Every year, many taxpayers wait until the very last minute to file their tax returns. What they may not know is that there are benefits to filing your taxes early. There are also benefits to filing early for those who owe money to the IRS.
1. Faster Tax Refunds
This is one of the most common reasons to file your taxes early. Filing your return digitally with direct deposit to your bank account will be the fastest way to receive your refund. If you file your taxes using a paper method, it can take up to several weeks or longer to receive your refund.
2. Extra Time to Pay Taxes You Owe
Even if you owe money to the IRS, you still have a reason to file early. Filing early can allow you time to arrange these payments and find out exactly how much you will owe to the IRS.
3. Obtaining Financial Information
If you are expecting a large expense such as buying a home or attending college, filing early can provide you with benefits. It can help you obtain essential information that you may need to file for financial aid or prove your household income.
4. Avoiding a Tax Extension
Some people who wait until the last minute to file their taxes end up needing extra time to look for added deductions or gather receipts. If you decide to file early, you can eliminate the need to file an extension.
5. Preventing Tax Return Identity Theft
Tax return fraud is when someone steals your Social Security Number to file a tax return in your name and steal your tax refund. This most often occurs early in the tax season, so if you file early, you can lessen your chances of becoming a victim to tax fraud.