When to Start Filing Taxes: 8 Key Benefits of Filing Your Taxes Early

Monday, February 24th 2020, 11:39 am
By: News On 6

Tax Filling

In 2018, the Internal Revenue Service reported that 15 million people received a six-month extension to file their taxes. Despite the extension, many Americans still filed their returns past the extended deadlines. Late filing attracts a penalty of 5% of the total owed tax for each month.

If you don’t know when to start filing taxes, the deadline might catch up unexpectedly. The last thing you’d want is to rush through the process, which would translate to filing errors.

Keep reading to know the eight key benefits of filing your taxes early.

1. Fast Refunds

If you need extra cash to kick start your New Year goals, file your returns early. The sooner you file your taxes, the sooner you’ll obtain your tax refund. Refunds are like bonuses from the IRS, which you receive effortlessly.

It is crucial to note that paper returns can take several weeks to process. If you want to get the cash faster, consider filing your returns electronically. The IRS is now accepting e-file returns.

So, when does IRS update refund status?

The IRS processes all the tax refunds two times in a week. If you mail your returns, you will have to wait for six weeks processing, while for e-files, the processing reduces by half.

2. Larger Refunds

Higher than usual tax refunds will get you feeling like you just got a promotion. The IRS knows how to keep taxpayers elated. When you file your returns early, you might get $400 more than late filers. Filing early helps you obtain what is rightfully yours.

You don’t have to wait for the April deadline to file your taxes. While there are no specifications on the amount of refund to get, early filing will have a great addition to your pocket. What’s more, you can claim tax deductions and credits that you deserve when you make early tax preparations.

3. Protection From Identity Thieves

In February 2019, the IRS identified 3,529 fund returns with $15.8 million fraudulent refund claims. Online refund thieves steal billions of taxpayers’ money each year. While there are systems put in place to deter such occurrences, the fraudsters are also getting smarter, and your money could be at risk of these online criminals.

If you don’t know when to start filing taxes to avoid such incidents, the time is now. By the time the deadline approaches, so much might have happened. The more you delay, the more time you give hackers to steal your Social Security Number to file returns and claim refunds.

While filing your tax returns doesn’t eliminate the risk of identity theft, it can have significant impacts on protecting your refund. Most victims of tax fraud can attest to the delayed filing of taxes. Consider filing your taxes early to avoid being part of the statistics.

4. Avoid Tax Deadline Stress

When the tax filing deadline is fast approaching, most taxpayers are stressed. Filing returns isn’t one of the most fun activities. The more you postpone this overwhelming yet crucial activating, the more the deadline will be dreadful.

Besides, the last-minute rush won’t give you enough time to countercheck your filed returns. Wrong information can make you susceptible to fines. To avoid such stress, file taxes early and watch as everyone runs around in April.

Working with the deadlines on matters related to tax filing isn’t a strength. If you’re in that category of people, giving yourself a made-up deadline before April can help. File returns before the fake deadline and rewards yourself for being a responsible citizen.

5. Access Essential Information

Certified public accountants are usually busy between January and April. With early access, your CPA or preparers will have adequate time to assess your situation and assist you with your returns. Besides, early tax preparation enables you to access the available up-to-date information.

The information is critical, especially if you’re about to make significant life changes such as advancing your education or buying a house. You could get financial aid as a student if you applied using Form 1040. For homeowners, showing proof of household income is only possible when you have completed filing your tax returns.

6. Adequate Time to Clear Your Taxes

If you have tax arrears, filing your taxes early will give you sufficient time to take note of your finances and pay the balance as required.

Adequate time ensures that you won’t have the pressure of paying accumulated tax when the deadline is due. Last-minute scramble can be anguishing, and waiting for the taxman to come knocking on your door isn’t pleasing.

The IRS allows for different repayment methods. Once you plan your finances, you can take advantage of the months before April to pay in bits. By the time the deadline is due, you’ll be debt-free and ready for the next taxation period.

7. Avoid Amended Returns

As you rush to file your returns a few days to the deadline, you might end up submitting incorrect information. Inaccurate returns become amended returns, which are a significant reason for audits. Undergoing an audit is not one of the experiences you’d admire.

When you start filing your returns early, you can check all the official documents. Confirm whether the deductions and the stated exemptions are error-free. With some materials such as 1099 having a chance of arriving late, early filing addresses such an issue.

8. Get the Best Filing Option

In April, the rush and the tension can’t allow you to be a choosy taxpayer. It wouldn’t be surprising to settle for the first tax preparer available. Filing your returns late limits the time you need to vet the professionals to know the quality of service provision.

Conversely, filing your returns early makes you the boss. You can go through the software available and the professionals to know what works best for you. With such advantages, the chances of making errors through the process are minimal.

If You Are Wondering When To Start Filing Taxes, Start As Soon As Possible To Enjoy the Benefits

Waiting to file your taxes in April isn’t one of the best options. Most taxpayers are not sure about when to start filing taxes. Filing your taxes as early as possible gives your peace of mind, besides adding a larger chunk of the refund to your account.

The benefits of submitting early tax returns are worth pursuing. You can work with a tax or financial advisor to ensure that you get the filing process right.

Keep exploring our site for more articles.

Information contained on this page is provided by an independent third-party content provider. Frankly and this Site make no warranties or representations in connection therewith. If you are affiliated with this page and would like it removed please contact pressreleases@franklymedia.com