Usually tax accountants hear some common questions at the beginning of each year such as ‘when will the tax season begin?’, ‘how early can I file my taxes?’, ‘when can I file my taxes for the previous year?’, ‘when can I claim on my taxes?’, ‘when is the earliest I can file my taxes?’, ‘how soon can I file my tax return?’ or ‘will I receive my refunds earlier if I file taxes earlier?’. Anyone can file taxes as soon as they receive relevant information and required documents for it by the Internal Revenue Service (IRS).
Those who still worry and have a question ‘how early can I file my taxes’ then the IRS has officially announced the tax filing season for 2016. The tax season for electronically and paper filed returns will be opened and begin from Tuesday, January 19, 2016. Do you remember what was the tax filing date, last year? It was one day earlier in the last year, January 20, 2015.
This time the IRS is expecting to receive 150 million individual tax returns in 2016. You can only prepare and file your taxes for 2015 until Monday, April 18, 2016 instead of the traditional date, April 15. The IRS has requested all the tax payers to have their year end statements and Form W-2 from employers and Forms 1099 from banks and Form 1095-A from the marketplace, for claiming their premium tax credit.
We must file taxes because they are one of the most important parts in order to run a country. Most of the people are aware about the duty to pay taxes but aren’t happy about it. Paying taxes feels more like a burden to them. For this reason, some people want to save themselves from the tax bills and make sure not to give their money to the state each year. On the contrary, there are some people who always have one question in mind ‘how early can I file my taxes’. They just worry to file their taxes at the earliest.
If you are also one of those who have a question ‘how early can I file my taxes?’, then here is all that you need to know about filing taxes earlier.
What is Tax Filing?
When we talk about filing of taxes then we are referring to income tax returns as they are one of the most common types of taxes filed. When you ask yourself, ‘how early can I file my taxes’ then you should remember that there are a number of income tax returns. All the types of income tax returns have a different purpose. For this reason, you need to understand how every IRS tax form is used to file taxes and which is the right form to prevent you from costs.
Forms are really confusing; you may not know the difference between a W-2 and W-4 or a 1040 and a 1099. But you should not feel ashamed or embarrassed about it, because you are not alone. Almost everyone is unaware and needs to know the difference. Prior to filing taxes, you need to choose a specific form and for that you must know the difference. Here are some of the most common types of tax return forms.
- Form 1040: This form is for the US individuals for income tax returns.
- Form 1040EZ: This form is mostly used by married or single individuals with no dependents.
- Form NR: This form is for the income tax return of the non residents of the US.
- Form 1040NR-EZ: This form is for certain US non resident aliens with no dependents.
- Form 1040A: This form allows you to claim more credits such as education credits, retirement savings contributions, child tax credit and many more.
- Form W-2: This form known as Wage and Tax Statement and is for salaried employees.
- Form W-4: This is the Employee’s Withholding Allowance Certificate which is filed prior to starting employment.
- Form W-4P: This is the Withholding Certificate for Pension or Annuity Payments to determine the correct amount of deferral income tax.
- Form 1099-MISC: This form is for freelance or contact workers who receive at least $600 during the tax year.
- Form 1098: This form is also known as Mortgage Interest Statement and is for homeowners who pay mortgage who receive at least $600 mortgage during the year.
- Form 941: This is the Employee’s Quarterly Federal Tax Return for the employers who withheld income taxes from Social Security and Medicare tax from the employees.
- Form 8962: This form calculates the amount of credit you receive.
Prior to filing taxes, you must take guidance from your lawyer, tax preparer or any credible certified public accountant regarding the filing of tax form. They will guide you to fill the appropriate form which can help you best in saving costs. After choosing a few of these forms, your tax preparer can file your taxes seamlessly.
