The end of the year is here, which means it is time for most Americans to begin preparing to file their 2019 income taxes. Of course, we have until midnight on April 15 to get it done without penalties, but waiting until the last minute adds expense and can lead to problems.
Financial experts advise taxpayers to shoot for filing by March 15, but people can file as early as mid-January if they have their W-2s.
4 reasons to file early
Each taxpayer has their challenges, but these are applicable for most of us:
- Saves money: The prices of tax software and the rates for accountants go up as the April 15 deadline approaches, particularly after March 15, accountants will add fees for expediting the process. Filing fees can also increase as the deadline approaches.
- Get that refund sooner: Those who file their tax refunds early, get refunds faster because the IRS is processing fewer returns earlier in the season. E-filing at any time also speeds up the process for getting that check and enables taxpayers to track their refund before they receive it.
- Avoids penalties: The IRS was patient last year with deadlines because it was the first under the new system. Doing one’s taxes early avoids late fees (5% of the total owed is accrued each month until a max of 25% is reached) and gives the filer time to fix mistakes or find information without being late.
- Avoids theft: This may come as a surprise, but there were about 300,000 cases of tax-related identity theft in 2017. This can involve criminals getting the victims’ tax info and filing fake tax returns where the fraudster pockets the return. Filing taxes early enables the taxpayer to beat the criminal to the punch – there is no refund to steal because it is already issued.
Disputes still possible
Those who file earlier may yet have disagreements over the amount owed or other tax-related matters. When this occurs, it is advisable to speak with a tax law attorney who can defend their clients and negotiate a fair and equitable solution.