Should You File Your Taxes Early?

By Maurie Backman Markets Fool.com

Though taxes are typically due on the 15th of April, this year you'll get an extra three days to submit your return. The reason? Any time April 15 falls on a weekend, the tax deadline is pushed to the following Monday, but because Monday, April 17, is Emancipation Day (a D.C. holiday), filers have until Tuesday, April 18, to get their taxes in.

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That said, you still shouldn't wait until the very last minute to file your taxes. In fact, there are actually a number of good reasons to get your taxes in early.

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Get your money back sooner

Not only did 73% of tax filers get a refund last year, but the average refund amount hovered in the $2,850 range. If you're anticipating a refund this year, filing your taxes early should basically be a no-brainer. As long as you have all of your documents and paperwork in order, filing early means you'll most likely get your hands on that cash sooner. In fact, the IRS expects that it will issue more than 90% of its refunds in 21 days or less from the time it receives the corresponding returns.

If you're sitting on debt (whether it's general debt or bills left over from the holidays), having your refund in hand sooner could save you a nice chunk of money in interest charges. Even if you don't have debt, there's really no reason to give the government access to your money for a longer period than necessary, so it pays to file early either way.

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Keep in mind, however, that if you file a paper return, you may have to wait longer to get your cash back. Though refunds from electronically filed returns are typically issued within three weeks, it usually takes six to eight weeks to receive a refund from a paper return. Not only that, but if you file your taxes early and do so electronically, you should be able to check your refund status within 24 hours. File on paper and you'll probably wait a solid month before your refund information even becomes available.

Prevent tax fraud

Tax fraud is a growing problem and, unfortunately, it's easy enough these days for crooks to pull off. Typically, someone will get his or her hands on your personal information, file a return in your name, and attempt to claim your refund.

Because the IRS is equipped to flag duplicate tax returns, if this happens and you then attempt to file your own return, yours will get rejected because there will already be a return with your Social Security number in the system. At that point, the IRS will need to figure out which return is legitimate, and you'll be sitting in limbo while that happens -- not to mention waiting on your refund.

On the other hand, if you file your tax return early enough, you just might beat those criminals to the punch. Then, if someone attempts to file a return using your information, that fraudulent return will get rejected instead of yours.

Give yourself time to pay your tax debt

Not everyone gets a refund during tax season. If it turns out you owe the IRS money and you're unable to pay off your balance in full, you'll face a late payment penalty for whatever amount you fail to come up with. But if you file your return early, you'll buy yourself a little extra time to come up with a game plan. That might involve selling off some possessions to scrounge up the cash or working a few extra shifts on the job to generate extra earnings.

Remember, if you owe the IRS money but file your return early, you don't have to pay off your balance until the April 18 filing deadline. Even if you owe money, you have nothing to lose by submitting your return ahead of schedule.

One final point to consider is that the sooner you file your taxes, the sooner you can check that task off your to-do list. Filing a tax return can be a time-consuming process, so the earlier you get it done, the less stressed you'll be.

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