The holidays are done. Family has gone home. Christmas decorations have been taken down. It’s finally time to relax. Right?
Nope. It’s officially time to start thinking about taxes! Yay!
I’m completely kidding about being excited of course. Taxes are notoriously hated by just about everyone simply because they are a pain. I’m just saying, no one aside from accountants and CPAs like tax season. And they only like it because of the money it brings in, definitely not because of the hours they get to spend at the office.
With that said, let’s begin our dive into taxes with the first basic question we’re all itching to ask! When can I file my taxes? As in, when can I get this annoying event over with?
The quick answer: You can file as soon as you have all of your tax information. Your deadline is typically April 15th unless you file an extension.
Basic Tax Season Dates
I realize that not everyone is like me when it comes to filing taxes. I’m the crazy person that has to file taxes as soon as possible. I just don’t like the requirement hanging over my head. It is the one thing that I don’t procrastinate with. (Oh if only I could treat everything else in my life with such priority.)
Unfortunately, taxes are not something that can be done on January 1st while nursing a hangover with biscuits, gravy, and an eighth cup of coffee.
You need to wait for company-mailed forms like your employer’s W-2 or 1099 (if you are an independent contractor). A bank’s 1099-Int, a brokerage company’s 1099-R, 1099-B or 1099-Div. Maybe you sold real estate and the proceeds are taxable. That’s a 1099-S.
There are forms pertaining to health insurance and health savings accounts, mortgage or loan interest, previous taxes paid forms, charitable donation summaries that you may need. Lots of forms – I think you get the idea.
And you get to sit and wait for them before you can start any of your tax return.
Pro Tip: Wait and gather up all of your tax forms before starting your taxes. Do not go onto a tax software service and fill in the information as you receive it. It will get confusing. You will screw up. It will only drive you to pour your heart out to your neighborhood bartender. I know from experience.
Is there a one date deadline for when all of these different companies and corporations have to have their tax documents mailed out to you? Of course not. That would make the process easy!
As an example, your company/employer has to mail out your W-2 by January 31st of each year. Many 1099’s have deadlines that hit somewhere in the middle of February.
(Actual dates subject to change on an annual basis. Check out IRS.gov’s Publication 509 Tax Calendars for more information or for a cure for insomnia.)
On top of that, the IRS doesn’t even start processing returns until the end of January. So even if you could file your return that first week of January, the IRS wouldn’t get around to looking at it until a few weeks later anyway.
Now, is there a one date deadline by which we all need to have our tax returns filed? You bet! That date is April 15th. (Unless the 15th falls on a weekend or a holiday, then it is normally the next business day.)
Another Pro Tip: If you wait until April to start working on your taxes, be prepared for long hold times, long wait times, or for your accountant to tell you to file for an extension.
I started my career in a call center at a financial company. The first two weeks of April are filled with people scrambling to get answers to tax questions and I know from personal experience that the people who answer the phone get very tired very quickly.
Please don’t add to their call volumes.
Can’t get your taxes done by mid-April? Good news, the IRS allows extensions. And you can file one if you so choose. A tax filing extension will push that April 15th date out until October 15th. Giving you a nice six months of additional procrastination. (Four months if you are “out of the country” – as defined on IRS Form 4868.)
To get an extension, you will need to file, you guessed it, Form 4868 by the regular tax deadline. The IRS tends to grant extensions with no questions asked. Why? Interest of course.
Interest on Taxes Owed
Let’s say that you owe taxes when you file your tax return. Bummer. But you can still file an extension if you want to. Just make sure you pay the amount you think you owe by the regular tax deadline in April.
If you owe any taxes after that April deadline, the IRS will charge you interest on however much you haven’t paid, no exceptions. So make sure you don’t owe any additional taxes when you file an extension.
It’s a silly waste of money. Don’t give the government any more of your hard-earned money than you have to.
Why Someone Might File an Extension (And Why You Might Not Want To)
Some main reasons that someone might want to file an extension are pretty simple and straightforward. Companies, corporations, employers make mistakes. Many will let you know as soon as they do that a corrected form will be coming your way, but you’ll end up having to wait extra long.
This leads to certain situations that easily warrant an extension, such as:
- You’re on vacation – typically a cop-out excuse, but I would never cancel a vacation because my work screwed up a few numbers on my W-2. Extension filed.
- You have to push back your appointment with your accountant/CPA – Accountants and CPAs are very busy during tax season. If you find out that you aren’t going to have all the necessary information you need when you are scheduled to meet with your accountant then you should probably reschedule. And they probably aren’t going to have an opening until after that April deadline. Extension filed.
- You know you are getting a refund and you just flat out don’t want to worry about your taxes until later in the year. Maybe you have a big project going on at work. Maybe you’re planning your buddy’s bachelor party. Who knows.
Whatever your reasoning, be careful. While these are a perfectly fine and valid reasons to file an extension, keep in mind that if you file an extension, you may be giving up interest to the government if you are due a return. That’s right, if you know you are getting a return but you don’t file until October, you are allowing the government to earn interest on that cash that should be going into your pocket.
For example: say you were due back $5,000. You could get your return and deposit it into a savings account earning 2% interest. $5,000 at 2% for six months is $50 (minus taxes…see how they get you?). No, that’s not a ton, but it’s a free night out.
Now think if you invested that $5,000. Say you could earn 12% in XYZ ETF (not meant to be a real ETF, this is just a basic example). $5,000 at 12% for six months is $300. That’s not bad.
Did I miss any good reasons? Let me know if you have a reason to file an extension that I missed. I’m always curious about these things.
So When Can I File My Taxes
The more complex answer: anytime in between when you have all of your tax documents and October 15th – give or take a day depending on the year.
Typically, you want to be done by April 15th. But you can file an extension until October 15th if you wish. And you can file as early as January. Just don’t be in such a hurry that you miss a tax document and have to amend your taxes. That’s a pain – I know from experience.
And if you do decide to file an extension, make sure you pay what you owe in taxes by April 15th. Don’t pay extra interest to the government. They take enough as it is.