Taxpayers have until January 31 to file Form W-2 with the IRS and give employees copies to receive their tax refund. They’re probably on their way if you haven’t received them yet.
Even though preparing your taxes in February can feel like writing a book report the night before it’s due, tax experts advise getting started as soon as possible.
How To Receive Tax Refund Sooner?
According to John Vande Guchte, a certified public accountant and senior financial advisor with Strategies Wealth Advisors, the rule of thumb is to start as early as possible, whether you’re filing on your own or working with a prepared.
Here’s why experts think it’s a good idea to start on your taxes as soon as possible:
The sooner you file, the quicker you’ll receive your tax refund. And for many Americans, this is a major issue. According to a recent survey by Credit Karma, 30% of individuals rely on their return to make ends meet. These percentages are much higher among taxpayers from Generation Z (46%) and millennials (40%)
Recent IRS taxpayer advice states, Taxpayers should plan to file electronically and choose Direct Deposit for their tax refund it’s the quickest and safest option to file and get a refund.
The IRS reported that IRS, over two-thirds of taxpayers were eligible for a refund in 2022, with an average refund of nearly $3,200. Due to the expiration of pandemic-era tax policy adjustments, however, Americans might expect fewer tax refunds this year, and some who were anticipating a windfall may find themselves owing money.
According to Vande Guchte, if you’re struck with an unexpected tax bill, it’s better to know as soon as possible.
If you anticipate owing $1,000 in early February but the payment isn’t due until April 18, you can still file, he explains. He thinks it can allow you time to prepare financially to pay the amount.
Shiloh Johnson, a CPA and the founder and CEO of the company tax platform ComplYant, believes that filing early isn’t limited to those with simple returns.
Accuracy is essential if you are a big earner. Starting early allows you to provide tax preparers with materials in a timely fashion She claims. If you are a business owner and file your taxes late, you may incur penalties and interest that can spiral out of control.
You may begin gathering your paperwork and discover that you may require assistance from a professional. Or perhaps a significant change occurred in your life, said Jamie Hopkins, managing partner of financial solutions at Carson Group.
Perhaps you relocated to a different state or you and your companion got married. Perhaps you started your own business. He recommends hiring a tax professional for that year to determine how your changing circumstances may influence your taxes.
According to experts, small business owners, side hustlers, and investors with many sources of income may also benefit from the human touch. The sooner you contact one, the better your chances will be, according to Hopkins.
CPAs desire early engagement. In March, it becomes much more difficult to receive a return phone call, since everyone is quite busy.
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Stolen Tax Refunds
Perhaps you’re confident that you’ll receive a sizable return that you don’t need immediately and that you don’t need to hire a tax professional. Even so, it is prudent to file early to deter scammers who may attempt to cash your tax refund on your behalf.
If fraudsters obtain identifying information such as your Social Security number and date of birth, they will submit a tax return and collect your refund as swiftly as possible, explains Vande Guchte. Then, when you attempt to file your tax return in March or April, it is refused because someone has already filed using your Social Security number.
You will then have to prove to the IRS that the return they have on file is fake, which might delay you collecting the money you are owed, according to Vande Guchte. This process requires time and knowledge.
This does not imply that you should file online as quickly as possible to beat the fraudsters. The advice of tax professionals is to wait to file until you have all of the relevant documentation.
Because these records are sent to the IRS by businesses, the agency will know if your tax return is missing information. In such a case, you will be notified, which may delay the filing of your tax return.
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