Why You Should File Your Taxes Early

Whether you're owed a refund or not, it's a good idea to file your IRS tax return early.

The IRS started processing 2016 tax returns on January 23, 2017. You have until April 18, 2017 to file your 2016 return (October 18, 2017 if you obtain an automatic extension to file). However, filing your return as early as possible is a great idea.

First of all, if you’re owed a tax refund, the sooner you file you taxes the sooner you'll get your refund. In 2016, about three-quarters of all taxpayers--111 million people--received refunds that averaged $2,857. Similar numbers are expected for 2017. Every day you wait to file your return is a day you don’t get that money back. In effect, you’re giving the federal government an interest-free loan.

But, even if you aren’t owed a refund, filing early is still a good idea. This is because of the widespread and growing problem of tax return fraud. For years, fraudsters have been engaging in identity theft against legitimate taxpayers and filing false returns in their names to claim their refunds. The U.S. Department of Justice recently successfully prosecuted one identity thief who claimed at least $20 million in phony tax refunds over eight years.

The IRS says that refund thieves usually file their fake returns early in the filing season so the IRS gets their fraudulent tax returns before the real taxpayers have filed their legitimate returns. If you file early, it’s less likely a fraudster will be able to successfully claim your refund.

Unfortunately, when it comes to filing their taxes, many Americans are big procrastinators. Last year, over 21.5 million taxpayers waited until the last week to file their returns--that was one in seven taxpayers. Another 13 million asked for extensions of time to file.

Don't be a procrastinator. If you’re one of the 60% of all taxpayers who hire tax preparers to prepare their returns, make an appointment as soon as possible. If you prepare your return yourself, obtain whatever tax preparation software you need. Either way, start now to gather all the documentation you need to complete your return.

 

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