Introduction
Every year, many taxpayers face the same recurring issue – filing their taxes late. A late filing could result in penalties, unnecessary stress, and potentially missing out on refunds. This article aims to provide valuable insights into how early you can file your taxes and the benefits that come with it.
The Benefits of Filing Your Taxes Early
One of the most significant benefits of filing your taxes early is the potential to receive your refund sooner. With the average tax refund being over $3,000 for the past few years, getting your hands on this extra cash sooner can be a considerable help to your finances.
Filing your taxes early also helps you avoid the stress of last-minute filing. With ample time to prepare and submit your taxes before the deadline, you’re less likely to make mistakes and more likely to file your return correctly. Additionally, if you do find any mistakes, you’ll have ample time to find and fix them before the deadline.
What You Need to Know About the Early Filing Season
The IRS generally begins accepting tax returns each year on the 15th of January. It’s important to note that the IRS only accepts electronic returns during the beginning of the tax season. If you choose to file a paper return, you’ll have to wait until the 1st of February.
When filing your taxes early, you’ll need to make sure that you have all the necessary forms and documentation. The most common tax forms you’ll need are the W-2, 1099, and 1098. If you’re not sure which forms you need or where to obtain them, the IRS website is an excellent resource to start with.
Filing Taxes Early: Tips and Tricks for Maximizing Your Refund
To maximize your tax refund, you’ll need to take advantage of all the deductions and credits available to you. One of the best ways to ensure that you don’t miss any deductions or credits is by using tax software. Most tax software will guide you through the process and identify deductions and credits that you may be eligible for.
You may also want to consider working with a tax professional. Not only can they help ensure that you’re taking advantage of all available deductions and credits, but they can also help avoid costly errors that could impact your refund or result in penalties.
Early Filing and Fraud Prevention: How Filing Early Can Help Keep You Safe
Filing your taxes early can also help protect you from tax fraud and identity theft. Identity thieves attempt to file fraudulent tax returns in the hopes of receiving a refund. By filing early, you can beat identity thieves to the punch and submit your legitimate return before they have a chance to use your information for malicious purposes.
Keeping your personal information secure is critical when filing taxes online. The IRS recommends creating unique usernames and passwords for your online tax accounts and avoiding public Wi-Fi networks when filing your return.
What Happens When You File Your Taxes Early
After you file your taxes, the IRS will process your return and issue a refund if it’s due. The time it takes for the IRS to process your return and issue your refund varies depending on how you filed and when you filed. Generally, the IRS issues refunds within 21 days of receiving an electronic return.
If there are any issues with your return, such as missing or inaccurate information, the IRS will reach out to you. They’ll either send an email or contact you by phone, depending on how you filed your return.
The Pros and Cons of Filing Early
While there are many benefits to filing your taxes early, there are also several potential downsides to consider. For example, you’ll need to gather all your financial information earlier than usual, which may be challenging if you’re waiting for late-arriving tax forms or have a complicated tax situation.
Filing early could also result in owing additional taxes if you receive unexpected income or change jobs and update your withholding too late. Finally, there are opportunity costs to consider when filing early. By filing early, you’re potentially missing out on the opportunity to earn interest on any tax refund you may receive if you delay filing.
Conclusion
In conclusion, filing your taxes early comes with many benefits, including receiving your refund sooner, reducing stress and the risk of making mistakes, and safeguarding yourself from tax fraud. By keeping key tips and tricks in mind and weighing the potential downsides, taxpayers can best decide whether early filing is right for them.