Is it tax season already? We hate to be the bearers of bad news, but it sure is. It’s time to face your tax return—and deal with everything that comes along with it. Just the thought of filing may have you recoiling right now, but take our advice: Don’t. Waiting until the last minute may lead you to miss out on the benefits of filing taxes early.
Most people dread tax season. And we can’t blame them! When you don’t have the knowledge and expertise of a tax pro, the thought of organizing all your documents and filing your taxes can seem daunting.
But procrastinating doesn’t help anyone. In fact, filing taxes earlier doesn’t just reduce your stress. It also brings a number of other advantages with it as well! So as we get into tax season this year, we wanted to share with you some of the benefits of filing taxes early this year.
Hopefully, one (or more) of these benefits will give you the inspiration you need. Before you know it, you’ll be moving on with your life. And your taxes will be long behind you.
The IRS processes millions and millions of tax returns each year. And the majority of those tax returns trickle in closer to Tax Day than to the start of tax season. Now, the IRS processes most of these returns through their computer system. So they don’t need human eyes on each and every tax return.
But their workforce and resources are limited, and delays begin mounting as tax season progresses. So the earlier you can file your tax return, the earlier you can expect to see it processed. And that means you can expect your tax refund sooner, as well.
If you file online, this speeds up the process even more over paper tax filing. So consider this among the benefits of filing your taxes earlier: If you want to get your hands on that juicy tax refund sooner rather than later, then file sooner rather than later.
Even the most diligent taxpayer will make a mistake every now and then. But we can guarantee you that you’re more likely to make a mistake at 11:15pm on Tax Day than you are at 6:00pm on February 25th.
You should always strive for an error-free tax return. That means all numbers and spellings are correct, along with the math. It helps you avoid the dreaded tax audit, which can stretch out your tax filing season far beyond Tax Day. And it can even result in an unpaid tax balance, which might spring up if your numbers were off or you missed some income.
The best way to avoid all this: File early. If you aren’t totally convinced yet, just trust us then. Filing an accurate, thorough tax return is one of the most underrated but greatest benefits of filing your taxes early.
This year, many taxpayers will opt for tax prep software to knock out their taxes. For many others, they’ll opt to tap in a tax pro. And the early bird gets the worm.
Why is this? Well, tax prep professionals and tax prep companies only have a limited number of hours in a day—and also in a tax season. While some companies (like us) have the tools, pros, and technological might to help anyone who comes searching, that’s not true for every tax preparer.
Small, independent professionals may have bandwidth issues. And large, national firms like H&R Block work more as tax preparation mills, so while they can serve a higher volume, the service is less tailored.
Regardless of the size or skills of the tax preparation company in question, everyone starts having bandwidth issues as they approach the tax deadline. It becomes much more difficult to get an appointment and to get your tax preparer the paperwork they’ll need to get your taxes filed.
So if you’re planning to get assistance this year on your taxes, get started now. Or you may miss out on one of the benefits of filing your taxes early: Getting the expert help you deserve.
When you file earlier, you have more time for everything: organization, research, hiring a tax expert…you get the idea. But did you realize that all of this can result in a bigger refund?
It’s true! It’s not totally intuitive, but it’s true. Just think about it! When you file your taxes at the last minute, you miss things. That doesn’t always result in accuracy errors like we mentioned earlier, though. It can also result in simply missing key details that could boost your refund.
For example, if you file last minute who just bought your first home, you might neglect to deduct your mortgage interest. After all, you’re not used to this deduction. And for the exact same reason, you run the risk of missing out on other tax deductions and credits.
Perhaps it’s your student loan interest, or perhaps it’s the Child Tax Credit. Depending on your exact situation, you could lose out on tens, hundreds, or even thousands of dollars on your tax return. And you can avoid nearly all of that if you simply file taxes early.
Right now, you may be wondering how filing your taxes early can help prevent tax fraud. Are we serious? Or are we just looking for some way—any way—to fill out this list? We can appreciate the healthy dose of suspicion, but yes. Filing early really can prevent tax fraud.
Here’s why. In reality, the only piece of truly private information required to file your tax return is your Social Security number. If you have that information, you can file your taxes. And if somebody else has that information, they can file your taxes, too. So, one popular tax scam involves scammers taking your SSN and filing taxes early.
They have one goal: File your taxes and pocket your tax return. After that, they (attempt to) vanish into the wind. This leaves you holding the bag for any tax audit, and leaving you without your well-deserved tax refund.
We’ve written about this scam before, but you can stop it in two simple ways. First, keep your private information private! They can’t file your taxes if they don’t have your SSN, so be careful and think twice before providing it elsewhere. Second, file early! A tax scammer can’t pocket your tax refund if you’ve already filed your tax return.
Nobody likes to owe the IRS when tax time comes around, but it happens. Unfortunately, filing at the last minute puts you at an extreme disadvantage should this happen. Because you may learn—last minute—that you don’t have enough money to pay it.
If you’re running low on time, you can generally file for an extension on your taxes. This gives you an extra six months (typically until mid-October) to get your taxes filed. However, there’s no way to push back the deadline for paying your taxes. And in some cases, you may discover your tax bill sits in the hundreds or thousands of dollars.
We don’t know about you, but most people need to carefully consider their finances before paying $1000-2000 all of a sudden. So if they decide to file their taxes a week before the deadline, they don’t have time to plan that tax bill.
Sadly, this is how tax debt starts for thousands. But it can be avoided! And that’s one of the greatest benefits of filing your taxes early. It’s a lot easier to pull together a couple thousand dollars in two months than in two days. Even if you can’t get all the way there by Tax Day, your tax bill will be much lower. And so will the likelihood of you getting crushed by tax debt.
If we told you to picture “doing your taxes,” what comes to mind? Probably a bunch of papers and head-scratching, probably set at night. There’s an inherent stress that comes with filing your taxes. And as anyone who has ever procrastinated before can attest, the stress only grows as the deadline approaches.
One of the easiest ways to avoid this stress: filing your taxes early. While you may think of filing as a chore, there’s no greater feeling than knocking out that chore early. You may even find yourself feeling extra chipper on Tax Day. After all, every “Tax Day is almost here!” news story will come as a reminder that you were ahead of the ball.
So, what’s next? Filing your taxes, of course!
You can get started simply by organizing your paperwork and tax documents, as well as digging up any loose receipts you may need. Breaking down the overall tax filing process into chunks goes a long way to making the process smoother and less overwhelming.
Looking to maximize your tax refund this year? We’ve got you covered. Send us a message via our free live chat—and one of our tax experts will help you get started.
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