If you tend to wait until the deadline to file your taxes every year, you aren’t alone. According to the Internal Revenue Service, about one-third of Americans wait until the last minute to file their federal taxes. Despite the tendency to file late, there are many reasons to file your taxes early. It’s time to dig out those receipts and gather all your documents – here are five reasons to file early in 2023:
If you’ve overpaid your taxes and you’re expecting a refund, it makes perfect sense to file early. By filing early, you will likely receive your refund sooner because the IRS isn’t as busy in January, February or March as it is in April. There is less competition when you file so soon, as many people tend to procrastinate. The fastest method to receive your refund is to file electronically and have your refund deposited directly into your credit union account with direct deposit. It can take several weeks longer if you opt for a paper return.
First Come, First Serve
Hiring an accountant or tax professional to help you this tax season can be difficult if you wait too long. Their schedules can fill up by the time you reach out to them. If you aren’t completely confident when filing your taxes, hiring someone can help you accurately complete your form. They do charge, but there is potential for you to get more than what you paid back in refund form. They also can give you tax guidance throughout the year, stay updated on changing tax laws, find little-known tax deductions and more. Is it worth it to hire someone this tax season? That’s up to you. If you decide it is, you might want to set up an appointment now. And when you’re looking for someone to help, look for Certified Public Accountants (CPAs) or an Enrolled Agent (EA). An EA is a tax professional licensed by the IRS through a special enrollment exam or after working for the IRS for five years.
Prevent Identity Theft
The U.S. Government Accountability Office has reported that the Internal Revenue Service has paid more than $3.1 billion to individuals who have filed fraudulent returns using the identifying information of others over the past few years. As soon as a criminal gets access to your Social Security Number, they can do a lot of damage. If they file with your Social Security number before you do, the IRS will decline your return since their records show you’ve already been paid. You haven’t, but the criminal has been. It can take months to clear this up with the IRS. If you can, file your taxes early and prevent the fraudsters from successfully filing a fraudulent return.
Time is On Your Side
If you’re facing a tax bill instead of a refund, it can be equally important to file early. The earlier you file, the earlier you’ll know exactly how much you must pay. Also, you won’t have to pay in full until the filing deadline of April 18. With all the time you must plan, it’s less likely that you’ll have to drain your emergency funds or create an entirely new budget.
Filing taxes isn’t a fun and exciting task, and while you may want to put it off until the last minute, you shouldn’t. Everything so far has been about money, but what’s even more important than money? If you guessed your well-being, you’re correct! Filing early can help you eliminate the stress of a looming tax deadline.