Tax season is in full swing, and it’s time to start thinking about filing your taxes and getting the most out of your return and your tax refund. Although the Internal Revenue Service officially begins accepting e-filed returns on Jan. 23, you can get a jump-start on your taxes and get closer to your tax refund.
[See: Answers to 7 Burning Tax Questions.]
Here are five good reasons to get an early start and start filing now.
1. Get your refund sooner. If you’re expecting to get a refund, filing taxes early can mean money in your hands sooner. The IRS states that it will issue nine out of 10 tax refunds within 21 days or less with e-file and direct deposit. Last tax season, about 75 percent of taxpayers received a refund, with the average amount close to $2,800, according to the IRS. That’s a lot of money. You could pay down credit card debt, student loans or save it for a rainy day.
2. Your refund may be bigger than you think. Your everyday life or life changes can lead to some nice tax deductions and credits that can save you money on your taxes. Life changes, such as having a baby, can lead to huge deductions and credits, such as the dependent exemption of $4,050, child tax credit of $1,000, or the child and dependent care credit worth up to $1,050 for one child. Even if you started your own business this year and are now self-employed, you can deduct business expenses you may have not considered, such as start-up costs, travel and car expenses.
[See: 10 Smart Ways to Spend Your Tax Refund.]
3. Extra time to pay taxes you owe. If you owe money to the IRS, you may still have a good reason to file your tax return as soon as you can. If you submit your tax return in the middle of January, you do not have to pay taxes you owe until the filing deadline in mid-April. Preparing your taxes early will give you time to figure out how you’re going to pay or other options if you owe.
4. Avoid missing valuable tax deductions. People who wait until the last minute to do their taxes tend to rush and may leave out information. One of the most common mistakes tax procrastinators make in a rush is including incorrect Social Security numbers for themselves, spouses or dependents. Incorrect Social Security numbers can cause you to miss out on valuable tax credits and deductions.
[See: 10 Tax Breaks for People Over 50.]
5. More money to do what you like. Receiving your tax refund earlier can help you pay down some bills and save about two months’ worth of additional interest. Imagine what it would be like to have more money in your pocket to enjoy months in advance of the filing deadline. You could get ahead on some bills, put some money away for retirement and enjoy the additional free time with your family.
Once you’ve gathered your necessary tax forms, you’ll be ready to file and on your way to getting your tax refund as quickly as possible.
More from U.S. News
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Ready, Set, File: 5 Reasons to Get a Head Start on Your Tax Return originally appeared on usnews.com
