What Happens If You File Taxes Early?
Understand the implications and advantages of submitting your tax return ahead of schedule for a more streamlined tax season.
Filing taxes early offers several advantages, from potentially receiving a refund sooner to gaining peace of mind. Many individuals file well before the April deadline to avoid last-minute stress and manage finances effectively. Understanding the process helps ensure a smooth and efficient filing experience.
Key Preparations Before Filing Early
Before submitting your tax return, gather all necessary financial documents. This includes Forms W-2, which report wages, salaries, and taxes withheld from employers. If you are an independent contractor or receive income from other sources, you will also need various Forms 1099. These forms are typically sent out by payers in January or February.
Beyond income reporting, ensure you have documentation for any deductions or credits you plan to claim. This might include records for mortgage interest (Form 1098), student loan interest (Form 1098-E), health savings account contributions, and charitable donations. Verifying your personal information, including Social Security numbers for all individuals listed on the return, is also important to prevent processing delays. Having all documentation complete and accurate before filing is important.
Expedited Processing and Certainty
Submitting your tax return early often leads to quicker refund processing. For those expecting a refund, filing early means the IRS can process your return and issue your money sooner. This can be beneficial for financial planning or addressing immediate needs.
Filing early also provides a psychological benefit by completing the task well in advance, reducing last-minute stress. It offers certainty regarding your tax obligations, allowing you to confirm your tax liability or refund amount and plan accordingly for the rest of the year. This proactive approach helps avoid the rush and potential errors from hurried filing.
Handling Missing Information or Errors
Despite careful preparation, new or corrected information may emerge after you have already filed your tax return. For instance, an employer might issue a corrected Wage and Tax Statement (Form W-2c) if there was an error on your original W-2. Similarly, corrected Forms 1099 might be issued by financial institutions or other payers. If you receive such a corrected form or discover an error on your filed return, you will need to file an amended return.
To correct a previously filed Form 1040, individuals use Form 1040-X. This form allows you to update incorrect income, deductions, credits, or filing status. Form 1040-X requires you to detail the changes and provide an explanation for the amendment. While electronic filing for Form 1040-X is becoming more available, it is a separate process from the original filing and may take additional time for the IRS to process, often between 8 to 16 weeks.
What to Expect After Submission
Once your tax return has been submitted, the IRS begins processing it. For most taxpayers who e-file and choose direct deposit, refunds are issued within 21 days. This timeframe is faster than receiving a paper check, which can take several weeks.
Taxpayers can monitor the status of their refund using the IRS “Where’s My Refund?” tool, available on the IRS website or through the IRS2Go mobile app. This tool updates once every 24 hours and requires your Social Security number, filing status, and the exact refund amount shown on your return. The tool tracks your refund through stages such as “Return Received,” “Refund Approved,” and “Refund Sent.” The IRS may send correspondence for verification or clarification, which could extend the processing time.