Many taxpayers leave it until the very last minute to file federal tax returns every year. There are many reasons why you should file your tax returns early, despite this trend.
Also, you should know how long to keep your tax returns? You may want to file your tax return as soon as you can if you expect to receive a refund. Even if you have a balance, it is a good idea to file taxes early.
You will get your refund quicker if you file your tax returns sooner than usual. The electronic filing of your return with direct deposit to your bank account is the fastest way to get your refund.
- If you send your return by post, it can take up to eight weeks to complete. If you need to get your refund quickly, it is better to file electronically (e-file).
The IRS Internal Revenue Service began accepting electronic returns in April. February 12.
Give yourself more time to pay what you owe
You may be able to file your tax return quickly if you have an outstanding balance with the IRS. If you file in mid-January, you won’t have to pay your balance until the submission expires in mid-July.
You will have time to request a payment plan by preparing your 1040 form early. For taxpayers who want to know exactly how much they owe, this extra time can be very useful.
Obtain financial information
If you’re hoping for a big life change like buying a home or going back to college, preparing your taxes early can help you gain essential information.
College students use the information on their 1040 form to apply for financial aid, while potential home buyers often must show their completed tax returns as proof of income. You can save time and get your taxes done early, regardless of whether you owe money or expect to receive a refund. Potential home buyers often need to show their tax returns as proof of income.
Do not extend
Filing your tax return early can help eliminate the need to file an extension. Sometimes, time extensions are required due to disorganization and not financial need. People who delay filing their taxes until the last minute may simply need more time to find deductions and gather receipts.
- You should not delay the filing deadline. This will increase your chances of needing the assistance of a tax professional in order to organize your finances and complete the return.
- Worse, if you file an Extension and still have a balance to pay, the IRS will charge interest and penalties until you pay it all.
- This situation can be avoided by preparing your tax return early in each year.
Prevention of identity theft
Once a criminal has your Social Security number, they can file a tax return under your name. The purpose of a fraudulent tax return is obviously not to pay your back taxes but to pocket or steal your tax refund. This identity theft scam usually occurs early in tax season, long before most taxpayers file their returns. Keep your social security number (SSN), secret and file your taxes as soon as possible.