Why you should start preparing your taxes now
3 comments so far
Contrary to popular belief, you don’t have to wait until April to get your taxes done. In fact, the sooner you can get them done, the better.
I realize that it’s piling one more thing on your already full plate, and April seems so blissfully far away…why worry about it? True, it may seem like a bit of an inconvenience now but four months passing isn’t going to make it more convenient. In fact, it can make it more difficult and stressful. Here are some benefits of doing your taxes early:
• It’s easier to make an appointment. The closer it gets to April 15, the harder it will be come to find a time that works for both you and your accountant. And it’s likely that you’re going to be the one inconvenienced by having to rearrange your schedule to make it work.
Don’t have your tax forms yet? Go ahead and schedule an appointment with your accountant, or block off the time on your calendar when you’re going to work on them, now.
• More attention to detail. I’m willing to bet that whoever is doing your taxes will be able and willing to give you more attention if he or she isn’t feeling the pressure of knowing there are a few dozen more people to see that day. By having a little time to answer questions, you can be better prepared for next year (possible deductions, upcoming changes in tax law, etc.). This has the potential to save you quite a bit of money.
• If you run into any problems, it will be easier to get help. If you do your taxes yourself and run into trouble, or realize you forgot a form or need to request some kind of document, it’s best to have a little cushion. This will help you from stressing out over getting the mystery form in time, or having to pay extra fees to expedite the process.
• You’ll get your refund sooner (assuming you’re going to get a refund). Ah, the joys of a tax return. The possibilities seem endless as we tend to think of the “free money” we’ll be receiving in a few week’s time. Instead of splurging, I suggest considering putting at least half away in a rainy-day fund, paying off debt or investing it. It’s not quite as sexy an idea as going on a trip or buying an expensive toy for the house, but it can be a real benefit in the long run.
What other benefits are there to getting a head-start on your taxes? Leave word in the comments.
LivSimpl
Pessimistic photo courtesy of here.
Thursday, January 24th, 2008 at 9:16 am and is filed under Finances, Work. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
One thing that I recently discovered is that many online filing services (TaxACT & TaxSlayer seem to be the best bang-for-your-buck) allow you to prepare your return for free and then pay at the time of filing. That means that you can try out different services and see which one works better for you first, then decide which one to file with. One of them might find more deductions for you and in turn qualify you for a better refund (or less of a tax bill). You can also find out which one’s easier to use. Also, keep in mind that, if you are below the income limit of $54,000, you can file for free. Go to http://www.irs.gov and click on “FreeFile” under the Online Tools on the left side.
Good advice! I always try to prep stuff early, but then have to wait for my 1099s and other tax documents. Wish everyone were as ontime as I am!
I use TurboTax and although I grit my teeth everytime I have to pay for the program AND the filing, each year so far the program has caught things (not mistakes, just deductions I missed) that ended up saving me more than I spent on the program. (I file my own state returns, though, since paying extra for those seem a waste.)
One exception to the “file early” rule would be if I have to pay. I’m so cheap I don’t let money out of my pocket until the last possible minute, so if I owe money, I wait until mid to late March.
Excellent info Kevin! Thanks to you both for your comments.