THE BLOG

Should You File Your Tax Return Now or on April 15?

02/18/2015 05:22 pm ET | Updated Apr 20, 2015

This article, written by Catherine New, originally appeared on Betterment.

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:

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:

Betterment is the largest, fastest-growing automated investing service, helping people to better manage, protect, and grow their wealth through smarter technology. With more than 50,000 customers and over $1 billion in assets under management, the service offers a globally diversified portfolio of ETFs, designed to help provide you with the best possible expected returns for retirement planning, building wealth, and other savings goals. Betterment is a CNBC Disruptor 50 and Webby award winner and has been featured in the New York Times, Forbes, and the Wall Street Journal. Betterment helps people to achieve a smarter financial future with minimal effort and at a fraction of the cost of traditional financial services. Learn more here.

Top 8 Benefits of Financial Education