1.) You’ll have less time to come up with any money owed
“A lot of people are blindsided by their tax bill,” said Greg McBride, chief financial analyst at Bankrate.com.
If you wait too long to file your taxes, he said: “You’re short-changing yourself on time.”
The sooner you file, the sooner you’ll know if and how much you owe the government. That knowledge can help you plan to save for the bill and reduce the likelihood that you’ll need to take out a loan or use a credit card to cover it.
More: Tax news and advice from USA TODAY
2.) You increase your risk of tax identity theft
Tax returns in which someone uses a stolen Social Security number to file continues to be a problem. Try to get your return in before a thief pretending to be you does.
“People who are trying to scam the system are getting their fake returns in very early,” said Martin Davidoff, a certified public accountant and tax attorney based in Dayton, New Jersey. “Getting it in earlier is a defense against identity theft.”
3.) You leave more room for errors
If you wait until the final days (or hours) to work on your taxes, you might have to frantically hunt down 1099s or call a relative to ask the cost basis on stocks they gave you.
Instead, give yourself enough time to research what documents you’ll need and to gather them.
Ideally, tax filers should step away from their returns upon completion, then reassess, said April Walker, lead manager for tax practice and ethics at the American Institute of Certified Public Accountants.
“It’s human nature,” Walker said. “It’s easier to see blatant errors once you’ve put it down and look at it later.”
Even technical issues like a computer failure (or realizing that your information is on a laptop you left at work) could increase your chances of making mistakes.
“If you run into a glitch at the last minute, there’s just not enough time to remedy the situation which may result in your return getting filed late,” Walker said.
4.) You’ll receive less attention from your preparer
If you’re using a tax professional, expect them to be busy as that April 17 deadlines approaches.
“As things come in, we put them in a queue, first in first out,” Davidoff said. “You’ll get more attention from your tax preparer if you get it in in March than if you get it in in April.”
In addition, rushing last’s year filing could leave you less tax-informed about this year, said Brian Thompson, president of the National Society of Accountants. (This year there’s even more to know, of course, thanks to the massive overhaul to the tax code).
“When I work with clients, I’m also planning with them for 2018,” Thompson said. “It’s the time of the year they’re in our office.”
If you need another incentive, remember: The sooner you file, the sooner that return will be in your back account.
“The longer you go without it,” McBride said, “the longer you’re giving the government an interest-free loan.”
The number one thing people are doing with their tax refund. Elizabeth Keatinge has more. Buzz60
Income tax return high rollers
The IRS expects it will receive more than 153 million tax returns this year. In the 2015 tax year, the average refund paid was $2,860. See below for details on the number of taxpayers who got some of their money back in previous years.
|
Year |
No. of returns getting a refund |
|
2010 |
110.71 million |
|
2011 |
113.47 million |
|
2012 |
111.86 million |
|
2013 |
112.75 million |
|
2014 |
112.00 million |
Source: Internal Revenue Service, CNBC
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