It’s tax talk this week and a good time to understand why you should file your taxes on time. Procrastination is indeed a horrible time stealer, so not worth it. Studies have shown that a number of taxpayers will wait until the week of the deadline to file their taxes. How about that?
There are many reasons why you should file your taxes, but we’re not just talking file them, but filing on time is the KEY.
More Chances of Finding and Fixing Mistakes
When you file on time, chances are you have the time to review and/or consult with an accountant prior to submission. You are more likely to catch any errors unlike when you wait till the deadline.
Pay attention to the little ‘foxes’:
- Choosing the wrong filing status
- Incorrectly entering your Social Security Number (USA) or Social Insurance Number (Canada)
- Not updating your address
- Applying the incorrect deductions to your specific situation
Getting Paid (sort of)
When you file on time, you get the monies owed to you (a.k.a. Refund) back. Most employees get into the Refund situation because way too much money has been paid in taxes to the Tax man.
This refund is your money and shouldn’t have been given away in the first place, but that’s a discussion topic for another day. Do file on time, so you can get your money back on time and can use to invest or pay down debt. If the reverse where true, the Tax man would be charging you interest and penalties, so think of it you’re loaning the Tax man money interest free, you’re getting the short end of the stick here.
Plans to Buy a House or Go back to School?
If you plan to buy a house and for the most part any huge financial commitments, one of the documents you’re asked to produce is a copy of your Tax returns.
You need to show proof of income for yourself, so filing your tax returns on time owing or not is a good habit. Then you’re not scrabbling to have this completed, which increases your chances of making mistakes (see number 1), which could end up costing you.
BONUS Reason to file your taxes on time is ensuring identity theft fraudsters don’t beat you to it. Yikes! There are unfortunately a bunch of criminals that wouldn’t hesitate to take over your life and once they have your Social Insurance or Social Security Number they’ve got all they need to assume your identity including filing taxes and getting your refund (money). Do guard yourself and financial documents; shred; shred; shred. Don’t just toss statements in the recycling bin better yet switch to e-statements.
Take safety measures to keep your Social Security / Social Insurance numbers secure and file your taxes early.
Till Next Time,