Yes, the earlier you file, the earlier you’ll get a return. But not everyone gets a return, and that’s not the only reason to file early. With the implementation of the Tax Cuts and Jobs Act, there are going to be some surprises when filing your taxes this year. First, you may owe when you’d normally get a refund and second, the forms – and the way deductions work this year – are different. It’s going to be very important to file early, and lean on a tax professional this year. Here are six reasons why.
Filing Early Helps Protect You
Tax season is a popular time of year for identity thieves. Getting your tax return to the IRS as quickly as possible prevents them from beating you to the punch and collecting your refund.
Identity thieves are on the prowl to get as much money as they can, which means in addition to stealing your refund and identity, they’ll likely pull all kinds of stunts to make the refund higher. Remember, this is in your name, so guess who gets in trouble with the IRS? It’s a mess to deal with and there’s no guarantee you’ll get your money back.
How You File This Year May Change
Nothing like considering a new filing strategy at the last minute! The Tax Cuts and Jobs Act has increased the standard deduction this year, which means if you normally itemize, you may want to reconsider. The new deductions are:
- $12,000 for Single filers and married taxpayers who file separately
- $24,000 for married couples filing jointly
- $18,000 for heads of household
There’s also a new $10,000 limit on your total state and local tax deduction (SALT). If your SALT deduction is typically more than $10k, you may want to take the standard deduction if you don’t have many other deductions.
These decisions are important to consider, which is why getting a head start on your taxes (and hiring a pro), is going to be important this year.
More Time to Save Up if You Owe
You may be surprised that instead of getting a refund this year, you owe money. According to a report by the Government Accountability Office, more than 30 million Americans may owe taxes this year due to underwithholding. This is due to the elimination of the personal exemption under the new tax law. That surprise is better to get now than in April when you have less time to cough up the money.
Tax Simplification is a Myth
You may have heard that the Tax Cuts and Jobs Act made filing taxes easier. We’re here to tell you that’s a myth! For example, there four new schedules to navigate on the new Form 1040. That’s certainly not easier than the old form. This means filing is going to take longer than usual as there are more things to work through. It also means taxpayers should not try to tackle filing on their own this year and should instead seek the help of a professional.
You Don’t Have to Fight for An Appointment
You know when the absolute worse time to get a tax appointment is? Late March/Early April. The best time is now – because everyone else is a procrastinator. Tax pros are not as busy in January and February, which means their schedules are more open and they have more time to spend with you.
It’s off your plate
Doesn’t it just feel better to have your tax return behind you? Why have it looming over you for months when you can just get it done now? Schedule your appointment with one of our tax professionals at Peoples Tax. We can answer all of your questions regarding the Tax Cuts and Jobs Act, and help make filing your tax return a breeze!