Here are the reasons why I’m completing my taxes early

Jody Roberts via Flickr under a Creative Commons license

Jody Roberts via Flickr under a Creative Commons license

A personal finance goal of mine for the month of February was to finish preparing my taxes.

I had gotten into a groove the past few years finishing taxes as early as possible because the numbers are used for the Free Application for Federal Student Aid (FAFSA) which determined the student loans that would be available to me.

But there are plenty of other reasons to complete (Note: Complete, but not necessarily file) your taxes early.

Here are some of them.

Apply sooner for financial aid and other things that require knowing your income

Let’s get this out of the way first since I already mentioned it. If you’re a student or parent applying for financial aid on behalf of a student, then knocking out your taxes lets you put a final number for your income on those forms.

Not only that, because the two websites are linked, submitting your taxes to the IRS automatically populates the pertinent data on FAFSA.gov (Unrelated but important note: FAFSA.com is the website for a private firm that will charge you to fill out the FAFSA and is not the same thing as FAFSA.gov).

Get your refund or know what you owe sooner

This should be pretty obvious for those of you who know you overpaid a bit over the year and are due back a refund. If the money’s coming to you, why couldn’t you possibly want it sooner rather than later? The sooner you file, the sooner you’ll receive your refund. And, if you file before the big crowds do, you’re also likely to see a shorter turnaround time between filing and actually receiving your refund from a less busy IRS.

But what if you’re on the other side of the table: what if you know that you’ll be required to send more money to the IRS?

Completing, but not filing, your tax returns as early as possible can still be a pretty good strategy. Doing so will give you a clear idea of the amount of money you’ll have to save to be able to pay that tax bill before the deadline.

And if it’s more than you anticipated, the target number can help you start a strict budget to adhere to for the next couple months to save up that payment.

Avoid fraud

One scam that’s been on the rise in recent years is tax return fraud. The M.O. of criminals who engage in this sort of thing is to hack into databases that contain social security numbers, and use these to file and collect refunds before the real taxpayer has a chance to.

So how can this be avoided? First, by safeguarding your personal data, but also, in part, by filing before these fraudsters get a chance to.

Get the stupid thing out of the way

Isn’t that reason enough? It is a fantastic feeling to cross a HUGE item off of your to-do list rather than letting it hang over you for a couple months.

And that’s why I’m doing them now. Hopefully, I’ll be done by the end of the long Presidents Day weekend.

How about you guys?

Comments

  1. Rob says

    I filed my taxes on the 31st, the first day you were able to do so…I owed a substantial amount (>2K) so my reasoning was more of the ‘get this out of the way’ variety. Thankfully I could pay it off in one swoop and although it was painful to see the money leave my account, I’m glad it’s done with.

  2. Brian says

    I am forced to file mine later in March since I get a couple K-1 forms and those don’t have to be sent out until mid-March. It doesn’t really bother me that much anyways since I am used to it. It also gives me plenty of time to get my return mostly done and then plug in the K-1s and double check everything.

  3. says

    This is something that I wished I could do as well. Unfortunately with all the reporting requirements I have to get so many documents from various entities it really makes tax time a drag for us. But we pay the extra money for a CPA and have him do all the heavy lifting.
    Marvin recently posted…Financial WisdomMy Profile

  4. says

    I have yet to file my taxes only because I was on vacation . I will have to go back to work to get my W2′s. I agree that filing early is the best policy to avoid fraud. I have always filed early till now, I never had to owe on my return and hopefully it stays that way. Thank you for the great tips – my favorite part “get the stupid thing out of the way” lol.
    Blog Addict recently posted…5 Tips to Build a Blog Landing Page, Turn Traffic into CashMy Profile

  5. says

    I need to stop being such a slacker and get mine done already. I’m pretty sure I’m due a refund, and while not desperate for cash, don’t want the government to get the interest off the money I should be earning. It can just be such a hassle getting all of the documentation together!
    Ryan @ Impersonal Finance recently posted…you vs. the economyMy Profile

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