Your Money Matters: Income tax filing tips
Associated Tax Advisory Group
5 Reasons to File Early:
Get Your Refund Sooner
This is the most obvious reason to file early. If you’re expecting a refund, not only will it get processed sooner, but you’ll likely also cut down on the wait time. Early filers often get their refund 10 days quicker than late filers (according to Sienna College in Loudonville, NY.) The IRS allows you to track the status of your refund. Once you get that refund, I recommend my clients put their refund to good use – either paying down debt, or putting away in savings. If you don’t have a financial emergency fund, your tax return could be a good place to start.
Cut Down Your Risk of ID Theft
Identity theft is a big problem, getting bigger every year. All identity thieves need to file a claim electronically is your name and tax ID number. They can make up all the rest of the details. If the IRS already has your return on file, when a criminal sends a false one, they’re much more likely to recognize the fake. Using direct deposit also helps keep your refund secure. That way criminals can’t get it redirected to their address or steal it from your mailbox.
Put Your Best Foot Forward
You might sit down at the last minute to do your taxes only to realize your situation is more complicated than you’re used to, and you don’t have time to figure it out before the deadline. Give yourself enough time to allow for any surprises, and to cut down on mistakes. If you are in a hurry and you do make a mistake, that could lead to penalties or even audits.
Financial Aid Help
If you are applying for financial aid for yourself or for your children, getting your tax information early will help you get the maximum amount of financial aid. You can fill out your Free Application for Federal Student Aid (FAFSA) form with estimated figures even before you file your return, and then correct the numbers once you do file. The FAFSA now has an IRS Data Retrieval tool so you can have your tax information directly imported from the IRS. That ensures the numbers are correct. It can all be confusing, I have an online tutorial on my website.
Raise the funds
If you owe the IRS money, you don’t have to pay until April 17th. But you can still complete your return early and turn it in. Knowing early how much you owe will benefit you, because it will give you more time to set up a payment plan and put aside the money you owe.