Free for 90 days: Sign up now and get 90 days managed free after your first deposit. See offer details

<title>Dismiss</title>
Tax Filing Preparation

Should You File Your Return Now or on April 15?

The final piece of your tax season game plan is carefully timing when to file your tax return. Here’s why.

Articles by Betterment Editors

By the Editorial Staff
Betterment Resource Center  |  Published: February 12, 2015

File your income tax return immediately if you will be receiving a refund.

Delay filing until close to April 15 if you owe the IRS money.

Congratulations! You spent the last day or two completing your income tax return. Now you know whether you’re getting a refund or whether you owe money to the IRS.

However, completing the paperwork is just the first step of the process—now it’s time to think about when to file your tax return.

Alex Benke, CFP®, Betterment’s Director of Advice Products, recommends that you time your filing to the IRS based on whether or not you will be getting a refund.

“File immediately if you will be receiving a refund,” Benke says. “Delay filing until close to April 15 if you owe the IRS money.”

Here’s a quick guide for filing your return:

when to file tax return

Your Status: You will get a refund.

What To Do: File immediately to get your refund processed as soon as possible; otherwise you’re extending an interest-free ‘loan’ to the government. While some people see a tax refund as a way to enforce savings throughout the year—and create a fund to pay off holiday bills—you might consider re-examining the withholdings on your W-4. It may be that you are ‘lending’ the government too much money. If you’re not sure, consult a tax advisor. In most cases, you can adjust your withholdings by talking to your company’s payroll department.

Pro Tip: If you tweak your W-4 withholdings for a bigger paycheck throughout the year, consider automatically depositing that extra income into a savings account. That way, you earn and keep the interest.

Your Status: You owe money.

What To Do: If you owe money to the government, you are getting an interest-free loan… until April 15. Don’t be in a rush to pay it off. In a general way, that provides you the opportunity to ‘stay in the market’ longer (or earn more) before paying the bill. However, make sure you do file—and pay what you owe—by the April 15 deadline. The IRS has stiff penalties for late filers and charges interest on late payments. If you owe a substantial amount, re-examine your withholding (W-4) so that next year you’re not left with a big (annoying) tax bill.

In either case, take a moment to consider the bigger picture. If you have time before April 15, ask yourself whether you can still do better: Did you contribute to your IRA for 2014? If not, would you be able to if you had another month of earnings? Consider postponing filing your return until you make your 2014 contribution to your IRA.

If you have already done that, then file away and feel great about a job well done.

More from Betterment:

 

Recommended Content

View All Resources
Tax Deductions: Reading Between the Lines

Tax Deductions: Reading Between the Lines

Tax deductions can lower the amount of income that you end up paying taxes on. We’ll highlight popular above-the-line deductions and below-the-line deductions you may want to consider.

4 Tips for Protecting Your Identity and Assets this Tax Season

4 Tips for Protecting Your Identity and Assets this Tax Season

Fraudsters and hackers often abuse trust relationships between online accounts to coerce people into sending them money. Here are four tips to help keep your money and identity safe this tax season.

Cash Analysis Methodology

Cash Analysis Methodology

Betterment's cash analysis aims to provide smart feedback when we think you have extra cash that could be earning you more value if it were in a higher yield account.

Explore your first goal

Safety Net

This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.

Retirement

Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.

General Investing

If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.

Smart Saver

You could earn 20X more than a typical savings account with our low-risk investing account for your extra cash.

<title>Close</title>

Search our site

For more information and disclosures about the Betterment Resource Center, click here. | See our contributors.