Benefits of filing your tax return early

posted in: Income Tax, Tax Consulting | 0

With nearly 75% of tax returns showing a refund and with an average refund of just under $2900, there are many reasons to get your tax return filed early.  Below, we explore 5 reasons to get started on your tax return as soon as possible.

  1. Early filers tend to have a larger refund.  Of course, when you file your return does not affect the amount of your refund.  However, when facing a deadline, tax payers tend to spend less time gathering and reviewing information.  This often leads to taking small deductions than would be allowed and therefore small refunds.  For example, about 2 out of 3 return filers claim the standard deduction rather than itemizing deductions.  This leaves money on the table.  Don’t put yourself in a position where you have to cut corners in order to meet the tax-filing deadline. Get started early so you have time to claim all of the deductions that you have coming.
  2. Early filers with a tax bill have time to plan on how to pay it.  Even if you do have a balance due, it still makes sense to file early.  Even if you have a balance due, you still have until the tax deadline to pay the bill.  This gives you time to plan on how to pay the bill, eliminating stress on your self as well as your budget.
  3. Early filers eliminate the deadline-induced 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.
  4. Early filers can protect themselves from identity theft.  According to the FTC (Federal Trade Commission), the percentage of all ID theft incidence related to tax returns rose from 15% to 43% of all ID theft cases.  If someone steals your information and files a return on your behalf, you are no longer able to electronically file your return and you must convince the IRS that the other return is a phony.  This will delay your refund months!  So, file early and avoid this possibility.
  5. Early filers have greater access to their tax preparer.  As the tax deadline approaches, your tax preparer’s schedule tightens.  They do not have as much time to spend with you answering your questions and suggesting ways to cut your tax bill.  It is best to get on their calendar early when they are fresh and 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.

With these 5 reasons, it is easy to see why it is best to get started on your tax return as soon as you are able.