This post is intended for educational purposes only and is not tax advice.
When it comes to filing your taxes, early is best.
You typically have until April 15 (this year the deadline is April 17) to file, but waiting can run you into some major problems, including a scammer stealing your refund.
Here are five good reasons to file your taxes early – especially this year:
1. A Speedy Refund
About 80 percent of Americans receive a tax refund each year. Last year, the average refund was $2,895. That’s a handful of cash. If there’s a vacation you want to take or debt you want to pay down, getting your money sooner is one reason to file your taxes now.
The IRS says the fastest way to get your refund is to file your tax return electronically.
2. More Time To Plan How To Pay
Conversely, you may be one of those tax filers who owes the IRS at tax time. In this case, filing your tax return early gives you more time to plan your payment options or save up the amount you owe. That way, when April comes along, you won’t be hard-pressed trying to make your tax payment.
3. Avoid Fraud
Filing your tax return early can help protect you from identity theft. A criminal with your Social Security number can easily file a tax return in your name and collect your refund, but if you file early, you can help avoid this nightmare. The IRS flags duplicate returns, so it’s a good idea to submit your return before a criminal files a fraudulent one for you.
After last year’s Equifax breach – in which hackers gained access to more than 145 million U.S. American’s credit reports, including Social Security numbers, credit card information and driver’s license numbers – filing your taxes early this year is imperative.
4. Fund An IRA With Your Refund
Want to both increase your refund and fund your retirement? By filing early, you can note a tax-deductible contribution to a traditional IRA on your return and receive a bigger refund that you can then use to fund that IRA.
To have it count on your 2017 taxes, make sure you contribute to your IRA before April 17.
5. Reduce Stress
It’s always better to start early than to finish late. Your tax return is no different. By filing early, you alleviate the stress that comes when you put the task off.
One thing to keep in mind: While you should file your tax return early, you should not file until you have all the information you need to file an accurate return. Otherwise, you could face an audit.