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What Are the Benefits to Filing Taxes Early?

The deadline to file 2020 taxes is extended to May 17, but don't wait until the last minute.

Although the deadline to file 2020 taxes has been extended from April 15 to May 17, CPA and TurboTax  (INTU) - Get Intuit Inc. Report expert Lisa Greene-Lewis explains the benefits of filing as early as possible. 

The benefits of filing early include:

  • You'll get your refund earlier. With the average refund being close to $3,000, you want to get that in.
  • If you e-file with direct deposit, the IRS states that they are issuing nine out of 10 tax refunds within 21 days or less.
  • Even if you aren't getting a tax refund, filing early lets you know where you stand and allows more time for tax planning.
  • It can allow you to make a smart move by the new deadline by contributing to your IRA and still make an impact on your 2020 taxes.
  • If you are under-withheld or over-withheld, it gives you the rest of the year to tell human resources that they need to make adjustments to your paycheck before next year's taxes are due.
  • When people wait until the last minute, they can misplace important documents and receipts that report their income, and expenses that can be deductible. It gives you more time to dig up that research and have the correct identification numbers. 
  • If you have kids, filing early gives you time to gather the correct social security numbers because you need those social security numbers in order to claim the valuable tax deductions and credits for kids.
  • If you got married in 2020, you need to change your name and other information with social security because the IRS matches that information. So, it's important to bake in time to do that before the deadline.

There are various tax perks to punctuality and after the unprecedented year we experienced in 2020 with the coronavirus pandemic, it's beneficial to file your taxes early to avoid further stress and take advantage of the benefits. 

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