Did you know that most people file their taxes last minute in the U.S.?
Approximately one in seven filers wait until the last week that taxes are due. This equates to over 20 million Americans!
There’s nothing technically wrong with filing your taxes late. After all, the most important thing is to get your taxes in by the deadline: April 15th.
Doing so can help you avoid paying fees and interest on your tax balance.
However, getting your taxes in early can be beneficial, especially for your peace of mind.
If you’re wondering, “When can I start doing my taxes?” keep reading. In this post, we discuss everything you need to know to prepare your taxes early.
When Can I Start Doing My Taxes?
Nobody really loves tax season, even if plenty of filers receive a nice refund at the end of it. Doing your taxes takes time and effort.
This is why many taxpayers hire accountants or use e-filing software to make the process faster and easier.
Nonetheless, the sooner you get your taxes done, the better! Early filing can give you that tax refund early.
Early filing may even enable some discounts if you use e-filing software.
It can also be wise for people who have a lot of tax information to input, particularly people with investments. Visit this website to learn more.
Tax season officially begins in January, the first month after the prior tax year. Each year, the start date varies.
For example, this year, due to the government shutdown, the IRS officially launched tax season on January 28, 2019. In 2018, tax season began on January 29th.
If you don’t know when tax season starts, check the IRS website. You can do this in early January to get a sense of a starting date.
Tax season officially ends in mid-April. This year, taxpayers have until April 15, 2019 to submit returns.
Keep in mind that you can start preparing your tax returns as early as January 1st. You simply cannot submit returns to the IRS until the end of January.
How to Prepare Your Taxes Early
If you’re keen to be one of the first filers in the nation, keep these tips in mind. Remember: once you submit a return, you can’t make any changes!
1. Start Preparing in Early January
You cannot officially submit your tax returns to the IRS until January 28, 2019.
However, this doesn’t mean that you shouldn’t be thinking about taxes in early January.
In fact, you can start getting things ready as early as January 1st. This gives you at least three weeks to tackle all of the other points on this list.
Doing so will enable a quick and easy submission by the start of February–and, in most cases, a faster refund!
True early birds may want to start preparing their taxes at the end of December. Keep in mind, however, that every tax return must report all income and expenses of the prior year, including those final days of December.
2. Contact Your Employers
Employers are required to send out all tax forms by the end of January, often January 31st.
This means that you may not be able to submit your returns until you receive these important documents.
Don’t worry, though.
Contact your employers in early January to see when they anticipate sending out tax documents. You may be able to receive an electronic version of these sooner, especially if you are an independent contractor.
If you must file your taxes before February 1st–as some self-employed individuals have to do–it’s particularly important to contact employers ahead of time.
3. Know What Documents You Need
Speaking of tax documents, which ones will you need when preparing your taxes?
Your most important tax forms will concern all sources of income that you receive in a given year.
If you are not self-employed, you will likely receive a W-2 from your employer. Self-employed individuals can anticipate receiving a 1099 form of some kind from employers.
If you’ve made income from other sources, such as gambling, investment properties, and business transactions, you will also need this information.
Interest earned on savings accounts is also taxed: your bank will send you a tax document accordingly.
If you’ve paid interest on student loans or mortgages, you can expect to receive tax forms from these lenders.
Keep these documents in a safe place if you have already received them!
4. Gather Relevant Receipts
You can deduct plenty of expenses when filing your tax return. Some of these include business expenses, including home offices, meals with clients, and business materials.
You may also be able to deduct certain medical expenses.
Educators can qualify for tax credits if they have spent their own money on teaching supplies and materials. If you’ve made charitable donations, these are also tax-deductible.
Gather all relevant receipts for these deductible expenses and keep them in one place for reference as you file.
5. Choose Your Filing Method
Do you prefer to e-file, work with an accountant, or submit a paper tax return? Choose your filing method now so you can start preparing early.
Keep in mind that paper returns often have a high error rate. We recommend e-filing for a cost-effective and easy way to submit your returns!
Also, think about whether or not an itemized or standard deduction is right for you. Itemized deductions enable you to get credit for every dollar you’ve tracked.
Standard deductions, on the other hand, will be applied based on your filing status.
6. Research Eligible Deductions
Get a head start on your deductions by knowing what you qualify for. Visit the IRS website to learn more about eligible deductions for individuals.
E-filing software like TurboTax can also check for deductions for you as you file.
Big life changes, like buying a house or getting married, can change your filing status. Learn more about that here, too.
7. Check Things Twice
This is the most important step when filing your taxes early. Make sure you haven’t overlooked any income source or tax document.
Consider having an accountant look things over before you submit to prevent penalties or a lower refund.
Preparing your taxes early is a smart move. It can help you get your refund faster. What’s more, it can give you the breathing room you need to file with confidence.
You asked, “When can I start doing my taxes?” and we answered!
But what other tax tips do you need to know? Visit this post here to learn more.