Even though employers are required to issue form W-2 by the end of January, the deadline to file your taxes doesn’t arrive until mid-April. This gives individuals a good three months to either work on or put off their taxes. And while many opt out to procrastinate on their taxes, there are many reasons why it is beneficial to file early.
- Save Money-If you think you may owe a significant amount for this year, then you will be better able to set aside money to pay the bill if you file early. This will help avoid penalties and interest from making a late payment.
- Reduce Stress-Gathering all the necessary documents to properly file your taxes can be time consuming. By planning ahead and staying organized, you will be able to reduce stress and give yourself more time to review your return of any error.
- Find good help easier-Tax season is the busiest period for qualified tax professionals and accountants. And if you wait until the last minute to file, chances are that these professionals will be hesitant to accept new clients. So by finding help earlier on, you will not only be more successful in finding good help, but also give them more time to devote to your return.
- Give yourself a grace period-Filing early gives you a grace period that can be beneficial in certain situations. For example, if you file early on and later discover that you have made an error, you will have time to correct that error. If you file late, and the error is discovered after the deadline, then you could face penalties and interest fee on any unpaid amount.
- Receive your refund sooner– Probably the biggest and the most obvious incentive to file early is that you will be able to receive your refund check faster. The earlier you file, the faster the IRS will process your refund than if you wait until April when the agency is flooded with returns by last-minute filers.
So even though you might want to wait until the last moment to file your tax return, you should realize that filing earlier on has several benefits, while procrastinating can only be detrimental.