Even though the deadline to file your taxes is April 15th waiting until April to start on your taxes might not be a smart financial strategy. There are a few reasons why should be working your taxes right now, even if you will have a tax bill to pay.
What is the most beneficial reason for filing your taxes early?
If you are getting a refund you will have your money much quicker. The IRS started taking returns about a week ago and most people will see their refund in 14 - 21 days if they use direct deposit. Waiting later to file could increase the time it takes for you to get your refund.
What impact with the tax break have on refunds?
For many there might not be any change if they or their employer automatically adjusted their tax withholdings for the year. If someone kept the same amount of tax withholding as in 2018, they might expect a $1,000 to $2,000 difference in their refund amount.
Are there other benefits to filing early?
Another really important reason to file early is that it can help lessen your risk of tax identity theft and fraud. Stealing someone’s identity and filing a return in their name is a growing problem and if you file early, you eliminate the possibility of your tax return being filed fraudulently because your return is already filed.
If you have a more complicated return, does starting early have any benefits?
Yes, if you have several investments and other unique tax situations starting early allows you to determine all of the information you need and have time to find that information. And, if you start early and need tax advice or help, you are more likely to find assistance.
Should you complete your taxes early if you know you are going to owe taxes?
Yes. The biggest benefit is that if you file early but delay the payment until April 15th, you will know how much you owe and will have nearly three months to find the money to pay your taxes. Usually that means you will find better options that don’t have as great as a financial impact.
Are there any reasons to not file your taxes early?
The only reason to not file early is that you may not have all of your required tax documents especially if you have a complicated return. You don’t want to have to amend your return if new documents come in however, you do want to start early so you have plenty of time to find all your documents and get help.