By Barbara Weltman | U.S.News & World Report LP

 

The tax law sets deadlines for filing income tax returns.
However, there is room to maneuver, and the time you choose to file depends on
your personal situation. Here are some guidelines to help you decide on the
best time for you.

File early

The filing season for 2011 income tax returns officially opened in
mid-January 2012 when the IRS began to accept electronically-filed
returns
. Most individuals do not file before the beginning of February in
order to receive information returns, such as W-2s and 1099s, which are usually
sent to taxpayers at the end of January; this information is needed to complete
the return.

There are some compelling reasons to file as early as possible, once the
necessary information is available:

— To receive a tax refund. If you overpaid your 2011
taxes, the longer you wait, the longer the government has the use of your money
on an interest-free basis. Usually, you can expect to receive your refund
within 72 hours after IRS acknowledges receipt of your e-filed return, or three
to four weeks after mailing a paper return. However, the IRS has recently
indicated that some refunds may be delayed a week or two due to security measures
against fraud.

— To apply a refund to 2011 IRA or HSA contributions. You
can direct the IRS to transfer your refund directly to an IRA or Health Savings
Account (HSA) for 2011, assuming you are eligible to make a contribution. If
you want the refund to be used for a contribution that will be deducted on the
2011 return, the return must be filed early enough to ensure that the transfer
is complete before April 17, 2012, the deadline for a 2011 contribution.

Use Form 8888 to indicate the
account to which you want your refund transferred; you can split the refund
into as many as three accounts.

— To get the filing obligation behind you. Many taxpayers
dread income tax filing, so the sooner they complete the task, the better off
they feel.

April 17

The deadline for filing the 2011 individual income tax return is April 17,
2012 (April 15 is a Sunday and April 16 is a holiday in the District of
Columbia). The majority of taxpayers file by this date; it avoids the need to
request a filing extension.

Even if you normally might ask for an extension because you don’t get around
to completing the return by this date, you may have to force yourself to do so
in certain situations, such as:

— Needing a completed tax return for financial aid purposes if you, your
spouse, or your child is in or will attend college.

— Needing a completed tax return if you want to refinance your mortgage.

If, for any reason, you want more time, you have to request a filing
extension by April 17. This is done on Form 4868. But beware: The
extension only gives you more time to file the return, not to pay taxes owed.
If you obtain a filing extension, pay as much of the tax you owe to minimize or
avoid underpayment penalties.

October 15

The final day to file your 2011 income tax return is Oct. 15, 2012, assuming
you’ve received a filing extension. If you file after this date, you’ll owe
late filing penalties.

This date is also the last day to file electronically. If you miss the
deadline, you’ll have to submit a paper return.

There are no IRS indications or taxpayer anecdotes to show that filing by
this date creates any additional audit exposure. So take advantage of this
extra time to file if you need it for such reasons as:

— Family problems. If there’s an illness, a move, or other
personal issues distracting you, take the extra time–to October 15–to file
the return.

— Obtaining missing information. For example, if you’re an
owner in an S corporation, partnership, or limited liability company, you may
not receive until September 15 the Schedule K-1 indicating the share of income
and expenses you claim on your return.

— Funding a SEP retirement plan if you are self-employed.
You may not have the cash before this date to make your contribution.