The 2024 tax season is underway, but taxpayers have until April 15 to file their federal income tax returns this year. Some people file as soon as the IRS begins accepting returns, and others wait until Tax Day. So, which is better? Should you wait to file taxes, or should you file them early?
The answer depends on your individual tax situation, but here’s what you should know before you file your 2023 tax return.
Is it better to wait to file taxes?
Some people might need to wait to file the federal income tax returns. For example, you won’t want to file without all the necessary documentation. If you’re missing essential tax documents, filing now could result in an inaccurate tax return. And inaccuracies could result in a delayed refund — or worse — an IRS audit. Here are some common tax forms you might need before you file.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
- Form W-2 if you were an employee
- Form 1099-NEC if you received payments as an independent contractor
- Form 1099-INT if you received interest income
- Form 1098 if you paid mortgage interest or student loan interest
It’s important to note that you are required to report all taxable income, even if you don’t receive year-end tax documents. For example, online sellers might not receive a 1099-K form this year, but that income must still be reported to the IRS.
Some taxpayers may need to gather additional documentation before filing their taxes. This is necessary for taxpayers who are deducting business expenses and for people who choose to itemize deductions. (Most people take the standard deduction).
Filing taxes later also gives you more time to make HSA and IRA contributions. You have until April 15 to make contributions to your 2023 health savings account (HSA) and individual retirement account (IRA).
So, if you haven’t reached the 2023 contribution limits, waiting to file might be a good idea. Making additional contributions could go a long way in lowering your tax bill or increasing your refund amount.
Should you wait to file taxes due to the 2024 child tax credit?
Congress is still negotiating a $78 billion tax deal, which could result in a newly expanded child tax credit. If enacted, the credit could impact tax refund amounts for some families. However, IRS Commissioner Danny Werfel recently told reporters that taxpayers should not wait for Congress to decide to file their returns. Instead, Werfel says, taxpayers should “file when they’re ready.”
What if the new child tax credit is enacted after filing? The IRS says eligible taxpayers won’t miss out on a bigger refund if Congress passes an expanded child tax credit that is retroactive to the 2023 tax year. According to Werfel, the IRS will make any necessary changes to your tax return and “will send you the update — whether it’s an additional refund or otherwise — without you having to take additional steps.”
File taxes early for a faster refund
The IRS issues most tax refunds within 21 days of acceptance. So, typically, the earlier you file, the sooner you will receive your tax refund. As long as you’re ready to file, there’s no reason to wait, even if you expect to benefit from potential tax changes being negotiated by lawmakers. Here are the fastest ways to receive your tax refund in 2024:
- File as soon as you’re ready
- File a complete and accurate return
- Choose to receive your refund via direct deposit
Filing early can benefit taxpayers who expect to owe taxes, too. Regardless of when you file, tax payments are due by April 15 this year. So, knowing how much you owe early in the season can give you more time to plan for the payment or to set up a payment plan with the IRS.
If you do choose to wait to file your tax return this year, just make sure you do so (or file for an extension) by the April 15 tax deadline. Otherwise, you could face a failure-to-file penalty.
Related Content
- Tax Season is Here: Big IRS Tax Changes to Know Before You File
- Families and Businesses Would Get Big Tax Breaks in Bipartisan Tax Deal
- New Deal on Child Tax Credits
-
Here's How Collectibles Are TaxedCollectibles Gains on collectibles can be subject to a higher rate than for most other investments.
-
Why Adobe Stock Is Down After Its Earnings BeatAdobe stock is lower Thursday despite the tech giant beating expectations for its fiscal 2024 fourth quarter. Here's what you need to know.
-
Retirement Abroad? Three Countries With No Inheritance TaxRetirement Taxes These 2025 top-retiree-friendly countries have an added benefit: potential tax savings for you and your heirs.
-
Five Tax-Savvy Ways To Donate This Holiday SeasonCharitable Donations Food pantries, toy drives, and animal sanctuaries are popular ways to support others year-round.
-
Tax Pros: Is Someone Fraudulently Filing Returns With Your PTIN?Tax Filing An unmonitored preparer tax identification number (PTIN) can lead to serious issues.
-
IRS Shakeup? What Trump's Commissioner Pick Could Mean for TaxesIRS An unconventional nominee comes amid broader efforts to reshape the IRS and tax policy in 2025.
-
IRS Could Lose Another $20 Billion in FundingIRS A mistake in legislative language could soon risk the tax agency's Inflation Reduction Act funding.
-
Are You a Renter? You Could Save on TaxesTax Breaks With these tax savings at your fingertips, rent may be more affordable
-
2025 Open Enrollment: Some DACA Recipients Can Purchase Affordable Care Act Health InsuranceOpen Enrollment Your eligibility to purchase health insurance from the federal marketplace may have changed. Here's what you need to know.
-
Holiday Office Party Taxes: Know Before You GoTax Tips The IRS could tax your gifts from Christmas raffles, Secret Santa, and White Elephant. Here’s how.
