making it impossible to file an accurate return early.

Another reason for waiting is the possibility of receiving corrected tax forms, which is common for Form 1099-B from brokerage firms. Filing with inaccurate information would require filing an amended return, Form 1040-X. Waiting for final forms helps avoid this extra step.

Waiting to file can be a strategic move if you plan to contribute to certain tax-advantaged accounts for the previous year. You have until the tax filing deadline to make contributions to a traditional IRA or a Health Savings Account (HSA) and have them count toward the prior tax year. Delaying your filing gives you more time to fund these accounts, which can lower your taxable income.

If you anticipate owing taxes, there is no benefit to paying the IRS any earlier than necessary. You can still file your return early to finalize your obligation but schedule the electronic payment for the tax deadline. This allows you to hold onto your money longer, potentially earning interest in a savings account.

Understanding Key Tax Deadlines

For the 2024 tax year, the deadline for most individuals to file their federal income tax return is April 15, 2025. This date is also the deadline for paying any tax liability you may have. Failing to pay by this date can result in penalties and interest on the outstanding balance.

If you cannot file your return by the April deadline, you can request an automatic six-month extension. The deadline to submit this request is also April 15, 2025. This extension moves the due date for filing your tax return to October 15, 2025.

How to File for a Tax Extension

Filing for an extension grants an automatic six-month period to submit your return. The primary method is to file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.

You can submit Form 4868 electronically through IRS Free File, commercial tax preparation software, or a tax professional. Electronic methods are the fastest and provide confirmation that your request was received by the IRS.

An extension to file is not an extension to pay your taxes. You must estimate your tax liability and pay any amount you expect to owe with your extension request. Making a payment with your extension helps you avoid late-payment penalties and interest. You can make this payment electronically through IRS Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or by debit or credit card.