6 Benefits of Early Tax Filing: Save Money, Reduce Stress, and More!

Many people wait until the very last minute to file their tax returns, even though there are advantages to tax filing early. If you’re expecting a refund, filing sooner means getting your money back faster. Even if you owe money, there are still benefits to getting your return submitted early.

The deadline to file your 2023 federal tax return is April 15, 2024, so if you haven’t started yet, now’s the time! Let’s explore why waiting until the last minute isn’t a good idea.

#Reason 1 – File Your Taxes Early and Get Your Refund Faster

Image Source – Finance Strategists

Did you know that filing your taxes early can put money back in your pocket sooner? Last year, two-thirds of taxpayers who filed on time received an average refund of over $3,000!

The IRS essentially holds onto your money if you overpaid throughout the year. By filing early, you can get that money back as soon as possible. Even a few months can make a difference. For example, if you receive your $3,000 refund in February instead of May, you could potentially earn an extra $30 in interest with a high-yield savings account offering a 4% annual percentage yield (APY).

Of course, you can also use that tax refund for unexpected expenses or other needs, like car repairs or home improvements. While the IRS has up to 45 days to issue your refund without any interest penalty, most refunds typically arrive within three weeks of filing. So file early and get your money back faster!

#Reason 2 -File Early Especially If You Owe Taxes

Filing your tax return early is even more important if you think you might owe money to the IRS. Even though the deadline to pay your taxes is April 15th, 2024, filing your return early gives you time to figure out exactly how much you owe.

This can be a big advantage. Imagine finding out at the last minute that you owe a large sum of money to the government! It’s much better to know well in advance so you can make a plan. With extra time, you can:

Budget for the tax payment by April 15th.
Explore options for setting up an installment plan with the IRS to spread out your payments.

#Reason 3 – File Early and Protect Yourself from Tax Identity Theft

Tax fraud is a serious problem, and criminals are getting bolder. The amount of fraudulent tax refunds the IRS identified skyrocketed from $16 million to over $800 million in just one year (between 2021 and 2022)! In this scam, someone files a tax return using your Social Security number to steal your tax refund.

The good news is there are steps you can take to protect yourself. Filing your tax return early is one of the best ways to prevent tax identity theft. By filing before anyone else can, you make it much harder for criminals to steal your refund.

#Reason 4 – You Can Take Advantage of Free Test Drives to Find the Perfect Tax Software

Did you know you can test-drive tax software before you pay? That’s right! Most popular tax services allow you to complete your entire return and see your potential refund or tax amount – completely free of charge. You only pay when you’re ready to file or need additional features, like one-on-one tax advice.

This is where starting your taxes early becomes a huge advantage. With extra time, you can try out different tax software programs and find the one that works best for you. Each service offers a unique interface, custom help features, and varying prices. Some programs may excel at handling specific tax forms, while others may offer different levels of support.

#Reason 5 – Get Help with Your Taxes if You Need It

Starting your tax return early allows you to see if you need professional help. If you encounter any difficulties while working on your taxes, you’ll have ample time to find a tax advisor before their schedules fill up.

Remember, free tax help from qualified professionals like John Geantasion CPA LLC and their team is also available. However, these resources become more popular and harder to secure closer to the tax filing deadline.

#Reason 6 – Don’t Let Taxes Stress You Out: File Early for Peace of Mind

Filing your taxes can be a real headache. In fact, a survey by TaxSlayer found that nearly a third (28%) of people would rather ditch their phone for a week than deal with their tax return! The tax code can be confusing, and even with good software, it’s easy to get frustrated or overwhelmed.

The key to a calmer tax season is to start early. By giving yourself plenty of time before the April deadline, you can avoid the last-minute rush. This way, you can take breaks when needed and come back to your return with fresh eyes, feeling more focused and clearheaded.

Frequently Asked Questions:

Ques. 1. Can I file my taxes for free?

Ans. Yes, you may be eligible to file your taxes for free through the IRS Free File program if your income is below a certain threshold. Many tax preparation software providers also offer free versions for simple tax returns.

Ques. 2. Is there a tax return calculator?

