By Eric Tashlein
Your Finances
Eric Tashlein
April 15 rolls around awfully fast, doesn’t it? It will be time to file your taxes again just two months from now.
We all know the deadline to file is April 15, unless you file for an extension. But did you know the IRS sets a date before which you cannot file? The earliest day to file your 2019 tax return was Jan. 27.
Sure, you can put it off a little while longer, but you may benefit from filing early. Here are some reasons to consider getting the job done now.
Get your refund faster. Last year, more than 111 million filers received refunds, with the average amount at $2,860. If you are expecting a substantial refund, the earlier you receive it the more time you have to put that money to work for you this year by paying down debt or adding to your investment income.
Be better prepared if you owe. On the other hand, if you think you may end up owing the IRS more money than you paid in over the year, filing early gives you a clear picture of how much you’ll owe come April 15, and more time to get your finances together to pay the tab. (You can file now and wait to pay until the deadline hits.)
Cut down on mistakes. From homework to the work world, we all know that rushing to meet a deadline at the last minute can cause you to make mistakes. Errors in filling out your tax forms can result in hassles, audits and financial penalties. Tackling the hard task early will allow you to take the time you need to avoid costly oversights.
Minimize your exposure to tax fraud. Fraudsters who use Social Security numbers to file fake tax returns often do so early in the tax season, in order to get a refund issued before you get around to filing the real return. Filing early is your best protection, since it increases your chances of having your return processed first, meaning a fraudster’s return will then be rejected.
Give yourself peace of mind. Procrastination creates stress. You know the deadline is looming and eventually you’ll have to organize your paperwork and either do your taxes or hire someone else to do them. If things are complex, you may need to consult your advisors. Starting early gives you time to research your tax situation and decide on the best course of action. And that means less stress.
Get help more readily. Sometimes people think they will do their own taxes but then realize it’s too complex and turn to a tax preparer for help. However, in early April when many people are scrambling to get their taxes done, preparers get busy and it can be difficult to find help. Even if you plan to hire someone, turning everything over early will give your accountant more time to do a thorough job. If you’re a successful executive or business owner, sitting down with your accountant, financial advisor and attorney well in advance can lead to better outcomes come tax day.
Eric Tashlein is a Certified Financial Planner professional™ and founding Principal of Connecticut Capital Management Group, LLC, 2 Schooner Lane, Suite 1-12, in Milford. He can be reached at 203-877-1520 or through connecticutcapital.com. This is for informational purposes only and should not be construed as personalized investment advice or legal/tax advice.