Everyone has heard the saying, “the early bird gets the return” (well, most of you say worm, in tax talk, it’s return). Of course getting that return sooner is quite tantalizing, but there are other reasons why you should file your taxes sooner rather than later.
First of all, let me clarify what “filing sooner” means. I don’t mean to rush to file just as soon as your W-2 comes in and risk making mistakes. By rushing, you could miss valuable tax deductions or overlook mistakes and understate your income. Making a silly mistake like this could end up costing you big in the long run—either in time, or money, or both. What I do mean is plan early. When tax season is approaching, go ahead and look over your previous year’s tax filing. Ask yourself a few simple questions like—have you changed jobs? Did you open a new investment account? Have you had additional sources of income? By thinking about the answers to questions like these, you are anticipating changes that will take place in your filings for this year. Gather as much of the paperwork that you can prior to the arrival of your W-2. Then, when your W-2 arrives, you’ll be all ready to go! You’ll just have to click or write a couple of numbers in or seal everything in an envelope and drop it off to your trusty accountant.
Now, on to why filing sooner rather than later is better. First of all, the IRS expects you to have your taxes all wrapped up and submitted by April 15. Of course, you can have everything completed well before then, but if you haven’t officially filed your taxes by April 15 or filed for an extension, expect some love from the IRS in the form of penalties and fines. By filing early, you can beat the deadline and the rush and headache that comes with last minute filing.
Secondly, if you paid more than your fair share to Uncle Sam, you probably want that money back. The sooner you file your taxes, the sooner you can get that tax refund. Also keep in mind, you can further speed up the refund process if you opt for your refund to be direct deposited into your bank account instead of mailed to you by paper check.
Finally, by filing early, you can significantly reduce your chances of being a victim of tax fraud. In light of the Equifax data breach and its effect on nearly 150 million people, many filers are on edge. In the data breach, millions of social security numbers were leaked which paves the way for criminals to fraudulently file a return and steal your refund. How does filing early lessen your chances of being a victim? Well, the IRS uses social security numbers on tax returns to identify filers. The IRS will only accept one return per social security number. By filing your return early, you decrease the chance that an identity thief can use your social security number to file a fraudulent return and keep the refund for him/herself.
Tax season is stressful enough as it is. You’ve just finished with the holidays and all the craziness that comes with them. The thought of trying to file taxes even earlier is enough to give anyone heartburn. Wealth Builders CPAs & Consultants can help. Let us take the heartburn out of tax season for you! Our team of experts has YEARS of tax experience. We can help you file early so you can get that refund sooner and protect yourself from identity theft in the process! Plus, it doesn’t hurt that we have a proven reputation of decreasing our clients’ tax liabilities and increasing their cash flows. Call us today for a free consultation!
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Grant, Kelli B. “Your Next Worry After the Equifax Breach: Fake Tax Returns.” CNBC, 19 Sept. 2017, 8:31AM, www.cnbc.com/2017/09/18/your-next-worry-after-the-equifax-breach-fake-tax-returns.html.