Millions of Americans rush to pay their taxes to the Internal Revenue Service (IRS) as the April 15 deadline approaches. Whether you are a senior citizen with some wealth or a college student, there is no way out of this yearly exercise. All adults, and occasionally children as well, must file taxes if they receive any money from part-time employment over the holidays.
It makes sense that the IRS is highly forgiving when it comes to assessing adolescents and teenagers with taxable or even non-taxable income and is quite flexible in how it applies the tax laws.
Strange as it may seem, anyone earning $13,850 a year must submit an income tax return to the IRS. This requirement occasionally puts most students who work summer or vacation jobs under tax coverage, especially when it comes to high-paying work-from-home online businesses like blogging and vlogging. Children who own assets and receive interest of that amount or more are likewise subject to taxes.
Millions of Americans put off filing their taxes until late March or early April. All right, so long as you can finish these procedures before the April 15 deadline. However, you may lose more benefits the later you file your taxes.
Yes, you are correct.
To put it simply, there are five excellent advantages to filing taxes well in advance of the April 15 deadline.
5 Amazing Advantages of Early Tax Filing
What are the five incredible advantages that early tax filing can truly offer? These aren’t just any benefits that the IRS offers to its tax preparers or centralized systems, which are often overworked during tax season. Rather, these are actual, palpable advantages that you would not have been aware of.
Doesn’t it sound interesting? Let’s get started.
1. Prevents Identity Theft
In 2024, more than 9% of Americans over 16 were victims of identity fraud, according to the Federal Trade Commission. This amounts to a total loss of $12.5 billion for 23.9 million Americans. According to the Department of Justice and other agencies, this sum was lost as a result of false credit card purchases, tax refund claims, and Social Security crimes.
To have the refunds credited to their account, identity thieves typically file their tax returns early.
Early filing allows you to receive these refunds into your account and makes it simple for both you and IRS officials to identify any additional claims or tax filings made in your name. You can avoid being a victim of identity theft or fraud and pursue appropriate legal action against criminals by submitting your tax returns on time. Additionally, it can assist you in recovering any losses from credit cards that were issued to scammers using your name.
2. Quality Time with Tax Preparers
One important step in the tax filing process is working with IRS tax preparers. You can spend enough time with tax preparers who can show you how to optimize your returns if you file early. Additionally, they can assist you with tax preparation. Early in the year, tax preparers are less hurried, which may lead to fewer errors.
Filing early helps lower the danger of preparation errors that could cause refund delays or even audits.
Additionally, if your tax position is complex, possibly involving business income, investments, or other specialized issues. As a result, filing early allows your preparer enough time to handle any complications and fix any problems before the deadline.
Additionally, it allows them enough time to carefully examine your financial status, ensuring correct filings and optimizing credits or deductions that you may otherwise miss.
3. Bigger Tax Refunds
Yes, you may receive larger returns if you file your taxes with the IRS early. Before I go any further, let me clarify that the IRS does not provide any special treatment or advantages just because you file early. The IRS offers no incentives for early filing. Although timing helps, your taxable income, tax liability, and any qualifying credits or deductions will ultimately decide the size of your refund.
However, there are two primary reasons why filing early allows for larger returns. You have more time to carefully examine your return if you file early. This reduces mistakes or omitted deductions that could otherwise cause your refund to be delayed or reduced.
Second, if you file early, your return will be processed sooner, and if you are eligible for a refund, you will receive it sooner. Because the IRS isn’t yet overwhelmed with late-season files, early filers typically get their refunds sooner. This implies that you can use the funds more quickly for investments or other uses.
4. Better Tax Payment Preparation
Instead of hurrying at the last minute and forgetting things, paying early will undoubtedly provide you more and better time to get ready for tax payments. Instead of rushing to collect money at the last minute, especially when your costs are higher or your income is insufficient, you might set aside a certain lump sum amount to pay as taxes.
You can prevent possible fines for missing something when taxes are due or for rushing and miscalculating the amount by being well-prepared for your tax payments.
You can try to reduce your tax burden by increasing your contributions to your Health Savings Account and Individual Retirement Account (IRA) if you are aware of your tax obligations for the year before the April 15 deadline. This is because you would pay less in taxes. After all, any such contributions are deductible from the taxable amount.
Additionally, if you know the amount, you can ask the IRS for staggered payment if you can’t pay your taxes in full by April 15. Since there isn’t much that can be done after the deadline, this facility is only available to early taxpayers.
5. Ample Time for Adjustments
It may seem insignificant to most Americans, but it is crucial to allow enough time for any necessary adjustments on your yearly tax forms. Perhaps you aren’t aware, but submitting tax returns that are incorrect or without any revisions can expose you to fraud accusations.
If you file false tax returns, the IRS may impose severe financial penalties on you. Even worse, if you make any mistakes, the IRS may refuse your tax refunds and impose penalties on the income you did not accurately report or indicate. Furthermore, there are no weaknesses to take advantage of.
You can organize all of your paperwork and bring it to the tax preparers before paying your taxes if you file early. That way, among other things, you would still have sufficient time to make any necessary repairs and stay out of trouble with the law, and avoid financial fines.
However, filing early requires that you have all the necessary paperwork ready, including evidence of income and other statements. This aids in determining one’s tax liability for the current year.
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Conclusion
Given these five great advantages, it is best to submit your taxes as soon as possible—that is, as soon as the tax season officially begins on January 1st of each year. It makes sense that the federal government occasionally modifies the taxable income limits, but your tax preparer would be aware of the most recent figures, and you would be informed through the news. In the US, filing returns is required, and breaking this regulation could expose you to legal accusations such as tax fraud and tax evasion, among others.
