More Time, More Spending Power: What To Remember During Tax Season
There’s so much going on post-holidays and new years that we tend to forget what’s coming next. We understand—life happens! But there are three important finance dates that you need to mark on your calendar: January 27, January 31 and April 15.
And what holiday do they all have in common? Tax season.
An early filer is a happier filer. By gathering your items and filing on (or ideally before) the April 15 deadline, you can benefit and receive any tax refunds sooner to enjoy. And if you owe money on your taxes, sending in your payment ahead of the deadline can give you more peace of mind rather than leaving you scrambling at the last minute.
Track Down Your W-2 Forms
At the end of January, you will need to gather your W-2 forms, or wage statements, from your employer to prepare for filing. Those documents show how much you made last year, and how much money your company withheld on items like taxes and healthcare costs.
Keep organized and put each W-2 (if you have more than one employer) in a place you’ll remember. The earliest you can begin filing your taxes is on January 27. And when you have all the documents in hand, don’t wait! Avoid stress and error and check one more item off your to-do list. And if you're expecting a refund, you'll likely get it that much sooner.
The Importance Of January 31st
Be on the lookout for W-2 forms from your employer by mail, no later than January 31. Sometimes, employers even have your W-2 documents available online to make things easy.
If you do not receive your W-2 forms the week before January 31, begin contacting your HR department, as they have some explaining to do. Updated home addresses and company confirmations make all the difference.
Where Can I File My Taxes for Free?
At Rocket Loans, we love simple and easy. And thankfully most self-servicing tools are fairly intuitive and designed to help educate first-time filers along the way. Some resources being:
During your individual income tax return, you share some personal, tax deduction and W-2 income information. And there’s online support to help throughout the filing process. With more complex paperwork, head over to an accountant to help you keep every possible penny from your year of hard work.
If you're getting a refund, be ready to come back sooner for you than most if you take initiative and get it done early. With those funds, you could put a down payment on that new car you’ve been seeking or help with the closing cost of your first home.
When is the Last Day to File?
The Importance Of April 15th
You have until April 15th to submit your documentation for a return, so don’t feel pressured to get it done as soon as the IRS gives the green light to submit.
However, make sure to set aside some time to get this done over a Saturday morning cup of coffee. The sooner you file, the sooner you could receive any potential refunds.
What If I Owe Money?
Sometimes, after filing, you may learn you owe money and need to send the IRS a check. This means that you paid less tax during the year than you owed for your income level. To avoid this from happening in the future, you may want to revise your paycheck withholding for next year. This means updating your withholding form.
You know the one. The W-4 form you fill out when you start a new position? It doesn't have to be a one-time thing. You're allowed to make changes as much as you'd like. To start, it may be helpful to use a tax withholding estimator.
After analyzing your factors, like how much you contribute to a tax-deferred retirement plan or health savings account and how much federal tax you had withheld from your most recent paycheck, it will calculate your estimated tax expectency (overpayment vs. underpayment).
When Will I Get My Refund?
It may take a few weeks to get the funds you need to start your new year right. Most filing services will send a notification when your federal and state taxes get processed, but you can always search the IRS site and check the status of your return if you don’t want to wait.
We know it’s hard but try to have a little patience. Allow the IRS to do their part in working hard to process all the returns they receive during this time of year. And remember the sooner ahead you are "in line," the faster any refund will come.
If you are in a bind or have an expense that you were planning on using your return for before April, we have may have offers to help during the in-between period.
Once Your Funds Arrive
Assuming now you have a full understanding of how filing your taxes works and which days you should highlight on your calendar, now is the time to to do something pretty cool with your refund money like pay off debt, start some home improvements, or buy a shiny new car. Congratulations!
Tax returns can feel draining, but it’s easier when you have a timeline to navigate. And now that you have your smarts about W-2’s, filing resources, and refunds, you are all set to enjoy the next taxing phase in the cycle: paycheck withholdings.
Alas, happy filings.
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