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Can I File State Taxes Before Federal? Best Guide and What You Need to Know

Can I File State Taxes Before Federal

Filing taxes can be a complicated process for many people, especially when it comes to deciding which tax returns to file first. 

Among the most common questions taxpayers have is whether they can file their state taxes before their federal taxes. 

While the answer is not always straightforward, there are important details to consider to ensure that the process goes smoothly and efficiently.

Can I File State Taxes Before Federal?

Yes, you can file your state taxes before your federal taxes. However, while this is allowed, it’s important to understand the implications of this decision. 

In most cases, it’s generally recommended to file your federal tax return first, as it lays the foundation for your state tax return. 

Filing state taxes first could lead to delays, errors, or complications, especially if your state relies on information from your federal return to determine your tax liability.

The Filing Process: How Federal and State Taxes Work Together

Federal taxes are the primary responsibility of the IRS (Internal Revenue Service), while state taxes are handled by individual state tax authorities. 

Although the two systems operate independently, they are linked in certain ways. Federal tax returns contain a significant amount of information that state tax agencies use to calculate your tax obligations at the state level.

Can I File State Taxes Before Federal? All You Need To Know
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When you file your federal taxes, you provide essential financial data that states often rely on. For example, many states calculate your taxable income based on your federal adjusted gross income (AGI). 

This means that, in most cases, you need to complete your federal return before you can file your state taxes, as the state return will depend on the numbers from your federal filing.

Why Federal Taxes Are Typically Filed First?

There are several reasons why most taxpayers file their federal taxes first. One of the primary reasons is that federal returns act as the starting point for determining tax obligations at the state level. 

Since most states rely on your federal return to calculate your state taxes, having an accurate federal return is critical to filing your state taxes correctly. 

Additionally, filing your federal taxes first ensures that all of the information needed for your state tax filing is accurate. 

Many tax preparation software platforms automatically populate state tax forms based on the data you enter for your federal return. Filing federal taxes first streamlines the process, preventing you from having to manually input information into your state tax forms.

Furthermore, if you’re expecting a refund from the IRS, filing your federal taxes first can expedite the refund process. 

The IRS generally processes refunds more quickly than state tax agencies, so filing federal taxes first is often the fastest way to get your money back.

Are There Any Downsides to Filing State Taxes Before Federal?

While it’s allowed to file state taxes before your federal return, there are several potential downsides. One of the primary issues is the risk of delays. 

Since many state tax agencies rely on your federal return to verify your information, filing your state return before the federal return could cause discrepancies between the two. 

This could delay both your state and federal refunds or, in some cases, result in the need to amend your returns.

Another potential downside is the complexity of handling tax deductions and credits. Certain deductions or credits you claim on your state return may depend on information from your federal return, such as your income or filing status. 

If you file your state taxes before completing your federal return, you might not have the most accurate or up-to-date information for your state filing, which could lead to mistakes.

Lastly, filing state taxes first could also lead to complications if there are significant differences between your state and federal tax obligations. This could cause confusion and result in errors that take time to resolve.

What Happens If I File State Taxes Before Federal?

If you decide to file your state taxes before your federal return, the state tax agency may still process your return. 

However, it’s important to understand that the state return might be flagged for review if there are discrepancies between your state return and your federal return. If the state finds discrepancies, they may delay your state tax refund or request that you amend your return.

It’s also possible that filing your state taxes first could cause delays in processing both your state and federal returns. 

In some cases, if you’ve made an error on your state return, you may need to amend your state taxes once your federal return has been filed. This could lead to additional paperwork and longer processing times.

Overall, while filing state taxes first is allowed, it can complicate the process and may not be the most efficient way to handle your taxes.

What Happens If I File Federal Taxes Before State?

Filing federal taxes first is the standard practice for most taxpayers. By doing so, you provide the necessary information for your state return to be filed accurately. 

Federal returns typically include detailed financial data that state tax authorities use to calculate your state tax obligations, so filing your federal return first helps ensure that the state return is processed correctly.

Filing your federal taxes first also reduces the chance of errors or delays. Since most tax preparation software programs are designed to integrate your federal and state returns, completing your federal tax return first makes the process more seamless. 

This reduces the chances of discrepancies or incomplete information that could cause delays or additional paperwork.

Moreover, if you are expecting a refund, filing federal taxes first often speeds up the process. 

The IRS typically processes refunds more quickly than state tax agencies, so completing your federal taxes first ensures that you receive any potential refund as quickly as possible.

When Is Filing State Taxes First Beneficial?

In most cases, filing state taxes before federal taxes is not recommended. However, there may be situations where it’s beneficial to file state taxes first. 

Some states, for example, do not rely on federal returns to calculate state taxes, which could make filing state taxes first a more straightforward process. 

In these cases, you may not need to worry about waiting for your federal return to be processed before filing state taxes.

Additionally, some individuals might prefer to file their state taxes first if they are certain that their federal return will be simple, such as those with no dependents, few deductions, and straightforward income. 

This may be the case for people who are self-employed or who have limited sources of income.

Tips for an Efficient Tax Filing Process

To avoid complications, it’s important to follow best practices when filing your taxes. 

First, double-check that all the information on your federal return is accurate. Since your state tax return depends on the data provided in your federal return, ensuring that everything is correct is crucial.

Tips for an Efficient Tax Filing Process
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Second, use tax preparation software or consult with a tax professional. Most tax software will guide you through the process and ensure that your state and federal returns are filed in the correct order.

Lastly, keep track of filing deadlines. Even though the IRS and state tax agencies may give you some flexibility, it’s important to file both your federal and state returns on time to avoid penalties.

Common Mistakes to Avoid When Filing Taxes

One of the biggest mistakes to avoid when filing your taxes is submitting incomplete information. 

Make sure that all fields are properly filled out, especially when transferring data from your federal return to your state return. Inaccurate or incomplete information can delay processing and may result in errors.

It’s also important to stay up-to-date on any changes to tax laws, as they can affect both federal and state returns. Missing important updates could lead to mistakes in your filing.

Finally, avoid filing multiple state returns when only one is required. If you live in one state but work in another, make sure you’re filing the appropriate state returns and not unnecessarily complicating the process.

Frequently Asked Questions

Can I file my state taxes before I get my federal tax refund?

Yes, you can file your state taxes before receiving your federal tax refund. However, filing your federal taxes first is generally recommended to ensure accuracy.

Do I have to file federal taxes first in all states?

Most states rely on your federal tax return to calculate your state tax obligations. Therefore, filing federal taxes first is typically the best approach. However, some states may not require federal tax data.

What happens if I file state taxes first and my federal return is wrong?

If your federal return contains errors, the state tax agency may flag your return and ask you to amend it. This could cause delays in processing both returns.

Can I file my state taxes before federal if I’m self-employed?

Yes, you can file your state taxes first, but it’s not generally recommended for self-employed individuals. Your federal return contains essential data that will affect your state taxes, so filing federal taxes first is usually more efficient.

Is there any benefit to filing state taxes first if I owe taxes?

In most cases, there is no benefit to filing state taxes first if you owe taxes. Filing federal taxes first ensures that your state taxes are calculated based on the correct information.

Conclusion

Filing state taxes before federal taxes is allowed, but it is not typically recommended. Filing federal taxes first ensures that your state tax return is accurate and based on the correct information. 

While there are some situations where filing state taxes first may make sense, in most cases, it’s better to follow the standard process of filing federal taxes first. 

By doing so, you can avoid delays, errors, and complications, ensuring that your tax filing process is as smooth and efficient as possible.