How Early Can I File My Taxes? – Don’t Hurry – Make Sure About Two Important Elements
In this section, you will learn the core of how early can I file my taxes, question. You can file for taxes as soon as you receive all the relevant documents and information required for the preparation of accurate tax return. As per the IRS, the tax returns for the year, 2015 will begin on Tuesday, January 19, 2015 and the deadline is on Monday, April 18, 2016. The IRS will only accept the electronically filed tax returns and paper returns when the IRS officially announces the opening day.
If you still want to file your taxes early, then here are two things you should bear in mind.
· Accurate Returns
In order to file your taxes, you will require an accurate return for which you will need documentation. This means you will be asked for Form W-2, Form 1099, your information about the rental income or business. Also, you will be required to show data for your deductions.
But, the documentation is sent to the tax payers usually by the end of the January. If you will not have your documentation, then you will not be able to file an accurate return. For this reason, it is always best to wait in order to make sure that your tax return is complete and accurate.
· Don’t Rely on e-Filing for Tax Returns
Those who are proactive and want to file their earlier then you need to wait for the arrival of your W-2 forms. You must not rely on the tax preparer who is in a chance to e-file your tax return with the help of your last pay stub instead of your Form W-2. If you find such a tax preparer then do not consider them as this is against the rules and violating the rules can trouble you as well as your tax refunds.
The IRS in warns the individuals in FS-2014-11 to beware of such tax preparers. You must choose the tax preparers wisely. The reason for choosing the Form W-2 is that the information found on the form cannot be found on the last pay stub in this year.
Those who worry about how early can I file my taxes must keep in view that filing early is not the smart strategy. Though, one of the best strategies is to find the right time to file the taxes. If you want to know the right time for filing your taxes, then you need to look upon to your personal situation. You must neither procrastinate nor let the process slow down; instead you should file for your taxes as soon as you receive Form W-2 and find yourself financially stable.
What Will Happen If You File Your Taxes Earlier? – The IRS Will Not Process Returns or Refunds Before the Opening Day
Those who are thinking ‘how early can I file my taxes’, a plus point for filing their taxes early is that they can get tax refunds faster. The tax payers are often found confused despite the announcement from the Internal Revenue Service regarding the late start to tax season. Those who want to file their taxes earlier then, some of the tax preparers are accepting tax returns prior tax filing season officially opens. But you must keep in mind that filing taxes earlier won’t help you in getting refunds or returns faster.
If you submit your information early to your tax preparer then they will hold your tax returns until the IRS systems officially opens for processing. As per the IRS website, there is no advantage to filing on paper before the opening date. But still if you want to file your taxes early, you need to have full tax information.
The information may include common and most used forms, Form W-2, Form 1099, and Form 1098. Without these forms, your tax preparer will not be able to prepare and file your taxes. But you must remember that you have to wait as the process will only be proceeded further until the IRS officially open the tax filing procedure. Though, there is no harm and it is always better to prepare for filing of the taxes in advance.
Filing Taxes Early For Faster Tax Refunds or Returns
Often individuals are looking forward to opportunities to file their taxes as early as possible. Once you have received Form W-2 from your employer and Form 1099 from your investments then you will possibly have an acceptance of your refunds or returns by the IRS as soon as possible, in the month of January, 2016. But in such a situation, it is not necessary that you will get the refunds or returns early. Those who have a question, ‘how early can I file my taxes’, can see to how filing early can hurt them as well as how it can help them.
Here is How Filing Taxes Early Can Help You
Out of people who want to file taxes early, there are many others who want to put off filing their tax returns until April. Often people wait until the last minute and procrastinate with the deadline. Though, this should not be done. There are many reasons to why you should file your taxes early. If you are also one of those who think filing taxes early can help you and a question, how early can I file my taxes pops in your head, then read on.
· Reason # 1: Faster Refunds
Those who have overpaid their taxes and expect a refund then you must file earlier. You will probably get a refund soon. But this may not happen with everyone.
· Reason # 2: Get Over With Tax Filing
Doing things in advance can give you a lot of peace of mind at the last minute and throughout. So, don’t spend your first three months of the year with nagging thoughts until Monday, April 18, 2016. Wondering how early can I file my taxes? Try to get over with the tax filing now and avoid procrastination. You will also be able to look over other areas of life.
