3 Reasons to File Your Taxes Early
Many people wait to file their taxes close to the deadline, but there are good reasons not to wait. While the IRS gives you plenty of time to prepare, this doesn’t mean you should take advantage of it. File your taxes early to minimize the risk of tax-related identity theft, have peace of mind, and better manage your cash flow.
Minimize the Risk
During tax season, identity thieves may use your personal information to file a tax return on your behalf. Thieves only need your Social Security number, date of birth, and name to file. To minimize or prevent tax fraud, the IRS advises you to file your taxes early. Early filing allows you to file for taxes before someone else does. If you suspect that you have been a victim of tax fraud, the IRS advises that you should still file your tax return, even if you must file a paper one. Check out the IRS or CRA pages to learn how to protect yourself from tax-refund identity theft.
Peace of Mind
- It can take some time to gather and access your tax forms — waiting until the last minute may lead to additional stress. It’s important not to miss any important documents. File your taxes correctly to maximize your refund and minimize the risk of your tax return not being accepted.
- Being proactive about filing also gives you time to choose and make an appointment with tax professionals, if necessary. Learn how to choose the right tax professional.
- Planning to buy a property this spring? When applying for loans or mortgages, lenders may require your latest tax return. Have it on hand to help speed up the application and review process.
Manage your cash flow
- By filing your taxes early, you get an estimate that allows you to plan your tax payment accordingly so you don’t run out of cash on hand. Paying your taxes with Plastiq allows you to tap into your existing credit and help maximize your cash flow. Note, if you use Plastiq to run your business, you can write off the Plastiq fee from your tax return.
- Another benefit of filing early is that you’re able to get your tax refund earlier, if you are entitled to one. This can also help manage your cash flow by enabling you to use your refund to invest or pay off debt.