The IRS has announced that it won’t begin accepting returns until February 12, which is 16 days later than tax season began last year. The deadline to file your 2020 taxes is midnight on April 15, 2021. That’s just around the corner. Don’t hold off any longer—the time to file is now. According to the IRS, 20-25% of Americans wait until the final two weeks before the deadline to prepare their documents and file. The sooner you file, the less likely you will need to file an extension or pay a fine.
Here are seven reasons to get started on your taxes today:
- By the end of February most financial institutions have mailed out their respective tax documents. You should have all your documents gathered and organized. If you think you are still missing something (e.g., a document, form, or receipt), call the appropriate person to get that item sent to you right away. Tip: an email with the attached file is much quicker than the U.S. Mail.
- If you are waiting for your first or second round of stimulus payments, filing your taxes early is likely the quickest way to secure those funds. Taxpayers who didn’t receive a stimulus payment, or who didn’t receive the full amount they were owed, may claim the missing funds through the Recovery Rebate Credit on their 2020 taxes.
- Tax preparation professionals will be busier than ever this tax-filing season. As soon as you have all your documents, submit them to your tax professional. Don’t procrastinate on this; even CPAs have to get extensions if they can’t file your taxes in time.
- There is a penalty for not filing your taxes by the deadline. This penalty is harsher and different from the penalty for failure to pay what you owe by the deadline. You should file taxes on time even if you are unable to pay all the taxes you owe by the due date.
- Get ahead of the fraudsters! Another advantage of filing early if you expect a refund: It helps ensure that you claim your money before fraudsters have a chance to claim it in your name.
- Don’t forget that tax refunds are your money! Why wait any longer than necessary to claim it? You’ll feel much better knowing it’s in your bank account, and not the government’s coffers.
- Filing your tax return now and checking that off your to-do list is one more way to lighten your load. No more thinking about taxes for at least another 9 months!