Filing your income tax return is an easy task to put off until a later time. If you are like most people, you often wait until just before the April 15 deadline to get the job done. This year, considering giving yourself a head start. Here are five ways getting a jump on tax filing could benefit you:
#1 – If you have a refund coming, you’ll collect it sooner
This may be the best reason to get your tax filing done now. If you expect to earn a refund when you file your tax return, you may get your money sooner. In the past, refunds have typically been processed faster in the early weeks of filing season when the volume of returns are lower. Why not get the money that’s owed to you as soon as you can?
#2 – If you owe money, you can wait to pay it
If you are concerned that once you complete your tax return you will owe additional taxes, you can still wait until the April 15 filing deadline to make your payment. By preparing your return early, you’ll know in advance what your cash needs will be by the due date. However, be aware that if you forget to make your payment by the deadline, you may end up owing interest and penalties.
#3 – You will have a better grasp of your 2019 expenses
If you plan to itemize deductions, the sooner you start your return the more time you have to gather the necessary records. Those who wait until the last minute to file too often find themselves scrambling to pull together their financial documents or forget about potential deductible expenses or reportable income. By taking more time to double-check your potential deductions, you may reduce your final tax bill or receive a larger refund.
#4 – You may get more time and attention from your tax preparer
As the tax filing deadline approaches, tax preparers are often overrun with demands from their clients who waited until the last minute to get their taxes done. Your preparer may have more time to help make sure you’ve covered all of your bases if you work with them well in advance of the deadline.
#5 – The risk of identity theft is reduced
A more common crime in recent years has involved the filing of fraudulent tax returns. Scammers may be looking to collect a tax refund utilizing your Social Security number. If you file early, you’ll already have your tax return on record and it will alert tax agencies that a second, phony return has been filed in your name.
Starting your tax work now can also make the process less stressful. Begin gathering your income and expense records and contact your tax advisor.
Andrew R. Petty, CRPC®, APMA®, CLTC®, is a Private Wealth Advisor with Nona Wealth Advisors, a private wealth advisory practice of Ameriprise Financial Services, Inc . He offers fee-based financial planning and asset management strategies and has been in practice for 16 years. To contact him, please call 407-249-4006, visit his website at https://www.ameripriseadvisors.com/team/nona-wealth-advisors or stopover at his office at 10917 Dylan Loren Circle, Suite A, Orlando, FL 32825.
Ameriprise Financial Services, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
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