There are many reasons to file your taxes early. In this particular article, we will discuss 10 of them!
Keep in mind that missing the tax deadline can result in further problems down the road.
So why should you file your taxes early? Let’s take a look!
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Related Topic: 9 Smart Ways to Spend Your Tax Refund Money
Table of Contents
1) Peace of Mind
One reason to file your taxes early is that it gives you peace of mind.
Once you have filed your taxes, you can relax and know that you have done everything you can to comply with the law.
You may be scrambling to get everything together if you wait until the last minute to file your taxes,
Knowing that this needs to be done for weeks can be a distraction and cause anxiety.
2) Get Your Refund Faster
If you expect a refund, you will want to file your taxes as soon as possible.
The sooner you file, the sooner you will get your refund.
The IRS issues most refunds within 21 days of receiving your tax return.
However, waiting until closer to the deadline to file may take longer to get your refund.
Even if you do not need immediate cash, that refund can be used to take advantage of investment opportunities.
You may need the money from your refund right away, so filing your taxes early should be a priority.
3) Avoid The Rush
If you wait until the last minute to file your taxes, you will be joining millions of other taxpayers who are also waiting until the last minute.
This can lead to long lines at the post office and busy telephone lines when trying to reach the IRS.
By filing your taxes early, you can avoid the rush and stress that comes with it. Plus, you will have more time to deal with any problems.
Rushing can also lead to mistakes; when it comes to taxes, the mistakes can be costly.
4) Avoid Criminal Charges
This may seem extreme, but if you don’t file your taxes on time, you could be charged with a crime.
Most people will not have to worry too much about this, but individuals who owe a lot of taxes or have complicated tax situations should take this seriously.
Tax evasion is a serious crime that can result in heavy fines or even jail time.
So if you don’t want to risk being charged with a crime, make sure to file your taxes on time!
Even if you are not worried about becoming a criminal because of taxes, you should still file your taxes early.
The sooner you file, the sooner you stop thinking about it, until next year, at least.
5) Avoid Penalties and Interest
If you owe taxes and do not pay by the April deadline, you will be charged penalties and interest.
The penalty for late payment is usually 0.05% of the unpaid monthly tax, up to 25%.
These extra fees can really hurt your personal finances.
The interest rate on unpaid taxes is currently about 3-4%.
By filing early, you can avoid these costly penalties and interest charges.
6) More Time To Pay
If you cannot pay the total amount of taxes you owe by the April deadline, you can request an extension from the IRS.
However, this only gives you more time to file your return, not to pay your taxes.
You will still be charged interest and penalties if you do not pay by the April deadline.
By filing your taxes early, you will have more time to come up with the money you owe.
You may also be able to set up a payment plan with the IRS.
7) Check For Mistakes
The IRS checks your return for mistakes when you file your taxes electronically.
If they find any mistakes, they will notify you and give you a chance to correct it.
If you wait until the last minute to file, there may not be enough time to fix any mistakes before the deadline. This could result in penalties and interest charges.
Let’s say you are a business owner; organizing your write-offs can take some time!
By maximizing your tax deductions, you can lower your tax bill.
It would be a mistake to miss out on valuable deductions because you rushed to file your taxes.
Filing your taxes early gives you time to ensure everything is correct and fix any mistakes.
8) Get Help If You Need It
If any questions arise about your taxes, getting help as early as possible is best.
The IRS has limited resources and is often busy during tax season.
Waiting until the last minute may result in not receiving the needed help.
By filing your taxes early, you will surely have more time to get help if you need it.
You can also avoid the rush fees that many tax preparers charge during the busiest time of year.
9) Avoid Identity Theft
Identity theft is a serious problem on the rise in recent years.
Tax-related identity theft occurs when someone uses your personal information to file a tax return in your name.
This may seem like an uncommon fraud attack, but it is actually quite common.
The IRS estimates that they paid $5.8 billion in fraudulent refunds
If you wait until the last minute to file your taxes, you may not have enough time to deal with this issue if it arises.
By filing early, you can avoid the hassle and stress of identity theft.
10) Get a Head Start On Next Year
Filing your taxes early allows you to start fresh for the next tax season.
You can use this time to start tracking your expenses and income so you can better understand what to expect come tax time.
Doing so will help you stay organized and save time when it comes around to filing again.
Conclusion
There are many reasons to file your taxes early, but these are just a few of the most important ones.
If you’re looking for a way to reduce stress and get a head start next year, consider filing your taxes early.
It could be the best decision you make all year.
Procrastination is the enemy of tax time.
The earlier you start, the better off you’ll be. Most people are not excited to file their taxes. If you are one of these people, don’t worry because you are not alone.
Do yourself a favor and start early. It will save you time, money, and headaches in the long run.
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
