Pros and Cons and Filing Your Taxes Early

Pros and Cons of Filing Your Taxes Early

Pros and Cons and Filing Your Taxes Early

Pros and Cons of Filing Your Taxes Early

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Do you rush to file your tax returns as soon as possible? Do you gather all your documentation and stand at the IRS virtual door on opening day? As with everything, filing early has its pros and cons, but is filing early really a good idea?? Like many things in life, the answer is, “It depends.”

Not every situation is conducive to filing early. Filing for an extension and putting it off as long as possible may make more sense for some filers. Read on to learn the good, the bad, and sometimes the downright ugly of filing early and why waiting might be best.

The Good

Your security. This is probably the best reason to file early and therefore makes #1 on my list. Filing your taxes early can protect you from would-be cyber thieves.

The IRS will only allow one return per social security number, and it’s first come first served. If your social security number has been hijacked, you will get a rejection notice from the IRS.

At this point, you will need to file a claim and start the process of proving your identity, and you will have to show proof you weren’t involved in committing fraud against the IRS. Most of these cases do not get resolved until after tax season. Protect yourself now! Get ahead of the cybercrooks by protecting your computer and devices. Enroll in Cybersecurity At Home and discover how quick and simple it is to secure your home network.

Receive your refund sooner. Obviously, It’s your money! Who doesn’t want their money as quickly as possible?

If you’re owed a tax refund, then the earlier you file, the faster the refund. This is especially true if you’re going to mail your return (yes, 30% still use the mail). As you can probably imagine,  the IRS is less busy in February than in April.

Be free of the mental clutter. It has to get done one way or the other. It makes sense to get it over with and free yourself from it hanging over your head. Life is easier if you don’t procrastinate. Just do it.

The post office is less crowded. Remember what I said about 30% still mail their returns? That’s over 62 million of the adult US population trying to use the post office at roughly the same time. Many people don’t want to file electronically for a variety of reasons, one being security! Avoid the crowds and file early.

You won’t be late. I have a knack for stating the obvious. How can you be late if you file early?

Many of us plan to do things with the best of intentions, then life happens, and they usually end up waiting until the last minute.

I don't have to point out how risky that can be. What if you find out that you’re missing some key piece of information? What if you get sick? There are too many variables in life to put off something like filing your tax return until the last minute.

You’ll be more accurate. Starting your return early will keep you from rushing through it, thus ensuring that you have everything you need and that it’s done correctly. Remember, slow and steady wins the race. If you’re not rushed for time, you’ll be more likely to avoid errors.

The Bad

Why pay early? You want to file early when you expect a refund, but why would you want to pay early? It's your money!

If you owe the IRS, you’ll want to keep it as long as you can, maybe even make a little more in interest. It makes sense to keep your money as long as you can.

You might end up having to file a corrected return later. W-2s and 1099s are due February 1; however, It’s not uncommon to get them late or for providers to come back a month after sending your documentation and say, “Oops, we made a mistake.” Taking a little extra time to file your return will give you that much more time to gather your documents and ensure that you don’t have to do it more than once.

The Ugly

Early filers have a greater chance of being audited. If you file early, are you more likely to get audited? I’m not sure if we can ever answer that definitively. Still, it is believed that if the vast majority of the population is filing at the last minute, the odds of being selected are minimal due to the sheer number of tax returns the IRS agents must handle. Truth or fiction? No one knows, but why take a chance.

Consider the above factors when deciding to file your tax return. If you’re in a situation that puts you at risk of being audited, and you don’t need your refund or copies of your return right away, it can be wise to wait.

On the other hand, if your return is simple, you’re due a refund, and you need the refund now; there’s no time like the present to file your return.

Assess your situation and make the smart choice for your circumstances.

Plan Ahead to Take the Stress Out of Tax Day


Plan Ahead to Take the Stress Out of Tax Day


April 15 is a dreadful day for many people, simply because it's the deadline for filing income taxes. The truth is this day doesn't have to be ominous or overwhelming. You can reduce your stress and improve your financial future simply by getting a jump on your income tax preparation early.

Gather your records early. Take the time to gather all of your documentation together beforehand so you have everything you need to get started. Gather your past tax returns as well, as these will provide valuable insight for where you can save money on your taxes in comparison to previous years.

Look to government resources for help. The Internal Revenue Service website and taxing authority websites for each individual state are valuable resources for individuals seeking tax help. Use these free resources to your advantage to get some extra assistance while filing your taxes.

Make last minute tax-deductible purchases. Especially if it looks like you'll owe money on your return, before the end of December, make any purchases that can give you an extra tax deduction. If you're self-employed, purchase necessary items for your business.

Donate cash or items. Remember to make your donations before December 31st so you'll receive your tax deduction for this year. Be sure to get a receipt!

E-File your return. There are a number of benefits to e-filing, or electronically filing, your tax return. For example, most E-file software will compute tax credits and deductions for you based on the information that you put in. Plus, if you're getting a refund, it's quicker than mailing your return.

The Bottom Line

The best way to get the most out of your income taxes is simply to get a jump on them early. With planning and preparation, you can maximize your deductions and simplify the filing process without stressing yourself out along the way.

You Have To Know Where You Are


You Have To Know Where You Are

To Get To Where You Want To Be


Are you ready to take your business to the next level and watch some explosive growth unfold over the coming months? That's Great! Before you start to plot and plan what you want to do to make that happen, it’s important to stop and look at where you’re at right now.

Business planning for future success is all about data. You can work most efficiently and spend your time and money most effectively if you know exactly where you are starting from. By recording data, you can start to see what’s working, what isn’t, and what trends are starting to play out. And it all starts with recording where you’re at right now.

Let’s take a look at some of the things you want to record. First though, you should decide how you want to record this information.  You can write it down by hand in a notebook, open up a word document to do it digitally, or use a spreadsheet. I prefer a spreadsheet because I have the option to have it calculate fun additional information like weekly and monthly averages and even map it all out in graphics to help me get a clearer picture...and well, it's a spreadsheet! Truly my idea of a good time!! No Kidding!

Traffic – To grow you need to expand your reach. That means getting more traffic, but also engaging the people that come to your site by encouraging them to click around and read more. Good things to keep track of are total visitors, unique visitors, bounce rate, and of course where the traffic is coming from. We'll talk more about this in upcoming segments.

List / Subscribers – Your next goal is always to get these people on your list. If you don't have a list, you need to start one! Digital Marketing is no joke, and a necessity for today's businesses. Here you want to track total number of subscribers, conversion rates for each of your opt-in forms and pages, open rates for your emails, and also unsubscribes. As you start to collect and review this data regularly, you’ll get a much better picture of your subscribers. We'll cover digital marketing another time.

Customers – Subscribers are great, customers are better. Start by keeping track of how many total customers you have and how many purchases per day, week, and month. Other good numbers to look at are total lifetime value of your average customer, repeat purchases, and refund rates.

Income & Expenses – Last but probably should be first, look at your bottom line. This is your typical accounting data. You want to keep track of your income as well as your expenses. With those two sets of numbers, you can easily calculate your overall profit. I find it helpful to look at profit for the month, but track income on a daily basis.

Yes, you can look at most of this data in various different places like Google Analytics, your shopping cart, and your autoresponder service for example, but it’s important to have it all in one place. This makes it much easier to connect the dots and see the relationships between the different sets of numbers.

Now that you have your initial data collection set up, make it a habit to update the numbers regularly so you can see what’s working, what isn’t, and how much you’re growing as you move through the coming months and years.