Are You Ready for Tax Season? Here are 5 Big Benefits of Filing Taxes Early
We all know the saying about death and taxes. Death can be a bit unpredictable, but taxes pop up like clockwork every April. But that doesn’t mean you should wait until April to get ready for tax filing. In fact, there are some major perks to preparing early so you can file as soon as possible.
Get your books in order so you can file before everyone breaks their New Year’s resolutions (Hurry! You don’t have much time!). Here’s why it pays to file ASAP:
Eliminate that deadline pressure
Remember turning in your homework at the last possible second? That’s the same mentality as treating April 15th as the time to file taxes. Filing right at the deadline is as far as you get into procrastination without paying a fine.
When you file your taxes early, you eliminate all that last-minute pressure and stress. If it takes you an extra few days to track down a document, it’s no big deal. If something comes up at the last minute, you don’t need to be worried but it’s not literally the last minute.
And by eliminating the pressure, you increase your chances of getting everything in order rather than rushing to file with half-ready books. That means better documentation and better deductions. And that can lead to a smaller tax bill or a bigger tax refund.
Give yourself more time to pay what you owe
If your payroll withholdings and estimated payments add up to less than your tax liabilities, you’ll owe the IRS a payment this year. One of the dreaded parts of tax season is finding out how much you owe on the same day you need to pay it. Filing early to the rescue!
When you file your taxes electronically, you can see exactly how much you owe and schedule the payment for any time before the April 15th deadline. This gives you up to 3 months to plan, prepare, and make sure you’ve got the cash on hand for a (fairly) painless tax payment. It sure beats Uncle Sam handing you the tax bill with one hand while the other hand is out, palm up, waiting for your payment.
Many taxpayers like to put off filing if they owe and only file early if they expect a refund, but as you can see, there are plenty of reasons to file early no matter who’s paying whom.
Protect yourself from identity fraud
The earlier you file your tax return, the less chance there is of someone fraudulently filing one in your name and claiming your refund. While tax return fraud isn’t that common, it’s a huge mess that can take months to fix if it does happen to you.
By filing early, you plant your flag and save your spot in line. If someone attempts to file a fraudulent return after you, the mess will be on them. Although you may have to help the IRS clear up the issue, you’ll be sitting pretty with your return in hand while you handle it.
You’ll get easy access to your tax professional (and they’ll love you for it)
One of the major, unsung benefits of early filing is the ease of access you’ll have to your tax professional. Remember all that deadline stress you avoided by filing early? Just imagine the tax preparer’s equivalent of that stress, while filing dozens of returns at once!
When you file early, you’ll be one of the few smart ones working with your tax professionals before “rush hour.” You’ll have an easier time scheduling, get quick responses to your questions, and likely get through the filing process even faster than normal. And that brings us to the most fun benefit of all…
Get your refund faster
Although the deadline is in April, the IRS typically starts processing returns in late January. By being prepared and filing your taxes early, you’ll be set up to get your refund just a few weeks after processing begins. That could be a full 2 months before deadline filers submit their returns and as much as 3 months before they get their refunds!
By filing early, you’ll not only be one of the first in line, but the line will also be moving faster at that point. Before the deadline traffic starts to pile up, the IRS is able to process returns much faster. If you really want to maximize your refund speed, make sure you file electronically and not on paper.
Final words about filing taxes early
So, as you can see, good things come to those who don’t wait. Want to get your books ready for tax season so you can file right away? If you need help getting into tax season shape, reach out today, and let’s talk about your options.