The tax season has arrived, and it’s time to consider filing your returns. Many people procrastinate on this task, but there are multiple benefits to getting it done early. Filing your taxes ahead of time helps avoid the last-minute rush and ensures you comply with all deadlines. Additionally, early filing allows for quicker receipt of your tax refund, offering you increased financial flexibility. It also provides ample time to handle any issues or questions that might come up, ultimately making the process smoother and less stressful.
IRS Set to Open Tax Filing Season Next Week
The IRS has confirmed that it will start accepting tax returns starting January 27, with the deadline to file set for April 15. This period can be particularly daunting for those who are newly employed or work part-time. If you are filing for the first time, or if there have been changes in your employment status, the IRS advises consulting with a financial professional to guide you through the process.
Typically, you are required to file a tax return if:
- Your income exceeds the standard filing requirement
- You have more than $400 in net earnings from self-employment
Additionally, there are other circumstances under which you may need to file a tax return, such as being an American citizen working abroad.
The general guideline is that if you are under 65 and earn a gross income of $14,600 or more, you must file a tax return. If you are over 65, the threshold increases to $16,550. These thresholds vary if you are head of household, married filing jointly, or married filing separately. It’s also important to stay current on tax laws regarding Social Security benefits if you are a recipient.
Early Tax Filing: A Strategy to Save Time and Reduce Stress
Tax season is often a source of anxiety for many. A survey by TaxSlayer indicates that 61% of taxpayers experience stress during this period, with some even preferring activities like dental appointments over managing their tax returns. Filing your taxes early can help you address any complications without the pressure of looming deadlines.
This approach also offers increased flexibility. If you discover errors or realize you need additional documents, you’ll have ample time to rectify these issues. Once your taxes are filed, you can relax knowing that your obligations are complete, while others may still be scrambling to meet the deadline. This also assists the IRS by minimizing processing delays.
Secure Your Identity and Enhance Your Returns
Beyond the peace of mind, filing your taxes early can also protect you from tax refund fraud, where criminals use your Social Security number to file fraudulent returns and steal your refund. Between 2021 and 2022, the IRS prevented over $800 million in fraudulent refunds.
Another significant advantage of early filing is the potential to maximize your tax refunds. Filing ahead of time allows you more opportunity to thoroughly review your deductions and credits. Whether it’s for educational expenses or for making your home more energy-efficient, early filing ensures you claim all eligible benefits.
As we approach the new tax season, it’s essential to stay informed about any changes in federal and state tax regulations. These laws can change yearly, impacting your deductions, credits, and filing requirements. Keeping up-to-date helps you maximize your refund and avoid any errors or penalties when filing your return.
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Calvin Baxter is an economic analyst specializing in the evolving US labor market. He leverages real data to provide you with concrete recommendations and help you adjust your professional strategies.