The Advantages of Filing Taxes Early
January 26, 2017 : Eli Colmenero – The Tax Institute
It is time to start digging out those receipts and gathering the various tax documents you have received throughout the year because tax time is upon us! The IRS announced that it will start accepting returns on January 23, 2017. While we know you are most likely concentrating on making those new year’s resolutions happen, it is also time to start thinking about filing your taxes. Here are a few reasons why you should consider filing taxes early this year:
1 – Fewer Errors Could Mean Getting Your Refund Earlier
Submitting a tax return with an error could delay you receiving your refund. For example, I once forgot to send my paper return without a signature. I was rushing to meet the filing deadline and completely forgot a very easy and basic part of filing my return. If I had started my return earlier, I would have had time to review the return and catch the error. This little error cost me two months of additional wait time for receiving my refund.
Learn from my mistake and plan on filing your taxes early so that you have time to review your return. In doing so, you give yourself ample time to not only catch errors, but also spot additional opportunities to maximize your refund.
2 – A (Potentially) Bigger Refund
Starting your return early with H&R Block gives you more time to gather necessary information that could increase the size of your refund. The U.S Government Accountability Office has estimated that taxpayers overpaid taxes by over $1 billion by taking the standard deduction. Often, taxpayers forgo itemizing their deductions because of the time required to gather receipts and other evidence.
Waiting to the last minute and checking off the standard deduction could mean that you are leaving some dollars on the table. Having more time allows you to weigh your options and make strategic choices regarding what options are most beneficial to you.
3 – Prevent Identity Theft
In previous years, estimates indicated the IRS paid more than $3.1 billion to individuals who have filed fraudulent returns that use the identifying information of others.
As the saying goes, the early bird gets the worm. If someone possesses your tax information, filing your return first prevents fraudsters from successfully filing a fraudulent return. Additionally, taking advantage of H&R Block Tax Identity Shield® offers unique protection that reduces your risk of tax identity theft.
We take tax fraud very seriously at H&R Block and if you want more information on how to prevent yourself from becoming its next victim, visit the H&R Block Fraud Center.
4 – Financial Aid for College
The Free Application for Federal Student Aid (FAFSA) is used to determine eligibility for student grants, work-study, and loan amounts. Private scholarship funds also commonly use it to determine the eligibility fpr potential scholarship recipients.
Even though the FAFSA is not due until June 30, 2017, the data required for it is pulled from the Form 1040. Early application for student aid could mean access to more opportunities for aid or third party scholarships.
You have many reasons to file early or at least to start working on the return as soon as possible so you can get access to your refund sooner rather the later. The IRS expects to send refunds within 21 days of processing for e-filed returns and 6-weeks for paper returns. However, if you are claiming the Earned Income Tax Credit or the Additional Child Tax Credit, Congress has required that the IRS hold your refund until mid- to late-February (2017).
All in all, there are tons of advantages of filing taxes early. Even if you do not feel prepared quite yet, it is okay, that is why we are called tax preparers—visit your nearest H&R Block location, access our tax software, or file online to start now!