Every year, people put off filing their taxes until the last minute. It makes sense: tax season is often frustrating, worrisome, and confusing for some. Most people would rather not think about it until they have to.
However, there’s a strategy behind getting your taxes finished and out of the way early. Here are five reasons you’ll want to hop to it the moment the W-2s start rolling in.
1. Alleviate Stress
The peace of mind you get knowing that your taxes are handled rather than looming over you is hugely underrated. There’s no more worrying about gathering the correct documents, stressing over whether or not you have the correct calculations, or racing against the calendar to meet a deadline. Doing it right away takes a significant weight off your shoulders and allows you to focus on other things in your life.
2. Lower the Chance of Tax Identity Theft
Tax identity theft is a specific type of fraud that involves a person using your personal information to collect your refund, meaning they’re the one who gets the exciting summer vacation. The sooner you can secure your tax refund, the less likely you will experience tax identity theft. You don’t want to be a victim of this kind of fraud; it’s tampering with your personal financial information and affects your tax filings with the government, which you never want to deal with.
3. Get Your Refund Faster
The big reason people actually enjoy tax season is because they’ll see a considerable lump sum hit their bank accounts once they’ve filed. This will probably be the primary motivator for most people, especially once you learn that the IRS often processes returns as they come. That means those who file early are much more likely to get their refund faster than those who don’t. Having this amount in your account is highly beneficial, as it can help you budget for large expenses, pay off debt, or bolster your savings.
4. More Time To Pay if You Owe
If you find out that you owe taxes on April 14th, it’s considerably more anxiety-inducing than learning about it two months prior. Finishing your taxes in February gives you weeks to gameplan, budget, and move money around so you can pay your taxes when they’re owed and avoid expensive penalties for late payments or payment plans. Filing early is especially good for those who owe who potentially aren’t used to owing or who’ve had employment changes that could lead to them owing more than usual.
5. A Smoother Filing Experience
Tax season is extremely hectic, and since everyone is waiting until the last second, it’s considerably more stressful the longer you wait to file. Filing early makes scheduling an appointment with a tax professional a breeze. It also gives you more time to deal with any snags you might run into and collect the necessary documentation for an accurate filing and the highest refund amount. Tax preparation is time-consuming whether you’re using a professional or not, and rushing through it could lead to errors, which increases the odds of audits.