Ans. Yes, there are several tax return calculators available online that can help estimate your tax liability based on your income, deductions, and credits.

Ques. 3. How do I get a tax filing extension?

Ans. To request a tax filing extension, you need to file Form 4868 with the IRS by the original due date of your tax return. This form grants you an automatic extension of six months.

Ques. 4. How do I file my taxes?

Ans. You can file your taxes electronically through various tax preparation software, by hiring a tax professional, or by mailing in a paper tax return to the IRS.

Ques. 5. What is the IRS website for filing taxes?

Ans. The official IRS website for filing taxes and accessing tax-related information is www.irs.gov.

Ques. 6. Are there any tax filing courses available?

Ans. Yes, there are numerous tax filing courses available online and through educational institutions that can help you understand the tax filing process and maximize your deductions.

Ques. 7. Do I need a form to file a tax extension?

Ans. Yes, you need to fill out and submit Form 4868 to request a tax filing extension.

Ques. 8. Is the tax filing deadline different in California?

Ans. No, the tax filing deadline is typically the same nationwide, although certain circumstances may result in different deadlines for specific individuals or entities.

Ques. 9. How do I file taxes for my LLC?

Ans. LLCs can be taxed differently depending on how they’re structured. Most LLCs file taxes as either a sole proprietorship, partnership, S corporation, or C corporation. Consult with a tax professional to determine the appropriate filing method for your LLC.

Ques. 10. When is the tax filing deadline?

Ans. The tax filing deadline is usually April 15th of each year, unless it falls on a weekend or holiday, in which case it’s typically extended to the next business day.

Ques. 11. What are tax filing services?

Ans. Tax filing services are companies or professionals that help individuals and businesses prepare and file their tax returns accurately and efficiently.

Ques. 12. What is a K-1 tax form?

Ans. A K-1 tax form is used to report income, deductions, and credits from partnerships, S corporations, estates, and trusts to the IRS and to the individuals who are partners or shareholders in those entities.

Ques. 13. What is the tax filing deadline for 2024?

Ans. As of now, the tax filing deadline for 2024 is April 15th, unless otherwise announced by the IRS.

Ques. 14. What is my tax filing status?

Ans. Your tax filing status is determined by your marital status and other factors such as dependents. Common filing statuses include single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent child.

Ques. 15. What is a 1040 tax form?

Ans. Form 1040 is the standard individual income tax return form used by taxpayers to report their income, deductions, and credits to the IRS.

Ques. 16. What is an 1120 tax form?

Ans. Form 1120 is the U.S. Corporation Income Tax Return form used by corporations to report their income, deductions, and credits to the IRS.

Ques. 17. How do non-profits file taxes?

Ans. Non-profit organizations typically file Form 990 with the IRS to report their financial information and maintain their tax-exempt status.

Ques. 18. How do I file taxes for my business?

Ans. Business taxes are typically filed using specific tax forms depending on the entity type, such as Form 1065 for partnerships, Form 1120 for corporations, or Schedule C for sole proprietorships.

Ques. 19. How long should I keep my tax returns?

Ans. It’s generally recommended to keep tax returns and supporting documents for at least three to seven years, depending on various factors such as the types of income and deductions claimed.

Ques. 20. Where can I get help filing my taxes in person?

Ans. You can get help filing your taxes in person by visiting a local tax preparation office, seeking assistance from a certified public accountant (CPA), or visiting IRS Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites.

Ques. 21. What is tax filing software?

Ans. Tax filing software is computer software designed to assist individuals and businesses in preparing and filing their tax returns electronically.

Ques. 22. What is a 1099 tax form?

Ans. Form 1099 is used to report various types of income other than wages, salaries, and tips. It includes income from self-employment, interest, dividends, and more.

Ques. 23. How do I file taxes for my small business?

Ans. Small businesses typically file taxes using specific tax forms depending on their structure, income, and expenses. Consulting with a tax professional can help determine the appropriate forms and filing requirements for your small business.

Ques. 24. Can I file married but separate?

Ans. Yes, married individuals can choose to file separate tax returns, but it’s important to consider the implications and potential tax consequences of this filing status. Consulting with a tax professional can help determine the best filing status for your situation.