Early Tax Filing Software | Wher To File December and January Returns


tax software for early filers

Every year, more than three out of four Americans qualify for a tax refund. With refund checks averaging $3,000, many taxpayers qualify for a windfall that they won’t get any other time this year. For those who are eager to get their money back, early filing makes a ton of sense. 

But one problem with early filing is that we don’t know when you can file your return yet. It’s always a guessing game when the IRS will start accepting tax e-File tax returns (usually it’s the last week of January), but you can legally mail in your return starting on January 1. You can see our Tax Refund Calendar here. 

Last year, only a few companies released early versions of their tax software by late December. But this year, several major competitors released their software by mid-December. Because of the early release schedule, we’re comparing TurboTax, H&R Block, TaxHawk, TaxAct, and OLT.com.

If you want to prepare to submit your taxes the day the IRS opens e-filing, these are the software companies to consider. Who’s software is the best? Who’s is the cheapest? What’s happened in the past that could make a difference this year? Let’s break it down.

Finally, maybe you’re an individual seeking a tax refund loan. If so, check out our guide to tax refund loans so you can see what your options are.

Are You Filing Your Taxes Too Early?

There are several things to consider when you start prepping your taxes early in the season. While early filing ensures you get a timely refund, there is such a thing as too early. These are a few reasons to wait before filing.

  • You haven’t received all your financial documents. Companies typically send out W-2 Forms and 1099-NEC forms in mid to late January. Filers must have these forms to complete tax returns. Many banks and brokerages won’t release financial statements until early February. While it’s great to get a jump on your taxes, you may need to hold off on filing until you have all the necessary information at once.
  • You may make a mistake. It’s always possible to amend a tax return, but it’s not something you will want to do. It can lead to audits and potential tax penalties if your refund was overpaid. It’s far better to wait for all your information before you actually file.
  • You will be claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC). Congress passed a law a couple of years ago that requires the IRS to hold all tax refunds that include the EITC or ACTC until mid-February. So even if you file on the first day, you may still be waiting until February 22 for your refund according to the IRS. 

Although filing too early is a mistake, all six companies listed above are allowing users to start entering information today. Get a jump in the software, but wait until you’re sure before filing.

Great Reasons To File As Early As Possible

While filing too early is problematic, filing as early as possible makes sense in most situations. These are a few reasons to get a jump on filing.

  • Get that refund faster. This year, many people will receive windfall amounts. This refund can be especially welcome after a year of underemployment or limited income.
  • Reduce the risk of identity theft. Someone else may file their taxes using your social security number. You don’t want to be the victim of identity theft and filing your taxes early can prevent that.
  • Find out how much you owe. If you’re one of the legions of people who found themselves unexpectedly self-employed, you may be in for a rude surprise when you find you owe money this year. Filing earlier gives you time to scrape the money together to make a payment.
  • Avoid the stress of last-minute filing. Take it from a consistent last-minute filer, you don’t want to be like me. It’s stressful to have to take a day off work just to get filing complete. Do your taxes early, and you’ll have plenty of time to get it done.

You need complete information, but getting a jump on collecting and entering that information can help you file as early as possible.

Comparing The Tax Software For Early Filers

When it comes to filing your taxes online, there are two major competitors this year: TurboTax and H&R Block. However, there are many more “small guys” out there.

I’m going to try to review as many as possible, but for early filers, there only a few who have their software updated in December. You can read our full list of the best tax software here. 

Finally, you may be an individual seeking a tax refund loan. If so, check out our guide to tax refund loans so you can see what your options are.

To compare the software for early filers, I looked at the following:

  • Ease of use
  • What information you could input today in December
  • What’s the price?
  • Does it have any technical issues?
  • Does it offer tax refund advance loans?

Header

All income, credit and deduction sections worked.

States are still delayed.

Schedule C (Self-Employed income) doesn’t work yet.

State filing will not be ready until late December.

Some form imports are blocked until January.

All income, credit and deduction sections worked.

State filing is ready. 

All income, credit and deduction sections worked.

State filing will not be available until the end of January

All income, credit and deduction sections worked. State filing is enabled.

Do You Need To Sign Up To Try?

Offers Refund Advance Loans?

Yes. Entering routing information for bank caused a circular error.

Free:

$0
Deluxe:

$40
Premier:

$70
Self Employed: $90

Free:

$0
Deluxe:

$29.95
Premium: $39.95
Self Employed: $74.95

Free: $0
Deluxe:

$24.95
Premium: $34.95
Self Employed: $64.95

Free:

$0
Deluxe:

$6.99
Pro support: $24.99

Free:

$0
Deluxe:

$40
Premier:

$40
Self Employed: $40

Free:

$0
Deluxe:

$36.99
Premium: $36.99
Self Employed: $36.99

Free:

$0
Deluxe:

$44.95
Premium: $44.95
Self Employed: $44.95

Cell

You can read our full reviews here:

Best Tax Software Choices For Early Filers

The limited time offer from TurboTax for free virtual reviews (for Free filers) is compelling. Unfortunately, many people won’t qualify for TurboTax free filing due to its limited functionality.

H&R Block still has the best free option for early filing in 2021. The free tier includes student loan interest deductions, education-related credits, Child Tax Credits, and the Earned Income Tax Credit.

This year’s battle comes down to price vs. functionality, which is a personal decision. TurboTax and H&R Block offer amazing functionality (with TurboTax having an edge), but both are quite expensive. TaxHawk, meanwhile, is a bargain software but is somewhat more difficult to use.

If you’re looking for an early tax refund anticipation loan, check out H&R Block as well. While we didn’t compare them here, they are the one of the only companies offering advance loans to online filers. And they should have their software online very soon!

Which tax filing program did you use last year and why? Are you planning to use the same this year?