In simpler times, before we embraced parenthood, my spouse and I promptly took care of tax filing as soon as the final tax document landed on our doorstep. Our mail was systematically organized; bills were immediately paid and filed away. It was rare to find envelopes languishing on our kitchen counter, and every tax-related document had a designated spot.
However, the birth of our first child seemed to unleash a deluge of mail, causing piles on our counters that would have been unimaginable earlier. Finding a wallet or checkbook for bill payments, let alone the correct envelope or a stamp, became a Herculean task. We dreaded the possibility of our tax documents getting smeared with food or beverages.
Parenthood not only crowded our counters but also complicated our tax situation. We now had child tax credits and daycare reimbursements to account for, making the tax season more daunting.
Despite these hurdles, I usually strive to file our taxes as early as I can. Below are the reasons for this approach:
1. ELIMINATING THE ANXIETY OF UNCERTAINTY
Humans dread uncertainty. As a child, waiting for potential punishment upon a parent’s return home can be intensely unsettling, regardless of whether the wait lasts for 5 minutes or 5 hours. Hence, by filing your taxes early, you eliminate the fear of the unknown. This way, you would know if you owe any tax, or they owe you, helping you rest easy.
2. QUICKER TAX REFUNDS
Those who file early tend to receive their refunds quicker due to lesser demand on the IRS staff and systems during the early days. Conversely, those who delay their filing end up behind the backlog of other belated filers.
3. EXTENDED GRACE PERIOD TO SETTLE TAX LIABILITIES
Even if you end up owing the IRS money, remember that the payment isn’t due until the April 15th deadline (April 18th in 2016). You can file early and use the additional time to plan your payment method.
4. EASIER ACCESS TO TAX CONSULTATION
Just as long lines at a county fair hint at superior food options, popular tax professionals are usually booked solid well before the April deadline. An early filing offers you sufficient time to seek professional advice if needed.
5. AVOIDING REQUIREMENT FOR FILING EXTENSION
By promptly attending to your taxes, you avoid the need for requesting an extension. Doing a task in the early stages is better than pushing the chores for later, causing unnecessary stress.
6. WARDING OFF IDENTITY THEFT
A late filing, as did one of my acquaintances, only to find out that an impostor filed a fraudulent claim under her spouse’s name.
7. MAXIMIZING YOUR FINANCIAL ASSETS
A prompt tax refund can be immediately invested or saved, allowing for interest accumulation sooner.
8. ENHANCING FINANCIAL AID OPPORTUNITIES
Filing taxes early allows for a more accurate submission of the FAFSA application, which can increase your chances of securing financial aid.
9. FACILITATING HOME BUYING PROCESS
A faster filing speeds up the home buying process as mortgage companies require an array of documents, including recent tax returns.
10. IMPROVING EFFICIENCY
An early start gives you sufficient lead time to gather documentation, seek help, and navigate complex tax laws.
In conclusion, you might not feel an urgency to file your taxes early if you neither owe taxes nor expect a large refund. However, it’s always gratifying to know that it’s taken care of, giving you peace of mind. When do you typically file your taxes? Do you find it beneficial to file early, or have you ever had to request an extension?
