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DQOTD: Whatís The Downside of Filing Tax Return Early (Now)?
Old 01-30-2023, 03:52 PM   #1
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DQOTD: Whatís The Downside of Filing Tax Return Early (Now)?

I’ve never had all my ducks in a row this early but I do this year. I have all my documentation, everything checks out as expected in TurboTax, and there are no Federal or State forms marked DO NOT FILE in TurboTax - as there would be if anything was considered not IRS final. I’m pleasantly surprised. [edit: We’re due a very small refund Fed & State, or I wouldn’t be asking]

I did not have any Venmo or PayPal transactions, so I don’t need to wait for any 1099-K’s.

Why the hurry? Just to take our return out of the running for IRS refund scammers. I have an IP PIN, hopefully that’ll help also.

What am I missing?
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Old 01-30-2023, 03:54 PM   #2
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No downside, unless you owe and want to pay them vs. keep earning interest.

When I was getting refunds and doing simple W2 only filing, I'd be doing it now.
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Old 01-30-2023, 03:58 PM   #3
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The possibility of having a revised 1099 issued for a brokerage account is the reason I wait a little while. Saves having to file an ammended return. I've only had it happen once and the difference was incidental, but it still could have triggered a mismatch in the IRS system.
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Old 01-30-2023, 04:08 PM   #4
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No downside, unless you owe and want to pay them vs. keep earning interest.

When I was getting refunds and doing simple W2 only filing, I'd be doing it now.
If you file electronically you can schedule the payment for a later date, so no downside at all.

Though, like m3bs, I usually wait until March, just in case a 1099 gets revised.
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Old 01-30-2023, 04:10 PM   #5
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No downside, unless you owe and want to pay them vs. keep earning interest.

When I was getting refunds and doing simple W2 only filing, I'd be doing it now.
You can file now and pay later.

I schedule my payments via EFTPS to pay close to the 4/15 deadline even though I will have filed way earlier.

This year I expect to apply any refund to next yearís taxes.
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Old 01-30-2023, 04:17 PM   #6
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Corrections from the brokerage accounts is my reason for not filing early.

They are rare but in the past, they seem to appear 48 hours after I press the send button.
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Old 01-30-2023, 04:49 PM   #7
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I never seem to be able to file early. Vanguard says to expect my 1099 after Feb 17. So I have no choice but to wait.
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Old 01-30-2023, 05:01 PM   #8
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I never seem to be able to file early. Vanguard says to expect my 1099 after Feb 17. So I have no choice but to wait.
I have never received all my 1099s before late Feb. Not a big deal.
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Old 01-30-2023, 05:13 PM   #9
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if we owe we file on or about April 1st. if we're getting a refund we file 1-2 weeks after the return is final....just in case.
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Old 01-30-2023, 05:47 PM   #10
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Yeah, corrections. I get a lot of them.
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Old 01-30-2023, 06:29 PM   #11
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I filed already and my small refund is supposed to be in my account Wednesday. Earliest I've ever filed. Mine was super simple this year with only interest/dividends on MMF's along with DW W2. No chance of anything being revised since the 1099's tied to what they should have been.
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Old 01-30-2023, 06:34 PM   #12
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Yeah, corrections. I get a lot of them.
One year I had a 1099 corrected three times. I wait now.
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Old 01-30-2023, 07:15 PM   #13
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I often see people applying their refund to next year. What's the reasoning for that? Is it to avoid the refund counting as income this year?
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Old 01-30-2023, 07:26 PM   #14
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I often see people applying their refund to next year. What's the reasoning for that? Is it to avoid the refund counting as income this year?
Canít speak for everyone, but I roll my refund forward because I know I am always under withheld. So Iím going to have to either make estimated payments or do a large IRA withdrawal and have the majority of it withheld so Iíll be okay by year end. I was close this year and will roll forward around $400. Not worth doing anything else with but rolling it forward.
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Old 01-30-2023, 07:34 PM   #15
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I often see people applying their refund to next year. What's the reasoning for that? Is it to avoid the refund counting as income this year?
No, the refund is never counted as income. The interest on a delayed refund counts as income but not the refund itself.

On April 15 I have to pay my first estimated tax installment for the new tax year. I don’t have enough time to get a tax refund and then turn around apply it to the next year’s estimated taxes, so it’s far more convenient to apply the refund directly.

If you have tax withholding from a paycheck rather than pay estimated taxes it probably doesn’t make sense.

I try to not overpay as I prefer to owe some taxes every year, but occasionally my taxable income drops more than expected like it did last year.
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Old 01-30-2023, 07:51 PM   #16
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I often see people applying their refund to next year. What's the reasoning for that? Is it to avoid the refund counting as income this year?
It's to pay less estimated taxes next year.
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Old 01-30-2023, 09:44 PM   #17
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OP - since you have a PIN, it's pretty difficult for a scammer to file a return for you.

So no rush.
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Old 01-30-2023, 09:59 PM   #18
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I think the IRS started doing the basic checks a few years ago and cut down on refund fraud considerably.
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Old 01-31-2023, 04:19 AM   #19
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I think the IRS started doing the basic checks a few years ago and cut down on refund fraud considerably.
Yes.

Stop the rush, unless you love 1040X.
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Old 01-31-2023, 07:02 AM   #20
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On the other hand, if you're sure you have all your 1099s in (compare to last year's batch, and think about any new accounts you might have opened for CDs, etc), and you've never received a corrected 1099, file and get that task out of the way. Especially if you have a refund coming. That revised 1099 can come after April 15 so you've got no guarantee that waiting 2 months will help.

1040X isn't fun but it's not something you need to avoid at all costs.
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