Tax season is upon us, and the decision to start your taxes early can have several advantages. From getting your money back sooner to reducing exposure to identity theft, here’s why you should consider filing your taxes ahead of time.
1. Beat the Scammers: Protecting Your Identity
- Key Takeaway: Filing early can guard against tax-related identity theft.
Filing your tax return as soon as possible is one of the best ways to guard against tax-related identity theft. If you file your legitimate return before a criminal files a fraudulent one in your name, the fraudulent return is rejected. Remember, the IRS will never call or email you, so protect your personal information.
2. Fix Mistakes and Make Adjustments: Accuracy Matters
- Key Takeaway: Early filing gives you time to correct errors and make beneficial adjustments.
The earlier you file, the more time you have to sort out any mistakes and make adjustments that could lower your taxable income. Common mistakes include math errors, forgetting to report income, and not claiming eligible credits.
3. Take Stock for 2023 and Beyond: Plan Your Future
- Key Takeaway: Early tax preparation allows you to assess your financial situation and make wise decisions for the future.
Knowing where you stand well before the tax-filing deadline gives you time to adjust your current tax withholding and figure out contributions to traditional IRAs, Roth IRAs, and health savings accounts (HSAs).
4. Avoid “Sticker Shock”: Be Prepared
- Key Takeaway: Starting early helps you plan for any additional taxes due and avoid penalties.
The last thing you want is an unexpected large balance owed to the IRS. By starting your tax return now, you may find opportunities to lower your tax bill and avoid anxiety.
5. Get it Done: Peace of Mind
- Key Takeaway: Completing your taxes early can make other financial tasks seem easier.
People usually consider doing taxes one of the most onerous financial tasks of the year. Getting it done early could make all other items on your financial to-do list seem easier. Focus on the potential benefit, not the cost, and you may find motivation to file earlier.
Conclusion
Filing taxes early offers numerous benefits, from protecting against identity theft to giving you more time to correct mistakes and plan for the future. Whether you owe money or are due a refund, starting early can make your tax-filing season less stressful and potentially save you money.
