If you always file your IRS taxes as soon as those W2s come in and then laugh at the procrastinators who hold back until April 15 draws near, you likely have your tax situation under control. The earliest day the Internal Revenue Service (IRS) will begin processing 2016 tax returns is January 23, 2017. What are the advantages to filing early? Here are five good reasons.
- Get your money now.
The main reason people file IRS taxes early is to get their refunds as fast as possible. According to Elaine Phelan, an accounting professor at Siena College, you’ll get your money faster if you file earlier than someone who files a month after you. Tax experts maintain that early filers wait an average of 21 days and sometimes less, according to the IRS – whereas a later filer may need to wait 31 days.
- Catch potential mistakes earlier.
If you dig into your taxes early and discover there’s documentation that you still need or that it will be a more complicated tax year than you’d originally anticipated, you might not be able to file early, but you will have more time to address IRS tax issues.
- Lessen your odds of identity theft.
Joe Reynolds, an identity fraud product manager at Travelers, says that, “The sooner you file your return, the less opportunity someone else has to file a return in your name.” Some criminals may break into a car or home, steal identity information and file IRS taxes in that person’s name – receiving a refund that doesn’t belong to them.
- Get help with feuds between your ex.
Hopefully you aren’t in this category, and it’s sometimes in your best interest to keep the IRS out of your marital issues, but sometimes divorced couples don’t agree on who’s claiming the kids as a dependent – even if an agreement or court order is in place. Whoever files first claims the child, and the other ex-spouse is unable to do so.
- Get help with financial aid.
According to Lawrence Pon, a tax specialist in San Francisco, “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 IRS and the Free Application for Federal Student Aid, so your tax information goes directly to the form without your needing to provide it yourself.
Also, by filing your IRS taxes in January, you’ll know if and how much you owe, and you’ll have more time to gather the money to settle your debt. Psychologically, filing earlier and getting it out of the way means checking something off your to-do list instead of letting it hang over your head.
Speak with an Enrolled Agent at Highland Tax Group, Inc. today to get your urgent questions about your IRS tax debt and IRS taxes (or other situation) answered to develop a smart strategy for 2017.