Tax season is here! Most Americans have until April 18 to file a return this year or to request an extension. But why wait? Here are four great reasons for filing your tax return early, especially if you’re getting a refund.
You’ll get your refund faster. According to the IRS, the average refund nationwide is about $3,000. That amount of money can go a long way towards a down payment and closing costs on a home, especially if you qualify for a low-down payment or even a no-down-payment home loan.
It helps prevent ID theft. Another benefit of filing your return early is that it reduces your odds of becoming a victim of refund fraud, a fast-growing type of identity theft that happens when a criminal uses your Social Security number and other personal information to file a fraudulent tax return and obtain your tax refund before you file a legitimate return. Sounds pretty crazy, doesn’t it?
In recent years, the Internal Revenue Service has paid out billions of dollars in refunds later discovered to be fraudulent. The IRS is working to make it more difficult for criminals to participate in refund fraud. But it’s still expected to be a major problem this year. Refund fraud only works, however, if criminals file a tax return with your personal information before you do. If they file after you file your return, their request automatically will be denied. That means the earlier you file your return, the less of a chance you have of becoming a refund-fraud victim.
You’ll have less stress. Waiting until the last minute to prepare and file your tax return can be stressful. Get it out of the way early! Experts recommend filing early even in cases in which taxpayers owe money to the IRS. Filing early doesn’t mean you have to pay the IRS early; you can wait until the tax payment deadline to pay your tax obligation.
It’s easier to get help. The IRS and tax professionals are much more accessible early in the season instead of the time around the tax-filing deadline. Working on and filing your tax return early makes it easier to get help should you need it or if a problem arises.
Right now, you might be waiting on all the paperwork you’ll need to file your tax return. If that’s the case, just prepare as much as you can. When those final required pieces of documentation arrive, you will be ready to complete your return.