Is There a Benefit to Filing Taxes Early?

Each year, individuals across the United States file their tax returns, reporting income, deductions, and credits to the Internal Revenue Service (IRS). This annual obligation requires adherence to established deadlines.

Receiving Your Refund Sooner

For many taxpayers, receiving a tax refund is a significant financial event, and filing early can speed up this process. When a tax return is submitted early, the IRS processes it sooner, leading to an earlier disbursement of funds. This allows individuals to access their money for immediate financial needs or to allocate it towards savings and investment goals.

The method of refund delivery also influences refund speed. Direct deposit is the fastest way to get a refund, often processed within 21 days for electronically filed returns. Paper checks can take several weeks longer to arrive by mail, delaying access to your money.

Mitigating Tax-Related Fraud

Filing your tax return early offers a proactive defense against certain types of tax-related identity theft and fraud. Criminals often attempt to file fraudulent tax returns using stolen personal information, such as Social Security Numbers (SSNs), to claim illicit refunds. These fraudulent filings typically occur before the legitimate taxpayer has submitted their own return for the year.

When a taxpayer files their return early, they effectively claim their identity for that tax year in the IRS system. If a fraudster attempts to file a second return using the same SSN, the IRS’s automated systems detect this duplication. This flags the suspicious activity, making it much more difficult for the fraudulent claim to proceed and preventing the criminal from receiving an undeserved refund.

Ample Time for Payment Planning

For taxpayers who anticipate owing money, filing early provides ample time for payment planning. Determining the exact tax liability in advance of the official payment deadline allows for better financial organization. This early knowledge eliminates last-minute stress and provides an opportunity to prepare for the payment without undue pressure.

Knowing the precise amount owed allows taxpayers to budget effectively, save the necessary funds, or explore various payment options without rush. Filing your tax return early does not mean the tax payment is also due early. The payment deadline remains the same for everyone, regardless of when the return is filed. This enables individuals to file early for peace of mind while retaining their funds until the actual payment due date.