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Reasons to File Early

By Shanta on January 15, 2014 in Resources, Services, Tax Advice
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Get you refund now

One of the most common reasons to file taxes early is to receive a faster refund. Filing your return electronically with direct deposit into your bank account is the fastest way to get your refund. It can take up to several weeks longer for paper returns, so it is always better to e-file a return if you want to receive your refund quickly.

Apply for financial aid

Taxpayers with college-age children need to get their tax information early to get the maximum amount of financial aid. There is a direct link between the Free Application for Federal Student Aid form and the IRS, so your tax information is sent directly to the financial aid form without you having to provide it yourself.

Extra time to pay balance due

If you owe a balance due to the IRS, you may still have a good reason to file your return as soon as you can. If you submit your return in the middle of January, you do not have to pay your balance due until the filing deadline in mid-April. Filing early will give you time to arrange your payment. This extra time is particularly helpful to taxpayers who need to find out exactly how much they will owe the IRS

Avoid Identity theft

You’ll lessen your odds of becoming a victim of identity theft. The sooner you file your return, the less opportunity someone else has to file a return in your name.

Purchasing a home

If you are expecting a big life change such as purchasing a house or returning to college, preparing your tax return early can help you obtain essential information. Prospective homebuyers often have to show their completed tax return as proof of their household income. Getting your tax return done early whether you owe money or expect a refund gives you a head start on the paperwork you will need for these processes.

Avoiding an extension

Filing your tax return early may help eliminate the need to file an extension. Extensions of time are often required as a result of disorganization more than financial need. Even worse, if you file an extension and you owe a balance due, the IRS will charge you interest and penalties on the outstanding tax debt until it is paid in full. Preparing your tax return early in the year helps you avoid this situation.

 

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ShantaView all posts by Shanta