While early tax filing may not be the most enjoyable activity, there are several important reasons why you should file your taxes as soon as possible. Read on to discover seven essential reasons you should file your taxes early.
1. Avoid Late Filing Penalties
One of the most significant benefits of filing your taxes on time is avoiding late-filing penalties. The IRS imposes late-filing penalties if an individual or business files their taxes after the deadline. The penalty amount depends on how late you file, with a maximum of 25% of your unpaid taxes. Filing your taxes will help you avoid this costly penalty and ensure that your finances are in order.
2. Receive Potential Refunds Faster
Early filing of taxes is the best way to ensure that you quickly receive refunds from the IRS. The time it takes to process and send out your refund will depend on how long it takes for the IRS to approve your return – which can take several weeks or months if you wait until the last minute. However, filing as soon as possible means receiving your refund in a few days.
3. Avoid Additional Interest and Penalties for Unpaid Taxes
Another reason to file your taxes early is to avoid additional interest and penalties on unpaid taxes. If you owe taxes when filing but cannot pay them in full, filing early will help you avoid additional interest and penalties on unpaid taxes. The IRS will impose a late-payment penalty for any taxes not paid by the deadline, so it’s best to file and pay as soon as possible.
4. Allow Time to Fix Issues That Arise
When filing your taxes, there is always a chance that an issue may arise – such as an oversight or mistake in your return. If this happens, it’s essential to have enough time to correct errors before the deadline. Early filing of taxes allows extra time for fixing any potential issues without rushing through them at the last minute, and you can even consult with a tax attorney if you need to. This can save you from unnecessary stress and help ensure that your return is accurate.
5. More Time to Explore Deductions and Credits
If you delay filing your taxes, you may miss out on potential deductions and credits that could save you money. The early filing allows extra time to explore such options, so you can maximize your refund or minimize what you owe.
6. Greater Peace of Mind
Filing your taxes as quickly as possible will provide relief and peace of mind knowing that it’s done and taken care of well before the deadline. This peace of mind will help carry over into other aspects of life, as you’ll no longer be worried about the looming deadline.
7. More Time to Prepare for the Next Filing Year
Finally, early filing gives taxpayers more time to prepare for the upcoming year’s taxes. Once you have filed your current taxes, you can use the extra time to start organizing documents and receipts that could impact next year’s return.
Tax season may not be the most exciting time of year, but filing your taxes as soon as possible is beneficial in many ways. Early filing of taxes is not only financially beneficial but can also bring peace of mind knowing that’s one thing off your plate.