Though it might seem like “drudgery” to file your taxes before they’re due in April, there are actually a number of reasons why filing might bring brighter smiles this spring.
Elizabeth Buffardi, founder of Crescendo Financial Planners joins Rob Hart on the WBBM Noon Business Hour to explain. She was getting her own tax documents together this week.
According to Buffardi, getting these documents organized ahead of time is “very useful, because then you have a lot of time to make corrections if they need to be made.”
That’s the first reason why taxpayers should consider an early filing. Buffardi also confirmed that an early filing doesn’t necessarily mean an early payment – those who owe the government can schedule their payments to hit in April even if they file earlier.
Here’s the really interesting part: “the great thing about filing in February and early March is that if you’re owed a refund, then you’re going to get it a little bit faster than if you file, you know, on the last day,” Buffardi explained.
“The other thing that’s great about filing early, especially if you have a refund is that it helps to prevent any fraudsters trying to file and claim that refund on your behalf,” she added.
For those getting tax refunds, Buffardi said that they could contribute it to an investment fund like a Roth IRA. Funds can also be used to pay down debt, or, in some cases for expenses like attending weddings.
Can’t decide? Buffardi recommends investing in an emergency fund.
“Even if you have debt, you still want to have an emergency fund because that’s probably how you got yourself into debt in the first place,” she said. “So, by having that emergency fund, you’ve got money in case your car breaks down or you have that unexpected medical bill or, you know, unexpected bill in general.”
As for how to receive refunds, Buffardi recommends direct deposit. She said it will not only hit taxpayer accounts faster, but it’s safer.
“If somebody sees that check from the IRS – even though it comes in what seems like a nondescript envelope – it’s still, you know, potential for a fraudster to kind of steal that thing and you never see that refund.”