One of the lessons I’ve learned in my adult life is not to procrastinate when it comes to filing my taxes. Yes, the Internal Revenue Services gives us until April 15th to get all of our documents in order but we don’t have to wait until the very last minute.
The first reminder to file early arrived in an email from the public relations team of 1040Return.com. “It’s always better to file early and get that big task off of your to-do list,” 1040Return.com’s founder and tax practitioner, John Gregory, explained.
1040Return.com generally works with small businesses and people who are self-employed. So if you own a cute little vintage clothing store, or if you’re an emerging artist that had a profitable year, or a freelance journalist, then you may want to check them out.
1040Return.com generally works with small businesses and people who are self-employed. So if you own a cute little vintage clothing store, or if you’re an emerging artist that had a profitable year, or a freelance journalist, then you may want to check them out.
Even if you are not an independent contractor or small business owner it’s still important not to drag your feet when it comes to your taxes. There are several benefits if you get on the ball and file early. Doing so may give you financial advantages in more ways than one.
Here are Gregory’s six reasons why you should file your taxes sooner rather than later:
- Quicker Refunds: Filing your taxes early is a good move especially if you have refunds coming. In case the amount you paid exceeds your actual taxes, the IRS refunds you the difference. Early filing, say during mid-January, the official date for commencing the processing of tax returns being January 20th, helps you get your refund at the earliest. The early birds usually get their refunds within 21 days after filing their taxes but they can come back as quick as three days.
- Cut Down on Identity Theft: The incidents of identity theft are often higher during the tax season. The perpetrators can file taxes in your name with a phony address and your money goes to them. They will just need your name and social security number to execute the scheme. If you file your taxes ahead of time, you save yourself from being the victim of identity theft. The odds of that happening to you might be low, but there’s no reason to take the chance.
- You May Owe Taxes: Early filing gives you a lot of time to plan for paying off the balance due in case it turns out that you owe the IRS. Preparing your 1040 Form early will give you an advantage if you are yet to discover how much taxes you are supposed to pay. You will have plenty of time till mid-April when taxpayers are supposed to pay off the balance due to the IRS. This will certainly help you circumvent the hassle of arranging funds in the nick of time.
- Boosts your Financial Aid: This is a important factor for those whose families want to apply for financial aid for their children's college tuition fees. Filing your taxes early helps maximize the amount of financial aid your children would receive. Initially, you need to fill the Free Application for Federal Students Aid, or FAFSA, within a tentative amount of time. When you file the taxes, the correct amount gets automatically imported into the FAFSA from the IRS through the data retrieval system that they have in place. Simply put, the authorities will have more funds at their disposal in the beginning to help the first comers with.
- Find a Good Tax Preparer: Preparing taxes is not everyone’s cup of tea. The laws, procedures and documents are very complicated. If you don’t do your taxes, you will need some time to find yourself a tax professional. Make sure you choose a certified tax preparer who handles filing of taxes all through the year. This is important because you will be paying the tax preparer to file your taxes diligently and correctly. Any errors and delays in the filing of taxes can invite fines; even worse, audits. So take your time to find a reliable professional who will not only do their job well, but also take responsibility and make amends should anything go wrong.
- Reaping the Benefits before Your Ex-Spouse Does: This reason plays a significant role in the case of divorced individuals. You definitely don’t want your ex-spouse to gain financial benefits at your cost, now do you? No matter whom the court awards the custody of the children, the IRS will treat the children as the dependents of whoever files heir taxes first. So if you have had a divorce and have children, file your taxes early. This will help you avoid significant tax bites.
The one thing I would like to add to Gregory’s last advice is that if the children lived with the custodial parent for six months or more, the custodial parent has the right to claim the children on his/her taxes. I’ve been there … my ex filed before me and he got the earned income credit on our children, even though I had full custody the second half of the year and going forward. Since then, I’ve always filed my taxes early.
Gregory warns that there is one major downside of filing taxes early. The government could make changes in the tax laws, documents and procedures. If this happens your tax preparer should be able to walk you through the specifics
Gregory also suggested that if you want to get your refund quicker, you should electronically file, or e-file, your taxes instead of sending them through the mail. When you e-file, you have an option to receive your refund through direct deposit instead of getting a paper check in the mail.
To find out more about preparing your taxes visit 1040Return.com
I also recommend just heading over to IRS.gov to get all of the information that you may need.
Do you have any early tax tip advice? Share them in the comment box below or e-mail them to tcsviews@gmail.com.
- @TCsViews
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