Tax season is in April, but you do not have to wait until then to do your taxes. Many businesses and financial institutions mail out your tax documents in January, making this the perfect time to get a jump on things and get your taxes done. You will find that there are many benefits to not procrastinating and starting on your tax return today.
Make Sure You Are in Compliant
Before you complete your taxes for 2017, which are due in April 2018, you should take a moment to check that you have not missed any previous years for which you were supposed to file a tax return. It is especially important that you double-check your 2014 tax returns, as April 2018 is the expiration date for any refunds for that year. Although the IRS has a 10-year statute of limitations on any federal tax debt, there is only a three-year period in which they will still honor any refunds.
Additionally, you want to make sure that you do not have any outstanding federal tax debt if you plan on having a refund this year. The IRS can garnish your refund and apply it towards any back taxes you owe. Before you go spending your refund, it helps to know that it will not be taken away from you.
Tax Preparers are In Demand
With the passing of the tax reform bill at the end of 2017, tax preparers are more in demand than normal. Although many of the new tax laws do not impact this year’s taxes, many people will still head to a professional to ensure their taxes are handled correctly. This is always a good idea, especially if you have complicated taxes. By starting on your tax return in January and February, you will be well ahead of the curve. This could make it easier to find an appointment that fits your schedule to reduce your stress and hassle.
Time to Save the Money
When you prepare your tax return early, you have time to collect any money you might owe. You do not have to submit your return or pay your taxes until April, and you can also easily requires an extension to October to file your return. However, you do have to pay your taxes in April or face penalties. The last thing you want is to end up with a tax liability that you are unable to pay.
By beginning the process now, you will have two months to collect the funds to pay what you owe. You will have everything ready to go, and once you have the money, you can complete the process. If you cannot come up with the money, you have a few months to come up with another alternative, such as setting up an Installment Agreement or taking out a line of credit. This reduces the chance your tax bill will balloon into a huge payment that is even harder to pay.
Don’t Wait For Your Refund
Are you expecting a refund this year? When you file your tax return early, you also benefit from getting your refund early. Although the situation might be impacted by situations in the IRS, they generally will get out the refund soon after you submit your return. If you file early, then they can process it faster because they are not handling millions of other returns at the same time. You will have your refund and able to spend it before most people have even filed their return.
Tax time is notorious for its stress. Just think of how relaxed you will feel when all of your friends and family members are running around trying to get their taxes done and you are done. You also do not have to start to fret when you realize you do not have all the documents you need. Because you are working on your tax returns early, you have plenty of time to hunt down the missing forms or receipts.
When you get a head start on doing your taxes, you also reduce the chance that you will be late, leading to a higher tax bill thanks to the high penalty fees and interest rate. Do not procrastinate just because filing taxes is complicated and not fun. Do them now and you do not have to think about them anymore this year.
If you already have outstanding tax debt, now is also the time to handle it. Contact us today at 877-372-2520 to talk with one of our tax professionals about your situation. We will help you find the right solution to your tax debt so you no longer have to feel the burden of owing money to the IRS.