Editor’s note: This post is provided by Dave Ramsey, a personal money-management expert and extremely popular national radio personality. His seven best-selling books have sold more than 10 million copies combined. INB Senior Vice President Chris Parks, CPA, is the Dave Ramsey-endorsed local provider for tax services in Central Illinois. Schedule an appointment today with Chris or call 217-679-1676.
With over 111 million taxpayers receiving an income tax refund averaging $2,900 last year, we can’t think of any reason you’d want to delay filing your taxes. But, as awesome as it is to have more cash in your pocket, that’s not the only benefit of early filing. Here are a few more reasons to get your act together early this tax season:
1. Early filers average larger refunds.
IRS data shows that taxpayers who file by late-February get significantly larger refunds than those who file later—around $200 on average. Obviously, if you know you’re getting a refund, you’re more likely to file sooner, and that could be part of the reason early filers enjoy larger refunds.
But another reason is that the sooner you start on your taxes, the more opportunity you have to make sure you’re claiming all the deductions you’re eligible for, which takes more time and documentation than claiming the standard deduction.
2. Early filers can protect their refunds from identity thieves.
Filing early may not eliminate the threat of identity theft, but it can protect your refund. If thieves file a return using your Social Security number before you do, the IRS will kick out your return since their records show you’ve already been paid. It can take months to clear up the mess with the IRS and finally receive your refund.
3. Early filers eliminate tax deadline stress.
Any time you face an unpleasant task, it’s best to get it out of the way as soon as possible. Income taxes are no different. You have to fill out the forms and you have to file them, so just grit your teeth and get it over with. Give yourself a fake deadline—well ahead of the April deadline—to get your taxes taken care of. Once your return is filed, give yourself a small reward for being so efficient and responsible. Then relax while everyone else stresses out about getting their taxes done on time.
4. Early filers with a tax bill have time to make a plan.
When you’re facing an income tax bill instead of a refund, it’s natural to put off filing as long as possible. But if you go ahead and fill out your tax forms and file them, you’ll know exactly how much you have to pay—and you won’t have to pay in full until the April filing deadline.
The more time you have to come up with the money, the less likely you are to bust your budget or drain your emergency fund. So, don’t spend the first part of the year with your head in the sand. Get the facts about what you owe, make your plan, and get that tax bill out of the way.
Tip: Save time and reduce hassle by gathering the right paperwork the first time around. Download your free tax preparation checklist.
5. Early filers face less competition for access to their tax professional.
By mid-March of the 2018 tax season, nearly 78 million people had already filed their income taxes. That left the remaining 77 million people just one month to file theirs by the deadline. If you were one of those procrastinators, you found out the hard way that it’s tough to get on a good tax pro’s schedule during crunch time. In fact, if you haven’t set an appointment with a pro by the middle of March, you’ll probably have to file an extension.
On top of that, most tax pros will charge more to complete your taxes as the filing deadline approaches. The best way to avoid all that hassle is to get an appointment with your advisor as soon as possible.
To connect with INB’s Chris Parks – the endorsed local provider for tax services in Central Illinois -- call 217-679-1676 to schedule an appointment.