Nobody looks forward to doing their taxes. Because of this, many people don’t undertake the task until the day before they are due. This may be your preferred method for filing your taxes, but you could really benefit from doing them as earlier in the year. Here are 8 reasons why you should consider starting your taxes earlier this year.
1- Those Who File Earlier Get Bigger Refunds
Everyone is eligible for the standard deduction. The amount of this deduction has many determining factors like income and number of dependents. Those who file late often choose the standard deduction because they don’t have time to itemize all of their deductions. Starting earlier gives you the chance to document all of your itemized deductions fastidiously, meaning you will probably get a bigger refund. The IRS says that taxpayers who file by the middle of February get $300 more in their return on average than their counterparts.
2- Pay Debt Earlier
Many Americans utilize their tax return to pay off some debt that has been hanging over their heads. The earlier you get your return, the more quickly you can do so, helping you avoid accruing more interest charges than you would have otherwise.
3- Your Tax Pro
Do you go to a professional to get your taxes done? If you do, you probably know how hard it is to get in as the deadline approaches. Some tax preparers even charge more during times of high demand. Stop in during January to make the meeting with your accountant as easy and profitable as possible.
4- Get Your Refund Faster
For the same reason it’s easier to find a tax professional, you will get your refund faster when you file earlier. The less clogged workload means the IRS processes your return faster, meaning they can send your return back to you before you know it. If you want your money fast, file as soon as you get your W-2.
5- People Make Mistakes
Taxes can be confusing and people mistakes because of this. It’s not uncommon to miss a number here or there or put in some information on the long line. Luckily, the IRS allows you to fix mistakes on your tax return. If you do need to make changes, you must do so before the deadline in order to avoid getting hit with a penalty. Filing as early as possible gives you a buffer period in case you make a mistake when filing. It is important to note that amended returns take about 3 months to process.
6- Becasue You Owe
You may end up owing more than you expected. If this is so, filing early gives you a chance to formulate a repayment plan, avoiding interest and late payment penalties down the road.
7- Reduces Stress
Tax season is a huge source of anxiety for people. Avoid this by filing as early as possible and getting it over with. You can’t avoid it, so you might as well get it done.
8- Financial Data
Are you planning on purchasing a home this year? Having your tax returns on hand from the previous year is a must. If you are itching to get the home-buying process started, file your taxes early.
As you can see, filing early gives you a lot of advantages over those who file at the last minute or get an extension. Filing early makes it easier to work with the IRS and gives you more financial options in the new year.