4 Reasons to File Taxes Early This Tax Season
Each December or January, it’s time to start thinking about gathering tax and financial documents, statements, and receipts because tax time is here!
Each year, the IRS announces the date it will accept returns… And it’s typically the second-to-last or last week in January.
While we know you could be concentrating on other tasks, it’s also time to start thinking about filing your taxes early.
Why? Here are a few reasons for filing early this year:
1 – Rushing through the deduction process
IRS data shows that taxpayers who file by mid-February get significantly larger refunds than those who file later—around $300 on average. Why? It could relate to waiting until the last minute and taking the standard deduction versus itemizing. The U.S. Government Accountability Office estimates taxpayers overpay taxes by over $1 billion each year by taking the standard deduction. Last-minute filers often skip itemizing deductions because of the time and effort required to gather supporting tax documentation. Waiting to the last minute and checking off the standard deduction could mean you are leaving money on the table.
Don’t put yourself in a position where you have to cut corners to meet the tax-filing deadline–simply file early!
2 – Help better protect your tax identity.
What actions can you take to avoid tax identity theft? Aside from monitoring your credit report, one of the best things to do to combat identity theft is filing early.
Thieves only need a name, Social Security number (SSN), and date of birth to file a fraudulent tax return. And, with a record high volume of personal data exposed from breaches (recent estimates indicate the number of people reporting that they were victims of identity theft was 376,000 in 2016.) Then, they take the stolen information to make up a W-2 and file a return claiming a big refund, deposited in a bank account of their choice – all electronically.
If someone does file a return using your Social Security number before you do, the IRS will reject the return since its records already show a return filed in your name.
Beat those crooks to the punch and file first. While it may not erase the threat of identity theft in the future, it can protect your refund because nobody can claim YOUR refund before YOU.
3 – Eliminate tax deadline stress
Procrastination leads to stress. Many people don’t enjoy doing taxes, so they stall any activity related to tax preparation. You have to gather tax documents from multiple sources, then complete IRS tax forms – which requires attention to detail and knowledge of the tax code. For those of us who don’t have the time or will to do this, it becomes a major stressor.
Here’s the good news — you have access to help. Block Advisors now offers clients an optional Appointment Readiness consultation to review your life situation and ensure all tax documents are accounted for before your tax appointment. You will also have access to a tax organizer checklist so you can make sure you’ve collected all essential documents, item-by-item.
If you work with a tax advisor early in the season, it will give you enough of a chance to make thoughtful decisions about your tax and financial strategies. Mistakes get made when you rush through the process of filing, which can trigger audits that can lead to penalties and interest.
4 – Avoid the rush and get quick access to a tax advisor
If you are a repeat procrastinator, here’s another reason to change your behavior this tax season… Between January and March, a little more than half of Americans file their taxes. Yet in the later part of the filing season, the remaining taxpayers wait until the last minute. If you file early, you will avoid having to compete with other late-in-the-season taxpayers – and you’ll likely have better luck getting the desired appointment time that works with your schedule.
Long story short, the best way to avoid hassle and take the time to really plan your tax strategy in the greater scheme of your financial goals, is to get an appointment with your tax advisor early in the season.
Get matched with a tax advisor in your area today!