The Benefits of Getting Your Taxes Done Early

Filing income taxes isn't exactly the most exciting thing in the world, so it's not surprising that so many of us put them off until just before the mid-April deadline.

But can you file your taxes early? Absolutely. You can and you should.

The best time to do taxes is actually right now. Even though this year’s deadline is April 18 for most taxpayers,¹ avoiding the temptation to procrastinate can pay off.

We’ve rounded up some benefits to getting your taxes done early, some of which may come as a pleasant surprise.

Advantages of Filing Taxes Early

• The sooner you file, the sooner you get your refund. Think about it: The average income tax refund for 2020 was $2,827.² Would you rather have that money now or later? The lump sum payment will also provide a welcome opportunity to pay bills, save for emergencies and more.

• More time to pay taxes you owe. If you owe money to the IRS, filing early gives you extra time to arrange your payment. An added bonus: If you’re short on the money you owe, you still have a window of time to gather the necessary funds — something you won’t have if you wait until April to file.

• Filing early is less stressful. The simple fact is that putting anything off to the last minute can increase the pressure you feel about it. The stress of filing your taxes could also be compounded by the fact it is required by law — and the penalties for missing the deadline are not cheap!

• Enjoy a lower risk of error. If you do your taxes in a rush, you’re more likely to make a costly mistake. This is important for anyone, but is especially relevant to people who might owe taxes to the IRS.

• Get more personalized attention from tax professionals. Later in the year, tax professionals become VERY busy, as more and more people try to make the deadline. While they’re professionals, they’re also human like you. Their increased client load may make them unable to focus on you and your unique situation as much as you’d like. (Some tax professionals may also offer discounts or other incentives to people who file earlier — so take advantage.)

• Filing early helps avoid identity theft. Avoiding tax refund fraud is one of the most important benefits of getting your taxes done early. The sooner you file your income taxes, the sooner you remove yourself as a likely target. Claim the refund you deserve and move on with your life — before anyone else tries to.
  
  Some impersonators will email or call their victims on the phone pretending to be the IRS. They may claim that the tax refund you received was a mistake and instruct you to wire it back (you’re really wiring it to them). The scammers will often make threats of arrest or other severe penalties to intimidate their victims.
  
  DO NOT fall for this. Check out these scam warning signs provided by the IRS, read up on the IRS’s Dirty Dozen list of tax scams and take steps to protect your identity.

What are you waiting for?

Start the new year right in just one afternoon: Gather the necessary information, make a pot of coffee and get your taxes done. Knowing you can file your taxes early sets you up to receive your refund and relax. You can then set your sights on other healthy financial goals for 2022.