Every April, many taxpayers wait until the last minute to file their federal income tax returns. Despite this tendency, there are many reasons to file your taxes early. If you will receive a refund, you may want to submit your return as quickly as possible. Additionally, there are benefits to filing early for those taxpayers who have a balance due.
1.Faster Tax Refunds
This one may seem obvious. The sooner your file for a refund, the sooner you’ll get it back. The closer you wait until Tax Day, the busier the IRS is, and the longer it’s going to take to get your money back. Filing your return electronically with direct deposit into your bank account is the fastest way to get your refund. It can take up to several weeks longer for paper returns, so it is always better to e-file a return if you want to receive your refund quickly.
2.You can prevent your return from being stolen
Once a criminal gets access to your Social Security number, he or she has everything necessary to file a tax return in your name. The purpose of a fraudulent tax return is, obviously, not to pay your back taxes, but to pocket your tax refund. This scam occurs early in the tax season, well before most taxpayers file. Take every possible precaution to keep your SSN secret, and if possible, file your taxes early. I don’t know how you feel about it, but someone else getting my money doesn’t sound ideal to me.
3.You’ll be less stressed
The 2017 tax deadline this year is April 18th*. If you find out your taxes are going to be more difficult than past years, you may find yourself scrounging around for paperwork and the process may take a lot longer than you planned. By filing early, this date shouldn’t be a source of stress for you.
4.You’ll have more time if you have to pay
If you owe a balance due to the IRS, you may still have a good reason to file your tax return as soon as you can. If you submit your return in the middle of January, you do not have to pay taxes you owe until the filing deadline in mid-April. Preparing your Form 1040 early will give you time to arrange your payment. This extra time is particularly helpful to taxpayers who need to find out exactly how much they will owe the IRS.Think about that if you know you owe money this year.
5.Tax pros are less busy
Not only is the IRS less busy at the beginning of the year, but tax professionals are as well. Keep this in mind if you’re not filing on your own. For those of you who file online, this won’t be a big deal, but if you need a pro to help sort you out, you’ll be glad you made an early appointment.
6. Avoid a Tax Extension
Filing your tax return early may help eliminate the need to file an extension. Extensions of time are often required as a result of disorganization more than financial need. Some people who wait until the last minute to file their returns simply need time to look for additional deductions or gather receipts. Push the process too close to the filing deadline, and you increase the likelihood that you will need the help of a tax professional to help you sort your finances and complete your return. Even worse, if you file an extension but don’t pay what you owe if you have a balance due, the IRS will charge you interest and penalties on the outstanding tax debt until it is paid in full. Preparing your tax return early in the year helps you avoid this situation