What are the benefits of filing my taxes early?

what are the benefits of taxes

from daveramsey.com on 09 Jul 2012

Almost 75% of taxpayers get an income tax refund each year, and with the average refund closing in on $3,000, we can’t think of any reason to delay filing your taxes.

But, as awesome as it is to have more cash in your pocket, it’s not the only benefit of early filing. Here are a few more reasons to get your tax act together early in tax season:

Early filers average larger refunds.

Taxpayer surveys show that folks who file by the end of February get larger refunds than those who file later—almost $120 on average. Obviously, if you know you’re getting a refund, you’re more likely to file sooner, and that could be part of the reason early filers enjoy larger refunds.

But another reason is that the sooner you start on your taxes, the more opportunity you have to make sure you’re claiming all the deductions you’re eligible for. Studies show that while many taxpayers could get a larger refund by itemizing their tax return, they opt for the standard deduction (a faster, simpler process) instead. That shortcut costs taxpayers $1 billion each year.

Don’t put yourself in a position where you have to cut corners in order to meet the tax-filing deadline. Get started early so you have time to get the job done right.

Early filers simply have less stress.

Any time you face an unpleasant task, it’s best to get it out of the way as soon as possible. Income taxes are no different. You have to fill out the forms

and you have to file them, so just grit your teeth and get it over with.

Give yourself a fake deadline—well ahead of the April 15 deadline—to get your taxes taken care of. Once your return is filed, give yourself a small reward being so efficient and responsible. Then relax while everyone else stresses out about getting their taxes done on time.

Early filers who have to pay have time on their side.

When you’re facing an income tax bill instead of a refund, it’s natural to put off filing as long as possible. But if you go ahead and fill out your tax forms, you’ll know exactly how much you have to pay.

The more time you have to come up with the money, the less likely you are to bust the budget or drain your emergency fund to do it. So don’t spend the first of the year with your head in the sand. Get your goal, get your plan, and get that tax bill out of the way.

Early filers have more access to professional tax advice.

Procrastination and taxes are a terrible combination, especially when you want to work with a tax pro. Their schedules fill up fast, so if you haven’t set an appointment with a pro by the middle of March, you’ll probably have to file an extension.

On top of that, most tax pros will charge more to complete your taxes as the filing deadline approaches. The best way to avoid all that hassle is to get an appointment with your adviser as soon as possible.

Source: www.daveramsey.com

Category: Credit

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