Taxpayers have until April 18, 2016 to file their tax return, but delaying the process can create problems. Even when complying with tax laws, having less time to prepare and file the return can create issues with the IRS. Here are five reasons why you should not procrastinate in filing your return:
1. Tax Identity Theft
According to a report by the Government Accountability Office, the IRS estimated that it prevented $24.2 billion in fraudulent identity theft refunds in 2013. However, the tax agency paid out $5.8 billion in what was later determined to be fraudulent refunds.
Identity theft is real and the IRS cannot shield every taxpayer from falling prey. Once a fraudulent tax return reaches the IRS, there is a chance that it will be accepted. Therefore, to minimize the risk, taxpayers should file their returns as early in the season as possible. After your return has reached the IRS, they will not accept any other return filed in your name by scammers.
2. Early Tax Refund
Almost 75% of Americans receive a tax refund each year. By filing your return early, you can receive your refund sooner. The sooner you receive it, the earlier you can invest or spend your money.
3. Owing More Than You Paid
If you file your tax return a few days before April 18, you may believe that your yearly tax duty is over. There is always a chance, though, that you will receive an IRS notice informing you that you owe more than you paid.
Filing in haste can cause mistakes that can only be corrected by filing an amended return. If you miss the filing deadline, the IRS begins to charge penalties and interest on the taxes due.
4. Sufficient Time, Less Mistakes
With adequate time to prepare and review your tax return, you minimize the chance for errors. If you’re filing in a rush, you could miss a credit or deduction that could save you hundreds in taxes. Simple errors can also lead to an audit.
5. Availability of Return Preparers
The longer you wait, the narrower your filing options become. Many of the CPAs in your area may be already booked, leaving you with fewer choices. There may be long lines forming the closer the filing deadline gets.
To help avoid refund fraud, mistakes on your return, and unnecessary stress, it is preferable to file weeks before the filing deadline. Procrastination where taxes are concerned can cause both stress and loss of money.