Tend to wait until the last minute to file your tax return? You may want to rethink your approach. Here are seven reasons for filing taxes early this year.
Truly, one of the biggest reasons for doing anything on the early side – to avoid stress. Procrastinating anything – be it taxes, work projects, etc. – always leads to unnecessary stress. Wouldn’t you rather be able to take your time assembling all your documents and ensuring everything is correct, as opposed to frantically digging through receipts for numbers you need days before the deadline? Last-minute stress isn’t worth it, and it’s simply better to avoid it as much as you can.
Avoid Tax Identity Theft
Unfortunately, tax identity theft is common around tax time. This means scammers can use your personal info to file taxes under your name, claim bogus benefits, and pocket your refund. While filing taxes early won’t necessarily protect you from identity theft, it can protect your refund.
Just like tax professionals, scammers will get busy in the weeks leading up to April 15. But, if you’ve filed your return early and claimed the refund yourself, scammers will find themselves coming up empty-handed. And since scammers are looking for a quick payday with these false tax returns, it’s unlikely that any other action will be taken with your stolen identity.
Allows Time to File Accurately
Of course, filing early (or at least starting your taxes early) will allow you to take the time to file accurately. You won’t feel the pressure of the deadline looming over your head, so you can carefully double-check that you:
- Have avoided any and all errors
- Have all the documents in order
- Check for any tax laws or changes that can impact you
By filing taxes early, you can also maximize your refund amount by ensuring you’ve applied for all the deductions to which you’re entitled. If this all sounds too complicated to do by yourself, the extra time can also allow you to chat with a tax professional to help you out.
Get Money Back Sooner
If you want your tax refund to be in your bank account sooner, filing early is good practice. Getting a jumpstart on filing your tax return means you will be one of the first in line to receive your tax refund.
When you wait until the last few days to file and file through mail, you could encounter processing delays. For instance, by May 13, 2023, the IRS still had 4.2 million unprocessed returns. To get money back faster, file your taxes early, choose to e-file, and choose to receive your funds via direct deposit to help speed up the process.
Extra Time to Arrangement Payment if You Owe
If you’re not receiving a refund but instead owe taxes to the IRS, filing early gives you more time to plan how to pay off that money. If you’re anticipating a large tax bill and procrastinating your tax filing, you’re doing yourself a disservice. After all, filing early doesn’t mean you have to pay early. You still have until April 15 to pay your taxes or set up an IRS payment plan. By getting the paperwork done early on in the season, you’ll get a firm number on what you owe and will be more prepared to adjust your finances accordingly so that you can pay off the debt rather than scrambling to scrape together funds at the last minute.
Avoid Penalties and Interest from Late Payments
If you fail to file by April 15, you can face a penalty. The IRS can charge a penalty for various reasons, including not filing on time, not paying what you owe on time, and not preparing an accurate return. If you don’t pay the penalty, you could also face interest. While you can dispute penalties, this takes time and effort. The easiest way to avoid penalties is to file and pay on time or file for an extension if needed.
Have More Access to Your Tax Professional
The closer it gets to the tax deadline, the busier it gets for tax professionals. If you’re working with one, the time to get help with filing taxes is early in the season. People who didn’t have their tax documents ready sooner, those who need a last-minute change to their tax return, and other tax procrastinators will begin placing more and more demand on your tax advisor as the deadline draws closer. The earlier you file, the easier it will be for you to get the assistance you need, when you need it.
Our strategic tax-matters advisors look forward to offering you our personable tax services.
Gaylor Tax Services is Here for You
Whether you’re a business or an individual, filing taxes early is always a better idea. Need assistance filing? Let us help you. We can also help you with strategic tax planning if you’re looking to reduce your tax burden in the future. Our experts are here to answer your questions year-round, so do not hesitate to contact us. We are located in Phoenix, Arizona, but can assist you anywhere in the state.