For many people in the United States and around the world, taxes are a headache and so it is put off as long as possible until the last minute. However, even if you put it off, there is going to come time to file your taxes; whether early or late as long as you meet the deadline or ask for an extension. It is best to hire someone that offers tax preparation services, if you don’t want to do this on your own. There are some good reasons to file early and these are some of the things discussed below.
For one, if you file early, then you will receive your refund quicker. If you want to have your taxes approved by the IRS, and have the refund sent directly to your bank account so you can take care of any outstanding debts you may have, it is best to have this done sooner rather than later. In fact, some tax preparation services offer advanced refund options, but you have to file early. Getting an early refund is similar to receiving a bonus, but this time from the IRS.
When you file income taxes early, it is possible that you will get a larger refund. According to recent statistics, people who tend to file their taxes by the end of February get larger refund amounts than people who file late. The difference could be as much as $400 on average. Even though it is not guaranteed that you will receive a larger refund, there is still a possibility that you could. You will have a better opportunity to claim all the deductions and tax credits due to you. This is where the tax preparation services come in.
If you owe taxes to the IRS, filing early gives you enough time to get the funds together. You can ask the IRS for an extension to pay the taxes owed. The longer you put off filing your taxes, the more it opens the door to making it difficult for you to pay the amount owed since you won’t know how much you need to pay until your taxes are done.
A tax preparer knows the new laws associated with the year in which you will be filing and so it is best to go that route. There are also certain forms needed to accurately report your income to the IRS. Some of the forms include:
- W2, which the employer would provide
- If you are self-employed, you would need a 1099
- Form 1040, which reports income and deductions
To eliminate the stress of filing income taxes each year, prepare your documents ahead of time and this should include documents that prove income and deductions. Consult with a tax preparer and then once your return is accepted, all you have to do is wait to receive a refund or start getting the funds together to pay what you might owe.