What are the Benefits of Filing Taxes Early?

Are there really benefits to filing your taxes early? Peter Keller, CFP® explains that you will get your refund earlier, and if you file electronically, you will receive your refund even sooner. It could also help you qualify more for a loan, financial aid or purchasing a home.

Transcription:

"Hi, I'm Peter Keller and I'm a Certified Financial Planner™ with Pure Financial Advisors, and welcome to Question of the Week. This week's question is: is there any advantage to filing my taxes early? Certainly there is. First of all, the earlier you file--the quicker you'll get a refund if you have a balance that's coming back to you from the government. If you file electronically, that'll come a lot sooner than if you are paper filing. So, consider getting a refund earlier by electronic filing.

Two, if you have a balance due, you may consider filing early so that you have time to make necessary accommodations for paying the balance due. Then, if you're also going through a change in your life where either education is pressing or you're purchasing a home, your financial records are going to be needed in order to qualify for those loans or financial aid or purchasing a home. So, you might want to get your taxes done early so that data can be used in qualifying for those loans.

Certainly avoiding an extension. More often than not, when people wait until the last minute it's more of a lack of organization than it is anything else. If they have a balance due, then if you file an extension you're going to be subject to penalties and interest. The earlier you file, the more that could be avoided.

My name is Peter Keller, that was your Question of the Week."

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