Why Submitting This Year's Tax Return Early is Advantageous

Filing your tax returns can easily be a drawn-out, stress-inducing process, particularly if you have a complex routine that forces you to go through many different tax calculations on your end. The need for time to work out one's tax deductions is among many reasons why people tend to wait close to the traditional April 15th deadline before filing their returns.

To be fair, waiting until the middle of March before beginning the tax return process affords taxpayers additional opportunity to acquire the data necessary to put together return forms that only contain the most accurate information. If one filed a tax return significantly earlier than the deadline without knowing for sure that additional factors and relevant information about their tax responsibilities won't come to light afterwards, that person could well increase the risk that the IRS will audit them. That, of course, would amount to a potentially large amount of extra bookkeeping work that no one wants to contend with if they can avoid it.

If you have a solid grasp on the complexity and structure of your taxes as a whole, however, there are various reasons to consider filing your return form as soon as February. For 2018's tax season, tax returns can be filed from January 29th onward, and doing so at such an early stage can free your mind from the stress of constantly having to keep your impending tax return process on your mind over a time period spanning multiple months. Stress can be minimized so that you can better devote your mental focus to the other responsibilities of daily life.

Roughly four out of five taxpayers receive a significant tax rebate in any given year. In 2017, for example, the average refund was nearly $3,000 thanks to people's tax liabilities being significantly below what they paid. Taxpayers expecting a refund on that scale are incentivized to file their taxes earlier if they have a particular need for the IRS to mail them a check for that money early in the year. Assuming a successful electronic filing, it should take at most three weeks to receive the rebate.

However, your entire rebate will have to be delayed if you are intending to claim associated refunds such as the Additional Child Tax Credit and the Earned Income Credit. These refunds are common targets of fraud, which is why the IRS must withhold them until late February - and it will withhold the rest of your tax rebate alongside those until it can award you all components of your overall rebate together. Therefore, the end of February is the earliest point in which you can expect your rebate in this scenario.

If you are part of the small but unfortunate demographic of taxpayers who have accrued a significant underpayment, you will be penalized by the IRS if you miss your next tax payment deadline. Persons without any of the savings necessary to pay the IRS are likelier to face serious trouble if they wait until April to file their tax returns; this is because they may discover only at that point that they owe thousands of extra dollars because they accrued a tax debt from an underpayment that took place during the previous year. Beginning the process of forming one's tax return early, therefore, affords a struggling taxpayer an opportunity to discover this issue and work out how to earn the extra money within the time frame leading up to the deadline.

Finally, early filings of one's tax returns can amount to a surprising countermeasure against attempted tax fraud. Typically, perpetrators of fraud that gain access to their intended victims' tax data proceed to file returns under their victims' names so that they can seize the tax rebates that are supposed to be awarded to said victims. Once an unwitting victim sends in their own return, the IRS' software will consider it a duplicate return and refuse to award a second rebate, and it is often a stressful process on the part of the victim to take it up with the IRS and prove that the fraud happened. Adopting a habit of filing your tax returns early prevents criminals from taking your entitled rebates before you can.

Featured Articles

Helpful Strategies to Guide You Through a Financial Setback

No matter how well the economy is doing, a financial crisis can occur and cripple a family. Whether it’s due to a divorce, layoff, medical trauma or some other emergency, this type of personal upheaval can be debil...

Read More

Make Money with Ten Smartphone Apps That Pay You for Using Them

Did you know that you could earn some extra money only with a few clicks on your smartphone? There are multiple apps that can earn you a few extra cash and here is a comprehensive list of ten such apps. CheckPo...

Read More

5 Tips and Tricks to Maximize Your Walmart Clearance Savings

Walmart is well-known for its huge clearance deals, but that doesn't mean that getting these savings is as easy as looking for the 'clearance' tag. Oftentimes it's difficult to tell if you're looking at the best cle...

Read More

Saving Money During the Holidays With a Budget That Works

One of the best traditions every year for the holidays is shopping for others. On average, people in the United States spend over $1,000 for the holidays. This is a huge amount of money to spend. If you are not careful...

Read More