Filing your taxes long before the April 15 deadline might not be your top priority, but there are many benefits to completing your return early. By filing early:
- You avoid the last-minute stress,
- Have time to plan for paying taxes you may owe,
- You can get your refund faster and
- Avoid fraud by filling out your tax forms sooner rather than later.
1. The Earlier You File, The Earlier You Get Your Refund
- A good reason to file your taxes early you’ll get your money sooner.
- According to the IRS, the average refund was more than $2,800 for 2016 and 2017 Tax Filers…so why miss on that earlier claim and why give you an interest free loan to IRS?
- Every year taxpayers have too much tax withholds from their pay checks which means IRS is getting interest free loans from the tax payers. So it’s better to get your hard earned money back from IRS ASAP by filing your tax return early and put that money into your savings account, where it can start accruing interest for you rather than leaving it with IRS till the tax filing deadline.
- Getting refund early might also help you to pay your outstanding bills, credit card bills and other debts.
- The IRS begins accepting e-filed returns every year in the mid of January.
2. You’ll Give Yourself More Time To Pay Or Plan For Payment
- Filing early gives you an extra time to pay taxes you owe.
- Let’s say if you prepare & file your taxes in the month of January and determine how much you owe, you will get almost 2 & half months time to arrange your payments to IRS.
- It is not mandatory that you need to pay your taxes along with the tax return. You can file your tax return as soon as IRS opens the E-filing window and pay the amount you owe by the deadline (i.e., April 15th)
3. You Can Prevent Yourself From Tax Fraud
- The IRS estimates that millions of taxpayers were victims of Identity theft tied to tax returns every year.
- Most tax returns frauds occur early in the tax season. If thieves file a return using your Social Security number before you do, the IRS will reject your return since their records shows the refund has already been paid.
- If you are a victim of Identity theft, it’ll be on you to get things sorted out, which could not only delay your refund but also constitute a major headache. The IRS says it can take 120 to 180 days (or longer) to resolve tax-related identity theft cases.
- So if you file your tax return early and gets on IRS records, it makes it harder for thieves to file a second one and grab your refund.
4. You’ll Reduce Stress
- Early filers eliminate tax deadline stress.
- If you are up against the filing deadline, there is added stress of meeting the deadline. If you file early, you eliminate this stress.
- There’s always peace of mind from filing early.
- Once your return is filed early, 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.
5. Your Tax Preparer Will Have More Time For You
- By mid-March of the 2017 Tax Season (i.e. 2016 Tax Returns), 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.
- Early filers have greater access to their tax preparer. As the tax deadline approaches, your tax preparer’s schedule tightens. It is best to get on their calendar early when they have more time to devote to you and your return.
- Additionally, tax professionals often increase their fees as the tax deadline approaches. So waiting may also cost you more to have your return prepared.
6. Tax Returns Aid In Loan Documentation
- You may need your tax return to buy a home.
- Some lenders for mortgages may want to see a completed tax return as proof of income. Getting your tax return done early, whether you owe money or expect a refund, gives you a head start on the paperwork you will need for these processes and can reduce delays during the process.
7. File Early To Fund An IRA Before Tax Deadline
- If you file early and get a refund, you can use the same money to fund an Individual Retirement Account (IRA) before the April 15th deadline.
- Let’s say if you are eligible to get a deduction for IRA in your Tax Return but don’t have funds for the contribution before April 15th, the smart way to is to file your tax return early to get the refund and use the same refund for IRA contribution which would help you to increase your tax savings.
2017 Filing Season Statistics
IRS Cumulative Statistics comparing 04/22/2016 and 04/21/2017