When it comes to filing taxes, over 20 million Americans will wait until the last minute to do so.
This isn’t a new trend. For years, Americans have been waiting until April to file their taxes for the year. This may be either right before, or right after the due date of April 15.
So, why are so many people filing their taxes at the last minute? It’s simple, really. It’s human nature to forget or put off things until their due date.
The tax season is no different. While many of us choose to file at the last minute, there are actually tons of benefits to filing an early tax return.
Keep reading to learn what they are!
Why You Should File An Early Tax Return
As tax season approaches, many of us are frantically searching for our old W-2s and receipts.
Tax season is a huge stressor for many of us, and unfortunately, the reason is often that we’re unprepared. Avoid the stress of tax season by filing as early as you can.
If you’re not convinced that filing early is the way to go, keep reading to learn our other reasons for filing early…
1. You’ll Receive Your Refund Quicker
If you’re getting money back this tax season, the earlier that you file the better.
This is because you’ll get your refund around three weeks after you file. If you file as soon as you’re able to, you’ll have that money to help you recover from the holidays a bit! If you drag the process out, you may not get your return until late spring.
2. If You Owe Money, You’ll Have More Time To Pay It
While some of us earn money back around tax season, not all of us are as lucky.
If you have to pay in for your taxes this year, you’ll want to know as soon as possible. It can be hard to come up with thousands of dollars if you have no idea what you’ll owe for taxes.
Choosing to file at the beginning of tax season gives you an edge on paying what you owe, so don’t hesitate to file!
3. Weigh Your Options
It’s great to start looking into taxes as soon as possible so you can figure out a plan.
There are so many options these days for filing, it can be overwhelming to choose one. You have the option to file yourself, use an online program, or meet with a professional in person.
Depending on how complex your tax information is, you may need to seek the help of a professional to avoid being audited. Weighing your options early on gives you plenty of time to choose the tax route that works the best for you.
If you wait too long and guess on your information, you may face a tax penalty. If you already are facing a tax penalty, follow the link for more details on how you can help yourself.
4. You Have Time To Uncover Potential Tax Breaks
When we don’t take the time we need to do our taxes, we’re often missing out on tax breaks we may be eligible for.
You may be able to receive a tax break for your charitable donations or even purchasing school supplies. While applying for these tax breaks, it’s important to have receipts and proof available.
If you own your own business or you’re self-employed, there are tons of factors you can get tax breaks for. Internet, rent, website costs, and utilities are just a few things you may be able to claim for a tax break.
The sooner that you start filing, the more time you’re giving yourself to take advantage of these tax breaks as you learn about them.
5. Avoid The Stress of Rushing
We all understand the tangible reasons why filing early is the best decision, but what about the mental benefits?
Filing your taxes is an incredibly time-consuming process. You have to go through all of your past income information so you can apply it to this year’s taxes. If you’re missing an important document, you may end up needing to have one re-sent, which can take weeks!
Having to get through these hurdles a couple of weeks before your taxes are due is not only dangerous for penalty purposes, but for your own well-being. Nobody wants to feel like they’re punching a clock when it comes time to file, so give yourself enough time to breathe.
6. Financial Benefits
There are many financial benefits to filing your taxes early, even aside from the ones we’ve already discussed.
Filing early can help you boost your credit. This is because any returns that you get, you can apply towards loans, bills, or any other financial obligations that are collecting interest.
If you have a $2,500 credit card balance, how nice would it be to wipe that out with your return if you’re eligible for one?
7. Protect Yourself From Fraudulent Activity
If someone happens to get a hold of your Social Security Number, they have the ability to file a false tax return.
The longer you wait, the higher your chances of having false tax information submitted are. Fraudulent activity is often increased around tax season as people are preying on the vulnerability that comes with tax season.
While you can have the tax fraud fixed, it may take weeks which will push back the time in which you get your return.
The good news is that if you file early, your information will already be on file. When your information for the year is already on file, a fraudulent return can’t be submitted. If one is even attempted, you will likely be notified of the attempt.
File Your Taxes Early
Filing an early tax return is going to benefit you in terms of finances and stress.
There are so many benefits to filing as early as possible during tax season. While it may be easy to put it off until the due date in April, don’t take the gamble.
If you found this article helpful, check out our other posts on Building Your Wealth!