Taxes are one of those things, like laundry or starting a diet, that get pushed off for as long as possible. But if you’re only starting to think about your taxes once you’re up against the April 15 deadline, then you’re doing it wrong.
There are some serious benefits to filing your taxes early — and we don’t just mean bragging rights. The first day to file is January 28, which means it’s officially go-time. Check out these six reasons to file your taxes early.
YOU CAN PREVENT FRAUD
With all of the recent data breaches, few of us can feel 100 percent confident that our personal information hasn’t been compromised. And if someone has your Social Security number, they could file a tax return in your name and then take whatever refund you’re owed for themselves.
To help prevent this, get your taxes done sooner rather than later — especially if you know your Social Security number was leaked. The earlier you file, the less time potential scammers have to file in your name.
YOU'LL HAVE MORE TIME TO PAY IF YOU OWE
It’s estimated that just over one-fifth of Americans will owe taxes to the government this season because their employers didn’t withhold enough throughout the year due to the new tax law.
If you are in this group, it’s best to find out early so you have more time to come up with a plan. While the IRS can work with you to set up a payment plan, you’ll typically wind up paying more in the long run because of interest and fees. Having extra time to adjust your budget may mean you can pay it off in full by April 15.
YOU'LL GET YOUR REFUND BACK SOONER
If you don’t owe money this year, you may be getting a refund. In 2018, the average tax refund issued was $2,780.
Put that money to work for you ASAP, whether you plan to pad your retirement account, accelerate your student loan payments or get closer to another one of your financial goals. Wouldn’t you rather watch that money grow for you, instead of for the government?
YOU'LL HAVE MORE TIME TO FILE YOUR TAXES CORRECTLY
For those who DIY their taxes, it can be a confusing process (even with all the software options). But if you’re determined to complete them yourself, starting early allows you to take your time and file correctly.
YOU'LL GET BETTER ATTENTION FROM YOUR TAX PREPARER
If you have a more complicated tax situation or just prefer to hire a professional, snag an appointment early. Not only will your preparer have more time to spend (translation: getting you the biggest refund possible), but you’ll also avoid paying a rush fee for waiting until the last minute.
YOU'LL AVOID THE STRESS
The worst part of filing taxes usually isn’t the process itself, but the dread you feel about it. Getting it done early means the stress can end. And if we still haven’t convinced you, keep in mind that even if you file for an extension, it doesn’t give you more time to pay any money that’s owed; it just gives you more time to submit the paperwork.
This publication is not intended as legal or tax advice. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor.