The tax filing has commenced, and the last date as every American knows is April 15, 2020. Those who need more time can request an extension up till October 15, 2020, to file their federal income tax returns. But, the sooner you file, the better because of several reasons. Filing early provides you the chance to file an accurate return, get more time to clear your tax bill, and save yourself from the possibility of tax-related identity theft.
Even though the IRS supplies you plenty of time to assemble all the necessary information and forms beforehand, it still allows some taxpayers to take benefit of an extension to get more time to file their returns and pay the tax bill.
Why should you file taxes early?
There are multiple reasons why you should file your taxes in the first phase itself. Some of those are as follows,
Filing accurate returns can potentially lead to a higher amount of tax refunds
It is well stated that taxpayers who file early get a larger tax refund. The reason for this is quite simple – good year-long tax planning. When you file early, you tend to be more prepared and organized with your tax work. But, filing the last minute can lead you to miss some essential deductions and credits mostly because of the last-minute rush. Also, the biggest benefit of filing early is receiving your refund earlier as well.
Getting your hands quickly on a good tax prepper
The IRS believes April to be the busiest phase of the tax filing season. And for this very reason, it’s challenging to get your hands on a sound tax prepper who usually gets busy in the latter stages because many taxpayers tend to file their returns at the last moment. Making an early appointment can earn you a comfortable timing and have all the attention of the tax prepper to file your taxes promptly.
Making the most of a larger timeline to clear tax dues
A hefty tax bill is dreaded by most of the taxpayers, and the most significant benefit of filing early is that you get a larger timeline to clear your tax bill. The later you file, the shorter the deadline to clear the tax dues.
Saving yourself from the possibility of a potential tax fraud
The biggest benefit of filing early is saving yourself from potential tax-related identity theft. There are many fraudsters out there who can steal your Social Security Number to file fraud returns early on in the tax season. The IRS does not flag them for review since they file early and are issued tax refunds. And when you would then try to file your returns, the system would treat it as a duplicate and not accept it. Now, to get yourself clear from all this havoc would need you to undertake altogether a different process that you don’t want to deal with. Therefore, the best way to save yourself from all this mess is filing early and leaving no room for tax fraudsters to make you a victim by stealing your identity.
What is the earliest time to file tax returns?
The earliest date to file your tax returns is January 27, 2020, however not all taxpayers will be able to file their returns by the starting date.
The reason for not being able to file earliest is because employers have until January 31, 2020, to send out the W-2 forms, and the same deadline applies to Form 1099.
Taxpayers who own pass-through entities such as partnership or S-corporation may not get the tax forms itself before March 2020.
Additionally, an attempt to file taxes early can also help you protect yourself from a number of tax frauds.
How to avoid tax fraud?
Although the IRS takes stringent measures to avoid tax-related identity theft, the same still take place one way or the other. Though the cases have decreased by 38% in comparison to last year still the IRS calls for adopting preventive measures and keeping an open eye to such a fraud.
For those of you who wouldn’t be able to file early can make use of the IRS transcript service. The service allows you to review all activities on your record. Though, the same will not allow you to avoid a tax fraud but can alert you of an unknown activity and allow you to take proactive actions on all matters.
Some taxpayers are also given an option to protect their identity using a PIN, adding another layer of security against tax fraud. Previously, the IRS only issued these PINs to taxpayers who were the victim of tax-related fraud. However, many taxpayers in Columbia who have not been a victim of any tax fraud have been issued such PINs to protect themselves from the possibility of one.
Though, if you get yourself this additional layer of security, you would need to make it a point to use the same while filing returns every tax season.
Foreseeing all the above reasons, we suggest you plan your taxes promptly to file them early on in the tax season. Doing so entails many benefits that can prove to be suitable for your tax profile and record. The blog lays down various measures to protect yourself from the possibility of tax fraud and also emphasized on how early you can be done with filing your federal income tax returns. The MyTaxFiler team insists you be organized while filing your returns and reach us in case you find a hiccup in the course of your way.