Technically your tax return (and any payments that apply) aren’t due until mid-April. Every year, many Americans wait until the very last minute to file their tax returns, often neglecting to even begin preparing them until the deadline has begun to loom large. However, there are many benefits of filing your return early.
Here are a few examples of some of those benefits.
- You’ll get your refund earlier: One of the most common reasons why people file their return early is to get their refund quicker. The fastest way to get your refund is to e-file and choose direct deposit as your refund option—keep in mind it can take several weeks for paper returns, so if a quick return is your goal then e-filing is your best bet. An earlier refund means more money into savings, or to be used however you want, whether it’s for a fun new purchase, a vacation or an investment in your property.
- You have more time to pay your owed taxes: If you have to pay in, preparing your return as soon as possible will show you exactly what you owe so you can better plan out how you’ll save and allocate that money in the weeks and months before the due date. You can submit your return early and still not have to pay your taxes until the deadline, so you may as well find out exactly how much you owe to make it easier to plan your finances.
- You can avoid having to seek an extension: Most of the people who file for extensions do so not because they have a financial need, but because they procrastinated too much and were not properly organized to quickly complete the paperwork right before the deadline. The longer you wait to prepare your taxes, the more likely it is you will need an extension. It may also become difficult to find a tax preparation specialist to work with you if you’re right up against the deadline, because that’s their busiest time of year. Plus, keep in mind that if you file an extension but don’t pay your owed balance, you’ll be charged interest and penalties on your outstanding tax debt until you’ve paid it back in full.
- You can avoid identity theft: One of the most common identity theft schemes in the United States is for people to access a victim’s Social Security number and use it to file a tax return in their name, claiming the tax refund in the process. This scam tends to occur earlier on in the tax season so the scammer can get the funds before their victims have the opportunity to do so. Of course, you should always take great care with how you use your Social Security number and with whom you entrust that information, but it’s also a good practice to file early and protect yourself in this way.
For more reasons to file your taxes early, contact our team of tax prep specialists at MCG Solutions.