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Don't File Your Taxes Too Soon. Here's Why.

You've probably gotten your W-2 tax forms from work by now, and you might be rearing to get your taxes filed to get your refund on its way. But there are good reasons to hold off before filing your taxes too soon.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, runs through some key reasons why you should hold off on filing your taxes too early. Dan notes that often, forms from short-term jobs you might have forgotten about or from investment accounts end up getting sent late, surprising taxpayers when they finally arrive. Moreover, even if you've already gotten tax forms, some brokers are notorious for reissuing corrected 1099s due to updates that weren't provided to them on time. Dan uses master limited partnerships as an example, noting that while Kinder Morgan Energy Partners (NYSE: KMP  ) , Enterprise Products Partners (NYSE: EPD  ) , and other MLPs do their best to get K-1 tax forms out by mid-February, other companies that report on K-1s aren't always as timely. Linn Energy (NASDAQ: LINE  ) notes on its website that it has until mid-April to get K-1s to investors, even though it aims to have them out well before that. Dan concludes that filing early can just create the hassle of having to file an amended return later, and it's far easier just to wait and file once you're sure everything's 100% correct.

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Read/Post Comments (8) | Recommend This Article (33)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 01, 2014, at 11:07 PM, kennyhobo wrote:

    A few of my money managers use REITS which produce K-1 forms. The deadline for K-1s in March 31 to the taxpayers.

  • Report this Comment On February 02, 2014, at 10:57 AM, piasabird wrote:

    Dont file early. Make the federal govt wait and then send in a request for more time. No reason to give the IRS and easy time to get your money. If you are due a refund dont worry about it. It will still come. The federal govt passes laws every day and makes your life hell like passing ACA. So they dont deserve to have any of your money till the last possible second.

  • Report this Comment On February 02, 2014, at 11:00 AM, piasabird wrote:

    If you use software often there are last minute changes will be coming out.

  • Report this Comment On February 02, 2014, at 12:24 PM, RickLV wrote:

    You shouldn't file EVER!!!

    Let this unconstitutional, corrupt, left wing biased agency DIE!!!!

  • Report this Comment On February 04, 2014, at 6:35 PM, maximusdesimus wrote:

    ^ bad advice

  • Report this Comment On February 04, 2014, at 9:55 PM, Whumpsnatz wrote:

    ^^ but pretty funny. "Left wing biased"; that's just comedy gold.

  • Report this Comment On February 06, 2014, at 4:53 PM, blesto wrote:

    Another company that really cuts it close with having K-1's ready is Carlyle Group (CG)

    They warn that you should be ready to file an extension if they don't have them ready by the tax deadline. Which is the main reason that I sold my unitshares. I hate being late with the IRS. No sense having any red flags pop up with them.

  • Report this Comment On February 07, 2014, at 4:29 PM, SkepikI wrote:

    <but pretty funny. "Left wing biased"; that's just comedy gold.>

    Unless you have good short term memory of "The Wicked Witch of the East" Lois Lerner(sp?)

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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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