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
-
Is the EV Tax Credit Going Away? What You Need to KnowTax Credits There's a lot of chatter about the President-elect's plans to eliminate the electric vehicle tax credit. Here's what's happening.
-
Being Nimble Is Key to This Fidelity Bond Fund's OutperformanceThe Fidelity Total Bond ETF has done well over the long term as managers adjust to changing tides.
-
FSA Contribution Limits Are Higher for 2025FSA A flexible spending account allows you to build tax-free savings for certain medical expenses.
-
Florida Tax Deadline Extension: What You Need to KnowTax Relief The IRS extended federal tax return file time due to severe storms.
-
IRS: Here’s How to Recover Your Tax Records After a Natural DisasterTax Records Your tax documents can help you get federal relief faster, the IRS says.
-
Voters Approve New Veteran Property Tax ReliefTax Relief Thanks to the election, some Veterans will soon see expanded property tax exemptions.
-
Nevada Approves Diaper Tax Relief Amid Childcare CrisisTax Relief Nevada voters have expanded sales tax relief to diapers. But are prices still too high?
-
Earned Income Tax Credit (EITC) 2024: How Much Will You Get?Tax Credits The refundable amount for workers with or without children is slightly higher this year. Here’s what you need to know.
-
Two Consequential Tax Cases You May Not Have Heard AboutThe Supreme Court's decisions in these cases create uncertainty about challenging IRS regulations and guidance. Expect more litigation to follow.
-
IRS Expands Tax Breaks for Breast Cancer Screenings, ContraceptivesHealthcare Now you can get a tax deduction or reimbursement for certain medical expenses, like over-the-counter birth control and condoms.
