Getting started early means that you’ll be less stressed while trying to make the tax filing deadline (April 15, 2019) and you’ll also get other benefits. The deadline to effectively do something to change the outcome on your tax return in most cases is December 31st. If you have not yet watched the year-end tax tips video, we encourage you to do so. We began working on our client’s current year tax returns at the beginning of this year with proactive tax planning.
We have until the end of the year to execute those plans. Still, even though come 2019, it’s too late to execute most strategies to change the tax outcome, it’s still a great idea to begin working on your return as early as possible. Here are four reasons that you should start very early in 2019:
Have Enough Time to Get It Right
Part of the reasons you use a tax professional is to optimize your results. Most returns create questions that we need to pursue in order to make sure that we aren’t missing deductions that can save you money. Early in the season, it’s easy to scrutinize returns and investigate possibilities that can save you money. In April, after our tax professionals have worked 80-100 hours a week for 15 weeks, despite our best intentions, we may have a greater chance of missing some of those key opportunities. By April, the goal is to get it done; in February, we can focus on getting it done optimally.
Be Intentional About Filing Extensions
Don’t file an extension because you have to (i.e., because you started working on things late). File it because you decided to, because it’s to your advantage. Extensions are reasonable to file when you’re awaiting key documents or if you want to make a SEP contribution, among other examples. Filing taxes prior to April 15th is smart for most people. However, making a proactive, informed choice about whether to file an extension means you started getting tax things done early..Remember – an extension of time to file is not an extension of time to pay. If you owe money, you should know that as early as possible so you can marshall the resources to pay that with the filed extension. Starting early lets you know where you’re at in advance, which is much better than finding out on the day that you owe a big chunk of money. Filing an extension when you do owe taxes can result in additional payments and expenses like penalties and interest if you do not pay the taxes owed prior to April 15th.
Scammers, if they’ve found access to your Social Security number, will attempt to turn in fraudulent tax returns to pocket any money you might be getting back this year. The way it works with the IRS is – the first one to file gets the refund, including if that’s done by a scammer. When you file your actual return, it will take additional time to research and resolve the scam, thus delaying any refund due to you, in addition to creating headaches and hassles. Filing early improves your chances of not being victimized by these scammers, closes the window on this fraudulent activity, and helps prevent identity theft at tax time.
Get Your Refund Earlier
Perhaps this is the most exciting benefit of filing early, but the earlier you file, the quicker you receive your tax refund. Simple as that. You’ll have faster access to the money that is due back to you so you can put it to work (or play) as you see fit.
Starting your taxes early has many benefits: from avoiding fraud to avoiding penalties to having enough time to get things right to simply getting your money earlier. It is a no-brainer. Save yourself time, money, and stress by starting on your taxes early in 2019.
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