Filing your taxes long before the tax deadline may not be your top priority, but if you're self-employed or anticipating a refund, there are some benefits you may want to know about. Watch this video to find out more about fling your tax returns early.
UPDATE: The Treasury recently announced tax changes and updates in response to COVID-19. Updates include an extension until July 15, 2020 for all taxpayers that have a filing or payment deadline that normally falls on or after April 1, 2020 and before July 1, 2020. Please see the latest information on tax deadlines and stimulus updates related to COVID-19 on the TurboTax Coronavirus Tax Center and detailed information about federal and state tax changes on our Coronavirus blog post.
Hello, I’m Tammy from TurboTax with important news on the benefits of filing your taxes early.
Filing your taxes long before the tax deadline may not be your top priority, but if you’re self-employed or anticipating a refund, there are some benefits you may want to know about.
If you are expecting a tax refund because your employer withheld more tax from your salary than you owe the IRS, or your total estimated tax payments exceed your tax liability, filing your taxes early will get your refund processed much faster than if you file in April (July 15 is the deadline in 2020). You need to remember that as the tax filing deadline approaches, IRS staff become increasingly busy—which means the time it takes to process your tax return also increases. Therefore, by filing your tax return in January, for example, it’s possible that the IRS will need less time to process your refund than it does for taxpayers who file closer to the deadline.
To speed things up even more, you should consider efiling your early tax return instead of mailing a paper copy. Most efiled refunds are issued within 21 days.
Keep in mind that you cannot file your return until you receive all W-2s from your employers, as well as the other forms you need such as a 1099 form. Luckily, the IRS requires your employer and other information return filers to provide you with copies by January 31, though in many cases, the forms are made available to you earlier. But as soon as you have enough information to prepare your return, there’s no reason to delay its filing.
Filing a tax return early is also beneficial to self-employed taxpayers. When working for yourself, it’s your responsibility to make up to four estimated tax payments throughout the year as you earn the income. The fourth of these estimated tax payments is due on January 15—approximately two weeks after the close of the tax year. In addition, you still must file a personal income tax return that includes all self-employment income by April 15th (July 15 in 2020). However, the IRS allows you to make that fourth and final estimated tax payment with your tax return instead, but only if you file it by January 31.
And lastly, a benefit that all taxpayers enjoy when filing early is preparing a tax return without the stress of a looming deadline.
When you decide to fill out your tax return, TurboTax is ready. We can even e-file your return so you can get your tax refund as fast as possible.
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