Filing your tax returns early has several advantages
By filing your income tax returns early, you will be among the first returns to be e-filed on January 31st, which also means you will be among the first taxpayers to receive their refund early if one is due. And there are other benefits to consider.
Budget your tax liability if you owe the IRS. If you expect you owe the IRS, you have the option of filing early and waiting until the April 15th deadline to pay what you owe, so you have some extra time to make a payment. You will also have the option of arranging an installment payment plan.
Filing early will help you avoid the last-minute rush. Your tax preparer will also be able to spend more time with you when he or she is not swamped with clients. You can use your tax refund to fund an IRA. You and/or your spouse can increase your tax refund by deducting a contribution made to a traditional Individual Retirement Account. The IRA contribution does not have to be funded until your tax filing deadline on April 15th.
Having your tax return may help you get financing. Banks and other lenders, especially small business lenders, often require current tax returns for loan applications. Also, by filing early, you reduce the possibility of errors. Your preparer will have adequate time to review the return before filing without feeling rushed. A careful review will reduce the possibility of errors or omissions. Filing early greatly reduces the possibility of errors. In addition, filing early minimizes your risk of identity theft. You provide less time for someone to file a false return to obtain a refund using your identity.