6 Reasons You Shouldn’t Procrastinate on Your Taxes
Federal taxes aren’t due until April 18 in 2023, and you might be tempted to wait until the last minute to file. But putting off filing your taxes may not be the best decision. Here are all the reasons why you shouldn’t procrastinate on this yearly chore.
You’ll Have Time to Choose the Right Tax Prep Software
If you wait until the deadline to file your taxes, chances are you’ll settle on the same tax software you used last year. There’s no time to comparison shop when you’re up against the clock. So, you’ll likely end up paying more to file your taxes, or you won’t get the free features you could have.
One affordable, user-friendly option to consider this year is TaxAct. In addition to its free file option for simple returns, TaxAct offers Deluxe, Premier and Self-Employed tax prep products. This is essentially the same tiered system offered by the other major services, except each of TaxAct’s federal filing products is priced noticeably below many top competitors.
TaxAct also provides live expert help to all filers for free. The service, called Xpert Assist, gives you unlimited live assistance from tax experts. They’ll answer any questions you may have, and they’ll also perform a quick review before you finish filing. TaxAct makes it easy to import last year’s returns if you used another tax service, and most tax forms are also easily importable.
You’ll Have More Time To Double-Check Your Return
It can be easy to forget about a deduction when putting together your tax return. If you start working on it early, you’ll have more time to review it and correct information if needed to ensure you get all the deductions you’re entitled to.
In addition to missing out on deductions, you’re more likely to make errors if you’re in a rush.
“If a mistake is made on your return when you file, that oversite could result in an audit or an unexpected, large tax bill,” said Mark Jaeger, VP of Tax Development at TaxAct. “Mistakes can happen, but it’s important to be as careful as possible.”
Something Might Come Up Closer to Tax Day
While you may think you’ll have plenty of time to file as April 18 approaches, it’s impossible to anticipate unexpected events that could come up and interfere with tax filing. An illness or family emergency could cause you to miss the deadline, or an increased workload at your job could force you to rush your return. This scenario makes it more likely that you’ll forget to claim deductions or you’ll make a mistake.
If You End Up Missing the Deadline, It Will Cost You
If you do wait too long and miss the deadline, you’ll get hit with penalties.
The “failure to file” penalty is 5% of unpaid taxes for each month that your return is late. The failure to file penalty maxes out once you reach 25% of your unpaid taxes, but if you still haven’t paid your taxes, you’ll be hit with an additional failure to pay penalty.
Filing Early Helps Protect You From Tax Fraud
A favorite scheme of fraudsters is to file a tax return using your identity and then make off with your refund check. But they can’t do this if you’ve already filed your returns. Therefore, the longer you wait to file, the longer you leave yourself vulnerable to criminals.
Procrastinating Means You’ll Lose Out on Interest If You Are Owed a Refund
“A refund is simply money you earned throughout the previous year and, unfortunately, the IRS held onto it interest-free,” Jaeger said. “Getting that money back as quickly as possible will give you more opportunity to invest it in a retirement or investment account and make that money work for your financial benefit.”
The earlier you invest your refund or put it into a high-interest-earnings savings vehicle, the more interest you will earn on it over time.
Last updated: January 27, 2023
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