Money Matters: Early tax filing brings benefits like early refunds
Tax season may be far from many people's minds in January, but there are many benefits to filing as early as possible. Shazia Khan filed the following report.
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The tax deadline of April 15 may be months away, but this year the IRS will start accepting some tax returns as early as January 22. Experts say filing as soon as possible has its benefits. For starters, refunds are usually given within a few weeks of when tax returns are filed.
"Over 75 percent of all taxpayers get a refund every year, contrary to popular belief. That's well over 100 million people. The average refund for most taxpayers for federal refund is about $3,000," says Mark Steber, a chief tax officer at Jackson Hewitt. "So if you file early, it stands to reason you get your money early and that's always a good thing."
Those who file early and still have to owe will have until April 15 to pay the full amount, meaning there is some extra time to set aside the money owed to Uncle Sam.
"After April 15, that's when interest and penalties will start to incur," says Wilma Hayes, an H&R Block tax associate.
Experts say filing early could prove to be a tool against the growing concern over identity theft and refund crime.
"It's an epidemic problem in the IRS and tax return filings today, of people stealing Social Security numbers and filing fake tax returns," says Steber. "It can be cleaned up by the taxpayer, but if the taxpayer would just file early, they effectively lock out the fraudster or the person who might be thinking of misusing their Social Security number for other purposes."
Of course, without the pressure of an imminent filing deadline, gives time for taxpayers to cross the T's and dots the I's for a more accurate tax return.