With nearly three out of four taxpayers receiving an income tax refund each year, around $2,800 on average according to the IRS, we can’t think of any reason you’d want to delay filing your taxes.
But, as awesome as it is to have more cash in your pocket, that’s not the only benefit of early filing. Here are a few more reasons to get your act together early this tax season:
Early filers average larger refunds
IRS data shows that taxpayers who file by late-February get significantly larger refunds than those who file later—around $300 on average. Obviously, if you know you’re getting a refund, you’re more likely to file sooner, and that could be part of the reason early filers enjoy larger refunds.
But another reason is that the sooner you start on your taxes, the more opportunity you have to make sure you’re claiming all the deductions you’re eligible for. The IRS reports that 66% of taxpayers choose to claim the standard deduction on their tax forms. Millions of taxpayers could get larger refunds by itemizing their deductions, which takes more time and requires more documentation than claiming the standard deduction. According to the Government Accountability Office, it’s a shortcut that could cost taxpayers $1 billion each year.
Don’t put yourself in a position where you have to cut corners in order to meet the tax-filing deadline. Start working with a tax pro early so you have time to get the job done right.
Early filers can protect their refunds from identity thieves
Filing early may not eliminate the threat of identity theft, but it can protect your refund. If thieves file a return using your Social Security number before you do, the IRS will kick out your return since their records show you’ve already been paid. It can take months to clear up the mess with the IRS and finally receive your refund.
Remember that even though you may feel like you’re in a race to get your forms filed, don’t rush through the process. That’s how mistakes get made. And when it comes to taxes, those mistakes come with dollar signs!
Early filers eliminate tax deadline stress
Any time you face an unpleasant task, it’s best to get it out of the way as soon as possible. Income taxes are no different. You must fill out the forms and you have to file them, so just grit your teeth and get it over with. Give yourself a fake deadline—well ahead of the April deadline—to get your taxes taken care of. Once your return is filed, give yourself a small reward for being so efficient and responsible. Then relax while everyone else stresses out about getting their taxes done on time.
Early filers with a tax bill have time to make a plan
When you’re facing an income tax bill instead of a refund, it’s natural to put off filing as long as possible. But if you go ahead and fill out your tax forms and file them, you’ll know exactly how much you must pay—and you won’t have to pay in full until the April filing deadline.
The more time you have to come up with the money, the less likely you are to bust your budget or drain your emergency fund. So, don’t spend the first part of the year with your head in the sand. Get the facts about what you owe, make your plan, and get that tax bill out of the way.
Early filers face less competition for access to their tax professional.
By mid-March of the 2018 tax season, nearly 78 million people had already filed their income taxes. That left the remaining 68 million people just one month to file theirs by the deadline. If you were one of those procrastinators, you found out the hard way that it’s tough to get on a good tax pro’s schedule during crunch time. In fact, if you haven’t set an appointment with a pro by the middle of March, you’ll probably have to file an extension.
On top of that, most tax pros will charge more to complete your taxes as the filing deadline approaches. The best way to avoid all that hassle is to get an appointment with your advisor as soon as possible.
© Lampo Licensing, LLC. All rights reserved.