Advantages of Filing Your Taxes Early
Did you know, besides getting your potential tax refund faster, there are several advantages to filing your taxes early?
With W-2’s out the door and tax season officially in full swing, you’re either ready to file your tax return or you’re looking at the calendar determining just how long you can put off this tax task. If you’re in the tax procrastination camp, the advantages below may convince you to file your taxes earlier.
Advantage 1: More Availability With Tax Professionals
While April 18th feels far away, that looming tax filing deadline will be here before we know it. On paper, tax season appears to have plenty of time, but if you need help or drag your feet getting documents around, you could have a hard time filing on time. If you go to a tax professional to get help with taxes, scheduling an appointment is going to be much more difficult the closer we get to the deadline.
We spoke to CPA and SurePayroll customer, Matthew Weissman. He advised getting an appointment on the books by the middle to the end of February. This will give you and your tax preparer plenty of time to iron out important details and file your taxes early. Another advantage of filing your taxes early is you have more time to fix any mistakes.
Advantage 2: More Time to Fix Mistakes
Filing taxes is complicated. When filing taxes on your own it’s easy to make a mistake, such as entering a wrong number or forgetting to claim something you missed. While some tax mistakes are minor, others can wind up costing you hefty fines or other tax penalties. The IRS provides a helpful breakdown of the most common tax mistakes people make when filing taxes. The good news is if you file your taxes early and then catch a mistake, you have more time to correct it and still meet necessary deadlines.
Advantage 3: Less Stress
Life is full of stressors. if you don’t file your taxes early, you could face stress when it comes to not getting the appointment you need with a tax professional, late fees for not filing on time, or more. Filing early can reduce all of those extra headaches and give you some breathing room.
To reduce tax season stress year-round when it comes to tax season, there are some things you can do throughout the year to stay organized and get prepared. For example, regularly storing business receipts in a safe place, scheduling frequent meetings with an accountant or bookkeeper throughout the year can be good places to start. Little things like keeping receipts can be done throughout the year and will save you plenty of time and headaches when you’re searching for a receipt for something that happened early on in the previous year.
In the midst of tax season, one way to reduce stress is to plan to file an extension. In our previously mentioned interview with Matthew Weissman, he acknowledged that just because this is the time of year to file taxes, doesn’t mean it’s the best time for you or your small business. This could be your business’s busy season, or you may find yourself dealing with unavoidable personal issues. For those reasons, if you aren’t in the headspace to properly file your taxes early, choosing to file a tax extension is a great idea to buy you a little extra time. Just remember to be aware of that deadline so you don’t miss it when it approaches.
Advantage 4: Less Chance of Identity Theft
Hackers and identity thieves are everywhere. With important information such as your Social Security Number and bank account floating around, tax season is a time when hackers are on the hunt for identify theft. The earlier you file your taxes, you can avoid somebody trying to steal your identity and claim on your behalf. Someone who files their taxes early will already be in the system as processing a refund or already have their refund. Then if someone tries to illegally access their account, the system will kick them out.
Today there are many different types of tax scams, and they can carry on long past tax season. The IRS has a Tax Scams/Consumer Alerts page that gives you more information on various scams.
Fast Five: Questions About When to File Your Taxes
There are a lot of advantages to filing your taxes early, but here are five quick answers to other questions you might have about filing your tax return.
- When can I start filing taxes for 2021? The IRS will begin accepting and processing 2021 tax returns on Monday, January 24, 2022.
- When is the best time to file your taxes? Filing early leads to a lot of benefits (as mentioned in this article.) However, filing by the April filing deadline may not be the best time for your business for a number of reasons. If necessary, you can file for a tax extension. Just remember, a tax extension request also has a deadline of Monday, April 18, 2022.
- Do you get a bigger tax refund if you file taxes early? Maybe – but not because of your filing date. People who tend to wait to file their taxes are more likely to make a mistake such as missing valuable credits and deductions. People who file earlier, have a greater chance of identifying errors and correcting them before the deadline which can lead to a larger tax refund.
- What happens if you miss the deadline to file your taxes? If you are getting a refund from the IRS, there is no penalty for filing late (note: this may differ for state and local taxes). If you owe outstanding taxes to the IRS, you will likely accrue late penalties that go up each month your bill goes unpaid, and you may also owe interest on your unpaid balance.
- Will the IRS extend the tax deadline again in 2022? While the deadline had been extended for 2019 and 2020 filing, the 2021 tax deadline has not been extended. The current tax deadline is Monday, April 18, 2022.
While there are many benefits to filing taxes early, there is one more thing you should keep in mind; don’t file early if you’re not prepared. It won’t do you any good filing early if you aren’t sure you have all of the proper information you need. Rushing also leads to mistakes that you could avoid if you slow down. Take the time that you need to get tax filing done right, even if that takes the form of an extension.
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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.