FIRST …by law you are required to have the W-2 in you possession prior to filing for 3 reasons:
1) You must physically attach a copy of the W-2 to a mailed tax return.
2) If you e-file you must retain the W-2 because the IRS can request that you send it to them at any time to verify the information so it must be in your possession.
3) You sign the tax return (either on paper or electronically) that the tax return is complete and accurate under penalty of perjury and without all the W-2 box information that can only be obtained from the actual
W-2, it will not be complete or accurate.
Then …aside from being illegal … filing before your employer issues a W-2 is unwise for many reasons :
1) the info on the paystub will not match the W2 in most cases AND this will trigger an IRS audit AND/OR require you to amend the return which is a pain
2) the IRS will not process any return until they have the info from the employer to match to your return so filing early just puts you in a holding pattern with millions of others which can delay your return for weeks
3) any return with EIC or ACTC is automatically delayed in processing until after 2/15 no matter when you send in the return ... and in the past the early filers got stuck in the aforementioned holding pattern and their refunds were delayed
4) once again the tax forms have been redesigned so delays or bugs in the system will need to be worked out ... filing before these have been corrected can delay your return's processing as recent past history has proven ... in the case of the IRS the early bird doesn't usually get the worm, it only gets an un ripened apple.
Although TurboTax may allow you to e-filed some returns as early as 1/6/22 (IF the forms in your return are ready for filing … see info below) they are NOT actually sent to the IRS. TurboTax stores those early filed returns in a holding “POOL” until the IRS opens for business and “drains the pool” for processing ... only then will you get an e-mail telling you if the return was accepted or rejected by the IRS.
Only the simplest returns can be transmitted to TurboTax early. Some forms will not be finalized until Jan 25 and some later than that.
https://ttlc.intuit.com/questions/1908854-forms-availability-table-for-turbotax-federal-products-exc...
Why does TurboTax allow early filing? Because their competitors do - It is a marketing ploy to capture market share.
Filing early with TurboTax before the IRS opens is a really BAD IDEA for many reasons...
1) If you discover something that is wrong on your return, receive a W-2 that is different, receive some other tax document that was not on the return that you filed then there is NOTHING that you can do about it other than wait to see if the IRS accepts or rejects the return after they open. If rejected you can correct and file again, but if accepted then the only remedy is to amend which can take at the very least 4 months to process.
2) You must remember to check back after the IRS opens (or check for an e-mail) to confirm that the IRS has accepted or rejected the return. If rejected, then it was never filed at all and must be corrected and re-filed. Every year many taxpayers that file early, forget to check back and only discover months later that they never actually filed because if was rejected by the IRS but they had forgotten about checking back after filing with TurboTax.
3) While the IRS does conduct some pre-opening tests and does accept some returns early (ONLY for TESTING purposes), they will not actually process those until after the official opening date. The reason they do testing is to discover any problems with their systems. A couple of years ago a test went bad and several thousand "test" returns were lost. The IRS was able to recover those but it delayed refunds for some by months.
There is no real advantage to file before the IRS opens but there are several disadvantages to doing so.
When will my forms be ready?
Historically, IRS tax forms start becoming available in January, with a few stragglers (most notably Form 1040X) getting finalized in February.
State tax forms can become available for filing any time between December and late February, depending on the state and the tax form.
For specific forms and dates, refer to the Forms Availability Table for your TurboTax product, see the related information below.
Can I Still Work On My Return Before My Forms are Ready?
Yes, according to the following:
Federal Taxes
You can still work on your return and finish most of it. Once your forms become available, we’ll create the forms and include all of your info.
You’ll only be able to e-file or print your return once the forms are available.
While you’re working on your return, we’ll ask if you want to receive email updates when your forms become available.
State Taxes
If your forms aren’t available, you’ll get a message asking you to return once they become available.
While you’re working on your return, you’ll have a chance to let us know you want to receive email updates when your forms become available.
IRS forms availability table for TurboTax individual (personal) tax products
