Pretty much no one likes doing taxes — except for accountants! But, like it or not, tax day rolls around every April. The first quarter of every year is typically spent in a flurry of paperwork as tax-paying individuals and small businesses hunt down the documents their accountants need to get their tax returns filled out. If they know they’ll get a refund, they’re slightly more motivated to get this done. However, if they think they might owe money, pulling together the required documents takes a lot more effort.
Start Right Now!
Tax day is April 18 this year. That date may seem a long way off, but it’ll be here before you know it. Starting work on your taxes now has benefits aside from the peace of mind that comes with completing a task ahead of a deadline. Here are a few other benefits to filing before the April 18 deadline.
#1. Get your refund as soon as possible. The number one reason people are motivated to file their taxes early is that they’re expecting a refund. The sooner the IRS receives a tax return, the sooner it gets into the queue for processing. Filing your return electronically speeds this process up too. The IRS allows 45 days to issue a refund, but most arrive within three weeks or so. If you expect a refund this year, get your tax return filed as soon as possible.
#2. Figure out what you’ll owe so you can develop a payment plan. Preparing and filing your tax return early in the year gives you a head’s up on how much you’ll owe on tax day. Knowing this number well in advance of the payment date gives you a chance to assess your resources and come up with the money if you don’t already have it set aside. Remember that even if you file early, you don’t have to pay until April 18.
#3. Protect your identity. In 2021, the FTC reported more than 111,000 cases of tax-based identity theft. Most tax fraud situations occur when someone besides you files a tax return with your name and social security number on it. They’re hoping to claim a tax refund if there is one.
One of the best ways to prevent this is to beat the thieves to the punch by filing early yourself. When you file early, you decrease the chance that anyone else can file a return using your taxpayer information.
If you can’t file early for some reason, you can still protect yourself by setting up an account on the IRS website and creating your own Identity Protection PIN. No one else will be able to file a return using your taxpayer information without that secret six-digit number.
#4. Know when to get help. Starting the tax prep process early in the year gives you a chance to see how it goes before you run up against the filing deadline. If you get stuck somewhere, you may need to call for help. While many individuals do fine filing taxes themselves using one of the many tax preparation software packages on the market, many others don’t feel comfortable doing taxes on their own. If you’re not sure of what you’re doing, it’s okay to call someone who does.
Adams Accounting Solutions is On Your Side!
If you need help gathering documents and preparing your taxes this year, give Adams Accounting Solutions a call. We specialize in tax preparation services for both individuals and small businesses. We’ll advise you on what type of documentation you need, get your return filled out, and file it for you well in advance of the filing deadline. Call today to schedule an appointment!
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.