· Reason # 3: Avoid Paper Filing, Go for Electronic Filing
According to the IRS in 2010, around 70% of the tax payers filed their returns electronically which means that the remaining 30% are mailing their taxes and also joining the crowds outside the post office. If you are also planning to go outside the post office and file your taxes through paper then you will waste your time until Monday, April 18, 2016. You must consider filing your taxes electronically which will not only save your time in fact, it will also save your money and investments too.
· Reason # 4: Avoid Possibility of Being Late
You must have understood the answer of the question how early can I file my taxes. If you have time now to prepare for your taxes then do it now. You never know what time may bring to you until Monday, April 18, 2016. If you prepare for it you taxes late, then you will likely end up wasting your money paying for interest and huge penalties. Also, you may forget entering your Social Security Number or make an error in the calculation at the last minute. So, why do you want to risk your tax filing procedure, instead of being in a rush, you can file them beforehand and save your costs.
· Reason # 5: Stay Away from High Interest Loans
If you have bills to pay and expecting a refund then getting your taxes filed earlier can really help you in saving your money and investments. You can maintain a track of your finances by being proactive and preparing for your taxes in advance.
Those who worry about the question, how early can I file my taxes, then they should keep in mind that the people who are expecting a refund and have simple tax returns should only consider filing their taxes early. This is because mostly the taxpayers have seen more negative results from filing early.
Here is How Filing Taxes Early Can Hurt You
The ones, who question to how early can I file my taxes, must remember that the reason to delay in filing taxes is not only procrastination, yet there are some more reasons to wait for the filing of taxes.
· Reason # 1: Maximize Your Interest
When you owe money to the IRS then there is no reason to pay them soon when you have to pay them the same amount later also. You can complete the return early and turn it in. In addition to this, you can also keep the amount safe and secure for interest bearing account which can make you earn a few bucks for yourself.
· Reason # 2: Try to Avoid Altering Your Return
This is one of the most important concerns for the ones who have a question in mind, ‘how early can I file my taxes.’ It may happen that your employers, institutes, universities, mortgages or investment companies can make mistakes on the tax forms they file for the wages, mortgage interest, tuition costs, investment income to the tax authority, the IRS. You will have to file your taxes again, if you file your return on the basis of the incorrect information.
The new form will be mailed to you by the IRS. This is a time consuming process. Not only this, but you may likely owe more to the IRS with this new information. You must keep a strict eye on the tax forms. Consequently, when you file early, make sure that you get a refund and spend it right away otherwise you may not have the money to pay your tax liability if it changes suddenly.
· Reason # 3: Unavailability of Current Tax Forms on Filing in December
How early can I file my taxes? Keeping this question in consideration, your legislations passed at the end of the year may not be reflected in tax forms on filing taxes early. In case you use tax software, then you will not be permitted to finalize your return unless it has all the forms for the current year which applies to your situation.
If you are thinking to print the forms from the IRS website, then you must make sure that the forms you will require are for the tax year for which you are filing. But please remember, if the form is available for filing that also doesn’t mean that the updates are complete. Moreover, if the authorities enact a new law, then there can an expected update before Monday, April 18, 2016.
So if you are wondering to ‘how early I can file my taxes’ then pay attention to the reports of tax law amendments on the news. You can view and visit all the details to correct the tax forms on www.irs.gov.
Bottom Line – How Early Can I File My Taxes?
Those who are still thinking for the answer of the question ‘how early can I find my taxes’, then they must examine the pros and cons of filing the taxes early. You can relate them to your personal tax filing situation. You can also take guidance from your lawyers or any certified public accountant in this regard.
Though, if you think that filing early can put some money in your pockets sooner, then you can go for it, but as per other advocates, it is a sensible decision to wait. Also, some of the people believe that one of the best times to file your taxes is when you are financially stable and you receive relevant information for tax filing i.e. tax forms.