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Writer Biography This is a guest post by Nate Miller, a part-time guest-blogger. His main interests are Finance and Business, with a recent focus on Technology. He is constantly extending his fields of interest to incorporate news suggested to him by his readers. Also, if you like his writing,... More
  • Why Filing Taxes Early Is Always A Must 0 comments
    Jan 16, 2014 2:50 PM

    It is not uncommon for people to process and finalise their taxes at the last possible moment. However, there are multiple reasons as to why you should file your taxes early. Firstly, keeping on top of your tax means being more aware of your financial position. The information contained in a tax return is both accurate and important, and documentation within it can be used for multiple purposes. If you are looking to purchase a house, piece of property, or another asset which requires the proof of household income, an up to date tax return gives potential house buyers a large portion of the financial and essential information required to initialize the first step of the buying process. Filing a tax return early gives one the ability to obtain personal financial knowledge which may be necessary for any major financial decisions in the near future.

    Avoid getting an extension

    The most obvious reason as to why filing your taxes early is a must is about avoiding the disorganization that often occurs when you attempt to complete your taxes at the last minute. Extensions are generally given to those who do not necessarily suffer from any financial problems, but who were simply disorganized and failed to gather relevant financial information. Simple issues like finding receipts may take a longer amount of time than initially estimated, and you miss the final tax deadline with a balance owed to the IRS, the IRS do not hesitate to charge interest on this overdue tax debt, along with multiple monetary penalties for failing to complete the tax return in time. If you already owe money to the IRS, filing your return early will offer adequate time to figure out how much money is needed to redeem the balance you already owe and what you can do to pay off this debt. Fortunately, you can always ask for help from people like who are committed to the benefits and importance of tax planning. Don't hesitate to ask for help when it comes to filing taxes and don't leave everything to the final moment.

    Highlights any potential problems

    The early completion of a tax return helps identify any problems in the current scenario and gives time to remedy these issues. It is no good to identify these problems a day before the tax return is due, because by then it is too late. Gathering information for the tax return is not a process that can be done in a few hours, it requires organisation and commitment. Information that has been compiled in a rushed manner and potentially inaccurate in a tax return can leave to heavy penalties and auditing. It is in one's best interest to make sure all the information in a tax return is as accurate as possible; the consequences of not doing so can be severe and hit you hard financially. Finalizing your tax return a few months ahead of schedule pinpoints any problematic issues you may come across, allowing you to solve these ahead of time, and avoid any awkward request to file an extension to complete the tax return.

    Early filing for early refund

    Filing a tax return ahead of time also means a faster tax refund. Not only does getting a tax return completed early save a lot of stress in the long run, it means speedier returns of any refund. That refund can obviously be used to settle any financial problems one has, or alternatively, a tax refund for any personal expenses you may have. The downside of completing a paper tax return is that the tax refund takes a few months longer to process than a tax return filed online. The early completion of tax return online results in a faster tax refund, as the department filing your return won't be as busy in comparison to the final months of the tax return deadline. Completing a tax return early and online also means avoiding the stress of having to physically send your tax return in, posting it and waiting a little longer for it to be processed. Though again, If you feel the online option is not for you, filing paper tax returns early is especially important given the additional waiting period.

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