Unless you’re a real outlier, you probably don’t enjoy filing your taxes. And if you’re like millions of Americans, you may procrastinate them until the very last minute. But that’s OK, right? Not so fast! To find the answer to that question, we asked the experts. Read their crowd-sourced answers below:
Bec Purczel is a registered Tax Agent at aceb.com.au that specialises in small to medium sized businesses.
Depends on the situation
The choice of whether to file taxes right away or wait until the last minute really depends on the individual or business’s personal situation. For example, some people may need to apply for financing and might need to urgently include the current financial year’s taxes to increase their lending capacity. Other people might hold off on lodging their taxes due to cash flow issues.
Hanley is the Founder and President of The Tax Defenders, a Chicago-based tax relief firm. As an infantry officer in the U.S. Marine Corps, Hanley served in combat in Operation Desert Storm and won several personal decorations. He went on to earn his law degree from Notre Dame. Then, motivated by his own experiences and frustrations settling an IRS Tax debt in the mid-90s, he formed the Tax Defenders in 2002.
It’s better to file taxes early, but not always
It is often better to file taxes early, but not always. The biggest reason to wait, of course, is that you owe the IRS money and don’t want to give them that cash early. Keeping your cash gives you weeks, or months, of interest or peace of mind. However, even in that case, you should prepare your taxes early so you will know how much you’ll need to pay.
Another reason to wait to file is to give yourself more time to check your return for accuracy. This, again, requires that you prepare your taxes before the deadline then go back to the forms after a few days to check your work. Very few people take this step but, in 2017, the IRS reported over 2.4 million math errors on returns! That means all those tax filers received a notice from the IRS requiring a correction on their return or the IRS decided to fix it for them. In either case, you have affected your bill or your refund and may have a penalty.
Unless you have another personal reason to file at the last minute, you should consider these benefits of filing right away.
If you are due a refund, delaying filing gives IRS an interest-free loan. Refunds are paid as soon as the return is processed, so filing early gets your refund early. In fact, tax refunds result from you overpaying the IRS for the year of your return, so get your money back as fast as you can.
Another reason is both scary and real. Filing taxes early can stop a criminal from tax-related identity theft. The IRS reported over 240,000 cases of this happening in tax year 2017. That means, almost a quarter million Americans had refunds send to thieves simply because the thief filed a return with the taxpayers personal information, claiming a big refund, before the taxpayer filed their own return.
If you did not know, this type of identity theft is when someone files a tax return with your name and social security number but a new address. On that return, they claim a big refund and the IRS sends out the check because it is hard for them to know if you have moved. If that happens, fixing it (and getting your proper refund) can be very complicated and take a very long time. But if you filed early, the criminals return will be rejected.
So while you certainly can delay filing, it often makes sense to file early.
Stacy Caprio is a Founder of Growth Marketing.
File at any point and feel good about it
As long as you feel you have all the information you need and are not rushing to file your taxes and being sloppy, you can file at any point and feel good about it. If you are rushing to put everything together, then you should take a few days, even if it means filing last minute. However, if you are on top of everything and ready to go early, filing early simply means it will be out of your head sooner and you can move on to more important business growth tasks.
Shayne Sherman is the CEO of TechLoris, based in Brookline, Massachusetts. With over 11 years of experience in the industry, Shayne founded the company with the goal of providing unbiased reporting on the tech world. When he is not running TechLoris, Shayne spends time with his family and is a passionate practitioner of Brazilian Jiu-Jitsu.
It’s always better to submit taxes early
As CEO of a business, I believe it’s always better to submit taxes early. There might be some that argue waiting until the last minute gives you time to get everything in order, but ultimately that’s a procrastination excuse.
Keep track of your paperwork throughout the year, and it won’t be as big of a concern – and you won’t need the additional time to get things in order. But if there are mistakes made, filing early gives you the time to submit corrections before the deadline.
Rachel Murley, Owner, RKM Accounting and Tax LLCRachel holds a BS in management and finance and has worked in the accounting field her entire career. She is an Enrolled Agent (EA) that has worked in the tax industry since 2005.
There’s no best time to file a tax return
There is no best time when it comes to the timing of filing a tax return. Whether you file right away or wait, the time it takes for the return to process is basically the same. The IRS doesn’t begin accepting returns until a certain date, typically the third week of January. A return may be delayed for verification or if it contains certain credits, such as Earned Income Tax Credit or American Opportunity Credit.
However, your return is not more likely to be audited, delayed, or flagged based on the timing of filing. Even if you owe on the tax return, you can file early and pay by the deadline.
This is a crowdsourced article. Contributors are not necessarily affiliated with this website and their statements do not necessarily reflect the opinion of this website, other people, businesses, or other contributors.