As the deadline of April 15 draws closer, millions of Americans scramble to pay their taxes to the Internal Revenue Service (IRS). There’s no escape from this annual exercise, regardless whether you’re a college student or a senior citizen, with some income. Filing taxes is mandatory for all adults and sometimes, kids too if they have any income from part-time work during holidays.
Understandably, IRS is very flexible about how it enforces the tax rules and it’s very liberal while assessing teenagers and children with taxable or even non-taxable income.
Strange as it sounds, anyone with an income of $13,850 per year has to file an income tax return with IRS- a rule that sometimes brings most students with summer or vacation jobs under the tax cover, considering work-from-home online jobs with high incomes such as blogging and vlogging. Additionally, children holding assets earning that amount or more as interest are also liable for taxation.
Millions of Americans wait for late-March or early-April to file taxes. Fair enough, as long as you’re able to complete these formalities before the deadline of April 15. However, the later you file taxes, the more benefits you might be losing.
Yes, you got that right.
In simple words, there’re five superb benefits of filing taxes much earlier than the April 15 deadline.
5 Amazing Benefits of Filing Taxes Early
So, what are these five amazing benefits that you could actually get by filing taxes early? Actually, these aren’t just any perks doled out by the IRS to lessen load on its tax preparers or centralized systems that tend to be overloaded during the tax-paying season. Instead, these are real and tangible benefits that you wouldn’t have known even existed.
Sounds interesting, doesn’t it? Here we go.
1. Prevents Identity Fraud
According to Federal Trade Commission, in 2024, over nine percent of the American population over the age of 16 fell victim to identity frauds. This translates as 23.9 million Americans who lost combined $12.5 billion. This amount was lost in the form of fraudulent credit card spending, tax refund claims and Social Security frauds, states the Department of Justice and other authorities.
Identity thieves usually file tax returns early in order to get the refunds credited to their account.
When you file early, such refunds come to your account and any other claims or tax filings in your name can be detected easily by yourself as well as IRS authorities. By filing tax returns early, you can prevent being a victim of identity fraud or identity theft and seek proper legal measures against criminals. It could also help you reverse any losses incurred on credit cards issued to fraudsters using your name.
2. Bigger Tax Refunds
Yes, by filing taxes early with the IRS, you might get bigger refunds. Before I explain, let’s be clear that IRS doesn’t offer any sops or benefits merely because you file early. There’re no rewards from IRS for filing early. While timing is beneficial, the actual size of your refund is determined by your taxable income, tax liability, and any deductions or credits you're eligible.
However, bigger returns are made possible when you file early because of two main reasons. Filing early gives you time to review your return carefully. This minimizes errors or missed deductions, which might otherwise delay or reduce your refund.
Secondly, filing early means your return is processed sooner, leading to a quicker refund if you're owed one. Early filers tend to receive refunds faster because the IRS isn't yet inundated with late-season filings. This means, you can utilize the money for other purposes such as investments faster.
3. Quality Time with Tax Preparers
Tax preparers with IRS are a key part of the tax filing process. When you file early, you can get adequate, quality time with tax preparers who can show you the best ways to maximize returns. They can also help you prepare your tax filings. Tax preparers are less rushed during the early season, which can result in fewer mistakes.
Errors made during preparation could lead to delays in refunds or even audits, so filing early can reduce these risks.
Furthermore, if your tax situation is complicated—perhaps involving investments, business income, or other specialized concerns. Therefore, filing early gives your preparer ample time to address complexities and resolve any issues before deadlines loom.
It also gives them ample time to thoroughly review your financial situation, ensuring accurate filings and maximizing deductions or credits that you might otherwise overlook.
4. Better Preparation for Tax Payments
When you pay early, you will definitely have more and better time to prepare for tax payments, instead of rushing at the last moment and forgetting something. You can earmark a specific lumpsum amount to pay as tax instead of scrambling at the last moment to get money, especially when you don’t have adequate income or expenses are higher.
By preparing well for your tax payments, you can also avoid potential penalties for missing out on something where taxes are due or miscalculation of the amount due to rush.
If you know your tax liabilities for the year in advance, before the April 15 deadline, you can work to minimize tax burden by stepping up contributions to Individual Retirement Account (IRA) and Health Savings Account. That’s because any such contributions are deductible from the taxable amount and you would be thus paying lesser taxes.
Additionally, if you’re unable to pay lumpsum taxes by April 15, you can request staggered payment with the IRS, if you’re aware of the amount. This facility is provided only to early tax payers since little can be done after the deadline passes.
5. Ample Time for Corrections
Most Americans consider it trivial but having ample time for any corrections in your annual tax returns is very important. Maybe you’re unaware, but filing tax returns without any corrections or rather, inaccurate tax returns can render you prone to legal charges of fraud.
The IRS can charge you stiff cash penalties for filing inaccurate tax returns. Worse, the IRS can deny your tax refunds and charge a penal interest on the income you failed to disclose or indicate correctly due to any errors. And there’re no loopholes here to exploit.
By filing early, you can actually prepare all documents and take them to the tax preparers before paying taxes. That way you would still have ample time to make any corrections if needed and avoid legal wrangles and cash penalties, among others.
Filing early however involves that you prepare all the documents such as income proof and other statements in advance. That helps to self-assess the amount of taxes payable this year.
Wrap Up
Considering these five superb benefits, it’s better to file your tax returns as early as possible or rather, as soon as the taxpaying season commences from January 1 each year. Understandably, the taxable limits of income are sometimes adjusted by the Federal government but these would be notified through news and your tax preparer would know the latest values. Filing returns is compulsory in the US and any infarctions from the rule could render you prone to legal charges including tax evasion and tax fraud, among others.
Olivia Carter is a versatile freelancer with expertise in finance-related writing, content creation, and consulting. With a Bachelor's degree in Business Administration and a focus on Finance, Olivia brings a fresh perspective. Her adaptable writing style blends professionalism with approachability, engaging diverse audiences. Olivia explores personal finance, fintech trends, and enjoys literature and mindfulness.
