Take a look at our top six reasons why filing your tax returns early can benefit you!
1) Faster tax refunds
Simply put: the faster you file, the faster your refunds come in!
2) Extra time to plan for the taxes you owe
Have an estimated idea of how much you owe so you can plan. The amount due is not due until April; so file in February, do some planning, then pay in April.
3) Avoid identity theft
Social Security Number theft is unfortunately becoming more common. For example, someone stole another person’s social security and filed a tax return in January with the stolen number. The actual owner of the social security number then had issues filing her return.
Another real life example: the Social Security Number of a child was stolen and when the parents tried to claim their child as a dependent, the return was rejected since the child was fraudulently claimed. In both cases, these are big messes to untangle with the IRS. We recommend filing early to decrease the risk of fraud.
4) Obtaining financial information
If you are selling a house, sending a child to college or applying for a loan, your tax returns will be needed soon. File early and help facilitate this process! You can have a head start on your paperwork now that your tax returns will be filed early.
5) Avoid a tax extension
If you owe money, interest, and penalties will be due on the amount you owe. Even if an extension is filed. Remember, an extension covers you for filing your 1040 past the initial April 15 deadline, but it does not extend the amount of time you get to pay your taxes.
6) More individual time
Uncertified tax return preparers and CPAs (Certified Public Accountants) have a crazy six week period from March 1 through April 15. Having your taxes prepared in February will lead to more individual time either in person, on the phone, or via email with your preparer. He or she has more time for your questions and any individual tax issues you may need solved!
We hope these reasons help motivate to file sooner, rather than later this tax season. As always, please feel free to reach out to us with any questions or comments!