When to consider filing early

The tax filing season for 2024 tax returns is now officially open per the IRS.

So, when is the best time to file your tax return?

Sometimes it makes sense to delay filing as long as possible, but on other occasions an early filing of your return makes more sense.

Here are some of the more common reasons to get your return done as soon as possible.

•To get your refund. There’s no reason to let the government hold onto your funds interest-free, so if you think a large return is coming your way, file as soon as possible. While legislation delays receiving refunds for tax returns claiming the Earned Income Tax Credit and the Additional Child Tax Credit until after Feb. 15th, the sooner your tax return is in the queue, the sooner you will receive your refund.

•To minimize fraud risk. Once you file your tax return, the window of opportunity for tax identity thieves closes. These thieves work early during the tax filing season because your paycheck’s tax withholdings are still in the hands of the IRS. If thieves can file a tax return before you do using your Social Security number, they may be able to steal these withholdings via a refund that should have gone to you!

•To avoid a dependent dispute. One of the most common reasons an e-filed return is rejected is when you submit a dependent’s Social Security number that has already been used by someone else. If you think there is a chance an ex-spouse may do this, you should file as early as possible.

•To deliver your return to someone who needs it. If you are planning to buy a house or anticipate any other transaction that will require proof of income, you may wish to file early. This is especially important if you are self-employed. You can then make your filed tax return available to your bank or other financial institution.

•To beat the rush. As the April 15th tax filing deadline approaches, the ability to get help becomes more difficult. So, get your documentation together and schedule a time to get your tax return filed as soon as you can. It can be a relief to have this annual task in the rearview mirror.

Whatever your situation, ensure your filing experience is a planned event. The closer to the filing date, the more stressful your experience could become.

One of my primary objectives is to help you achieve your financial goals through a holistic approach that is tax-efficient in my wealth management and tax resolution practice.

For more information, visit www.fredtfoxiii.com.