Figuring out how much you owe at tax time and deciding whether you need help from a tax professional isn’t easy. Maybe that’s why so many of us procrastinate. But nailing all this down can take some time, so it’s best to start early.
The Benefits of Doing Your Taxes Early
What do you gain by filing early?
You’ll Get Your Money Sooner
If nothing else, by filing early you’ll give yourself plenty of time to make sure you’ve claimed every tax benefit you’re entitled to. And if you owe money? You’ll have more time to save up or figure out how to get your hands on extra cash if it turns out you owe money.
You’ll Have More Tax Provider Options
You may have an easier time finding a tax professional if you decide that you’re in over your head with all these calculations. Their calendars start filling up in March, increasing incrementally from there until the April 15 filing deadline.
You’ll Enjoy Identity Theft Protection
Submitting your tax return to the IRS as early as possible also offers protection: You might thwart would-be identity thieves. They sometimes file using someone else’s Social Security number in an effort to grab that refund for themselves. Later, the rightful Social Security number owner files their return, only to have the IRS decline it because someone has already used their number. The IRS accepts only one return per Social Security number per year.
You Can Plan for Next Year’s Taxes
Once your taxes are done, you’ll know if you’re getting a refund or if you are paying up. If you finish early in the year, you can adjust your withholding with your employer and have plenty of time for those changes to take effect.
So, what are you waiting for?
Next Steps and More Resources
You might need professional help with preparing your return, because each tax year tends to bring key tax changes with it. The next step is to understand what has changed for this year so you can get an early jump on filing for the 2021 tax year.
- Still not convinced? Here are five reasons to file your taxes early.
- Find out how long it will take to get your tax refund if you file your return as soon as possible.
- And if you’re not getting a refund—gulp—filing early will help you set up an IRS payment plan before the April 15 due date.