Tax Time Will Be Here Before We Know It—Filing Early Can Be Crucial

source: BBC

Now that the holidays are over and we have officially embarked into 2019, it is time to start thinking about our taxes—tax day will be here before we know it.  However, many experts are suggesting that we file our taxes early, and they have a list of benefits to back up their suggestion.

The first and foremost reason to file your taxes early is the much-loved faster refund.  By not waiting until the last minute, and e-filing your taxes electronically, you will receive your refund at a much faster rate.  It can take up to several weeks longer when filing a paper return. 

Another benefit of filing early is if you happen to owe taxes you will know exactly how much and will have time to pay them.  By filing in January you will have the total taxes you owe, but you will not have to have them in until mid-April.  This will help you get them together over the four months, and not be such a strain on your finances.

Many are not aware that by filing early if they are going to purchase a house or go back to school, their early file can be a crucial piece of the puzzle.  If you or a child need to apply for financial aid, your tax return will be proof of income when submitting your paperwork.  Or if you are planning on purchasing a home your proof of income will help the lender get you the best rates.

The dreaded file extension, that in the end can cause more headaches than not, can be totally avoided by filing early.  If you are one that waits until the last minute and should happen to need to file an extension, and for some reason do not pay what you owe, the IRS will tack on penalties and fees until the balance is paid in full. 

Lastly, by filing your returns early, you are heading off the chances of tax return identity theft.   This will usually occur early in the filing season, with most taxpayers unaware of the possibility.  Once an identity thief gets hold of your social security number, they can file a tax refund in your name, and receive your refund.  It is crucial to keep your Social Security number safe and guarded, and filing early is one more step toward that security.

These are just some of the reasons why it is in your best interest to file your taxes early this year.  Look at it this way—the sooner your taxes are filed, the sooner you will be able to enjoy the rest of your year without it hanging over your head.

So, what’s the verdict—you decide.

Do you file your taxes early in order to get them out of the way for the year?