We have entered the first week of February, and tax season began two weeks ago. If you have already prepared your tax return, pat yourself on the back. However, if you are like most Americans and have not even started, then you will want to get your return filed as soon as possible. Although you have two and half months before the IRS deadline, you may be surprised to see there are lots of advantages to getting your taxes prepared early.
1. Less Chance of Late Fees
If you file your return nice and early, the chance of having to pay a late fee is pretty much nonexistent. Just make sure all necessary documents and payments are included with your return to ensure there will be no return service required.
2. Avoid the Crowds
The last two weeks before April 15th tax preparation companies, accountants, and tax professionals become extremely busy. If you want to avoid waiting hours inside a crowded office then you should get your returns filed before busy season begins.
3. Time for Credit, Deduction Research
When you choose to prepare your return last minute, it can be too easy to miss a tax deduction or credit that could put extra money in your pocket. Starting early gives you enough time to relax and spend enough time on your return to find all available deductions and credits.
4. Reduce Stress
There is no denying that filing taxes can be stressful, and that stress is only likely to increase as the deadline gets closer and closer. Having your return filed early will reduce this stress, and allow you to relax while all of your friends and coworkers scramble to get their returns prepared.
5. Better Professional Services
If you have a trusted tax preparer – someone you have been going to for years – then you may feel comfortable waiting until the last minute to drop buy and get your tax return filed. However, the longer you wait, the busier accountants and tax professionals will be, meaning they have less time to focus on your return. This could result in a miscalculation, or overlooking a valuable deduction.
6. Faster Refunds
Obviously, one of the biggest advantages of getting your return filed early is the fact that can you get your refund faster. The IRS processes returns as they come in, and the sooner your return is there, the sooner it can be processed. Since most Americans wait until closer to the April deadline, your return will get processed quickly, and you will get your refund faster then if you had waited another month or two.
7. Post Dating
One reason many taxpayers choose to wait on their taxes is because of a lack of funds to pay their tax bill. Luckily, the IRS will allow you to post-date a payment until the April 15th deadline. Meaning you will have more time to put money into your account, without having to worry about a late fee from the IRS.
8. No Extra Paperwork
If you do wait until the last minute to prepare your return, you may have a last minute emergency, or realize you have forgotten something with no time to make a correction. You will then need to either file a request for an extension, or an amendment to your return, both of which result in extra unnecessary paperwork.
9. Time to Choose a Method
If you start your taxes early then you can chose to file your return on your own, or find a local tax specialist. However, if you wait until the last minute – when many accountants and tax offices are booked – then you may be forced to prepare your own return. This might be ok if your return is simple, but if your finances are more complicated then you could end up wishing you had gone to a professional. Fortunately, you can easily file an automatic extension with the IRS and get an additional six months to prepare your return.
10. Audit Prevention
The stress of filing a return at the last minute can often lead to a simple mistake such as a math error or accidentally underreporting your income. These types of errors are often audit red flags to the IRS, and should be avoided if possible.