Why You Should File Your Taxes Early
January doesn’t just mark the new year; it marks the beginning of tax season.
Taxpayers have until April to file their income tax returns but it isn’t in their best interest to wait to do so. Whether you are expecting a refund or may owe on your taxes, filing earlier is always better than filing later. Here are several reasons why you should file your taxes early before the tax season rush.
Early Filers Tend to Get Larger Refunds
The IRS released data which showed that those who file by mid-February receive a refund which is, on average, larger by $300. This usually is attributed to the fact that those who start earlier on their taxes have more time and opportunity to make sure they have claimed all the deductions that they are eligible for. 69% of taxpayers cut corners by claiming standard deduction instead of itemizing their deductions. It may take more time and require more documentation, but in the long-run it could lead you to get a larger tax-refund each year.
Not Filing Early Can Leave You Vulnerable
Identity theft has increased over the past few years, especially complaints related to stolen tax returns. While filing your returns early does not completely eliminate identity theft, it can help protect your refund and potentially catch those who have stolen your identity. Refund theft happens when a scammer uses your social security number to receive your refund. The IRS will then have marked you as being paid. Subsequently, when you go to file the real refund, the IRS will reject your return, and it may take months for the issue to be resolved. Filing your taxes early is beneficial in helping protect against identity theft, but still take the time to make sure you are filling out all the forms completely and correctly to avoid making a mistake.
More Time to Financially Prepare
If you expect to owe on your taxes, filing early will give you more time to come up with the money to pay the bill. Those who wait until the last minute to file may have to greatly tighten their budget, dip into savings, or even emergency funds to pay the bill which is not a financially healthy thing to do.
Less Stress for You
The longer you wait, the more stressed you will be about getting your taxes filed in time. This can lead you to make mistakes or forget to claim some of your deductions which may put a strain on you financially. Getting your taxes filed sooner means getting it out of the way and not having to stress over it.
Less Competition for Professionals
The closer to the deadline, the busier the accountants. Many taxpayers learn the hard-way to set their appointments early because they end up having to file for an extension or have to pay more to be squeezed into the tax professional’s busy schedule.
Know some more reasons to file your taxes early? Need some more advice to get you through tax season? Leave a comment below or give us a call today!