Tax time is still a few months away, but you don’t have to wait until Tax Day on April 15th. There are plenty of reasons to file early. Keep reading to discover how to file, tips to get a bigger refund, and reasons to file early.
How To Get A Tax Refund
These days there are many ways to file your taxes. You can pay a tax expert, you can buy a computer software program, or you can do it the old-fashioned way by hand.
If you are a math wizard, doing your own taxes the old-fashioned way is the cheapest way to file taxes: FREE. However, if you are like most people, this can be a daunting task. It can be intimidating, and if you make a mistake it could cost you a lot of money and a lot of hassle with the IRS.
Purchasing a tax software program has its advantages and disadvantages. The programs are fairly easy to follow. They are less expensive than paying a tax professional. (You can even “go in on one” with a friend or neighbor and cut the cost even further. One program can be used for multiple households.)
You can do your taxes in the comfort of your own home in your leisure time. The big drawback with these programs is that if you make a mistake, you are responsible; whereas if you hire a tax professional, they will often guarantee their work.
Paying a tax professional is the most expensive route, but has many advantages. One advantage is that they know how to find you the tax breaks. They are less likely to make mistakes. And even if they do, many of them will guarantee their work.
Once you decide which way you want to prepare your taxes, it is time to gather all the documentation you need:
- If you are going to a tax professional you will need to bring your Driver’s License or Identification Card (if you have recently moved and the address on your ID is not current, then you will also need to bring a piece of mail addressed to you with your current address).
- Your Social Security Number
- The Social Security Number of all dependants you are claiming
- The proof of income of all dependants you are claiming
- Your bank account number and routing number (if you want your refund directly deposited)
- Your W-2’s from all your places of employment
Other proof of income such as:
- Form 1099 B from any sale of stocks or bonds
- Form 1099 DIV from any Interest or Dividend Income
- Form 1099 MISC from any self-employment or business
- Form 1099 R from any retirement or pension benefits
- Form 1099 SSA from any social security benefits
- Any other such forms
Always make sure to double check the tax return before you file it. A tax return can be rejected by the IRS for simple-to-prevent mistakes. Some of the most common reasons that the IRS will reject a tax return are: Social Security Numbers not matching; the dependants’ information do not match; the dependents were already claimed on someone else’s tax return; and the income does not match their records.
The earliest that you can file taxes was on Friday, February 12, 2021. And while Tax Day is still a couple of months away, there are several reasons to file early.
It is less likely to be a victim of Identity Theft from a scam artist who files a false refund using your information.
If you do end up having to pay in, it gives you time to make a financial strategy to pay the money. For example, contacting a foreclosure lawyer.
Professional tax preparers are less busy during the beginning of tax season and you will have an easier time finding an available appointment.
According to the IRS website, you are more likely to get a bigger refund if you file early.
There are a few exceptions to the April 15th, 2021 Tax Day, according to the IRS website. If you are a business owner and you are a “fiscal year filer”, then Tax Day for you is “the 4th month after your fiscal year ends, day 15” (unless your file day lands on a Saturday, Sunday, or legal holiday). In that case you will have until the following Monday.
What if you can’t file by April 15th? There is a form that you can file to request an extension: Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
You may also qualify for an extension if you are in the military. Check out the IRS website for more information on filing late or filing as a “fiscal year filer.”
When Will You Receive Your Tax Refund
The IRS website says that it will take an average of 21 days to receive your refund once they have received it. They suggest that the quickest way to get your refund is to file early. They also suggest e-filing, stating that it takes longer to process snail-mail refunds, up to eight weeks.
How To Get The Biggest Refund This Year
Here are some tips to get the biggest bang for your buck:
- Utilize the Covid Relief Benefits
- File the right status
- Claim any dependent that lived with you for six months or more and that you provided more than 50% of their support
- Don’t forget to claim any charitable donations
Filing taxes can seem daunting, but once you have gathered all your documents and know a few tricks of the trade, it can be a breeze. And you just might get back more than you expected.