After the IRS extended the tax deadline in 2022 to May 17, some people may not be in a hurry to file their taxes, hoping that the deadline for tax filing will also be extended again in the year 2023. However, taxpayers won’t have quite as much time to file in 2023, as the deadline is on April 18.
If you dread the task of filing your taxes, you may wonder if there’s any benefit to getting it out of the way earlier in the year. The answer is “yes.” If you choose to wait until the last minute, you may run into expenses, headaches, and other potential problems. Here are a few reasons you should not wait to file your state and federal taxes.
Get Your Tax Refund Faster
One of the reasons to file your taxes early is to get any refund money as efficiently as possible. This money can be saved in a high-yield savings account or used for pressing problems such as car or home repairs. The IRS usually allows about 45 days to issue a tax refund without paying interest. However, most tax refunds typically arrive within three weeks of filing your annual tax return.
Have Adequate Time to Pay the Taxes You Owe
Filing your taxes early helps determine how much you owe the IRS. It can be terrifying to learn that you owe the federal or state government a lot of money just a few days before the tax deadline. It is best to file your returns early and know how much you owe to prepare to pay the tax bill before the deadline. You will also have adequate time to explore additional options for setting up a practical payment plan with the IRS.
Determine When You Need Professional Help
Getting an early start on your taxes will help determine whether you need professional help. If you file your taxes late and run into trouble, you may not have adequate time to hire a tax professional because they will be booked. You can also seek free tax assistance from qualified resources such as the IRS Tax Assistance Centers, Tax Counseling for the Elderly (TCE) programs, Volunteer Income Tax Assistance (VITA), and MilTax for veterans. Most of these resources will be in high demand and more challenging to book as the tax deadlines draw near.
The complex nature of the federal tax codes may lead to anxiety and frustration even for the most prepared taxpayers using the best tax programs in the market. Starting your taxes early and avoiding the April deadline will give you plenty of time and opportunity to rest or research before you can work on your taxes again with a clear head.
Lower the Chances of Identity Theft or Tax Fraud
Tax scams and frauds are major businesses today, with thousands of cases reported annually. Tax fraud usually occurs when somebody else files tax returns with your Social Security number and name to claim your tax refund. Filing your tax return can help to curb tax-based identity theft because no one else can file a return using your personal details. You can also protect yourself by creating an Identity Protection PIN on the IRS website. With this six-digit PIN, no one can file any tax return using your details.
Filing Early Is the Better Option
While there are a few scenarios where asking for an extension or waiting to file your taxes makes sense, it may still be risky for individuals or businesses to put off this task until the deadline. If you need more time, you can file IRS Form 4868 before April 17 to get an automatic extension to October 16. However, you should remember that an extension gives you additional time to file your tax return and does not postpone paying your taxes. You can save yourself lots of headaches and stress by ensuring your taxes are filed and paid before the IRS deadline of April 18.