Every year, February brings about the start of tax season. For some, the process may be quick and painless while others may spend months gathering the needed documents. Some may completely forget the fast approaching due date of April 18th (traditionally April 15th but for 2017 it is the 18th).
During tax season, procrastination can be one of your worst enemies. Waiting to file your taxes could cost you more money and have other implications down the road. Here are four reasons why you should think about filing early.
1. Avoid Identity Theft
According to USA Today
, 2016 marked the highest rate of identity theft ever. “An estimated 15.4 million consumers were hit with some kind of ID theft last year, up from 13.1 million the year before,” the article read. Surprisingly, counterfeit card fraud is down 52% in stores that are EMV card enabled
, which you would think means identity theft as a whole is down, but that is not the case.
One great way to combat a form of identity theft is to file your taxes early. There is a type of fraud where someone who is not you falsely files taxes under your social security number in an effort to receive a refund check. The IRS only allows one person to file taxes under each social security number. You can use this to your advantage by filing early, essentially locking out fraudsters with malicious intent.
2. You can avoid delays and headaches
Chances are if you start preparing your taxes early you should have more than enough time to file your taxes before the April 18th
deadline. If you’re filing yourself via online or other tools, the more time you have to look them over, the less likely you are to make a mistake. Catching a mistake can be the difference between a quick return and a long, arduous headache.
However, let’s say that you aren’t in line to get a refund. If that’s the case, you may owe money and filing your taxes early means that you will have time to get your funds in order. If you don’t pay the IRS before the due date you can request an extension; just be aware that there is the risk of paying penalties or interest charges.
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3. If you’re going to get a refund, you’ll get it sooner
Why? Because you will be ahead of the millions of Americans that are procrastinating! Plus, it’s your money; don’t you want it back as quickly as possible? I’m sure that all of us could use the extra money to make new purchases, pay off old debt, invest, or even save for a rainy day.
According to the IRS
, the average turnaround time for your refund is less than 21 days if you have e-file and do direct deposit. The longer you wait to file, the longer it takes to get your money back.
4. You need your return for other important items
If you’re a college student you know all too well that you will need your tax information to apply for financial aid. You can use your tax information from the previous year but then you have to remember to update it again down the road. You could avoid all that by getting your taxes done early and then use the most current information. The same goes for all kinds of applications. You can use last year’s return, but there’s always a chance your lender/landlord/employer/financial aid office, etc. will require updated tax information. Why not save the hassle of the additional back and forth by just getting this year’s return filed soon?
This blog does not represent actual tax advice. If your needs are specific or complex, you should consult a professional tax advisor. If it’s your first time filing taxes or you have general questions, check out Greater Nevada’s Financial Education Center.
There are free classes on everything from saving money, mortgages, and you guessed it, taxes!
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