GRAND RAPIDS, Mich. (WOOD) — Tax season is here, and we know it can be a bit daunting for some. 24 Hour News 8 spoke with a local financial professional, Kelly Gilbert with Eminence Financial about four reasons why you should file early.
One of the first pieces of advice is giving yourself plenty of time will cut down on mistakes. Especially, with the new tax law changes, it could cause extra confusion.
“By simplifying the tax code, they have removed a lot of the small little deductions we used and combined them into big clumps to try to make it simpler,” said Gilbert. “It will help some people and will hurt others, and until you do your taxes this year, you’re probably not going to know the full extent of those changes.”
Some of the most common mistakes on tax returns are missing numbers, like Social Security or bank account numbers for direct deposit. Simple math errors and misspellings are also on the list of some of the most common mistakes. A mistake made could lead to penalties or audits.
Filing taxes early could protect taxpayers from identity theft. Identity theft is a concern every tax season. All identity thieves need is a name and tax ID number to file a claim electronically.
By getting tax returns in early, the IRS is more likely to recognize a fake return being filed. If you think you have been a victim of tax fraud, here are resources to report a claim.
Filing early means taxpayers will know what they owe sooner rather than later. This could give people more time to set up a payment plan to put money aside. If taxpayers are used to getting a refund, they may be in for a surprise this year because of the new tax law changes. It includes changes to the withholding tables.
“Here we are in 2019, were filling out our 2018 taxes. Yes, this is the first year we will experience what these changes really did to us,” said Gilbert. “I’ll tell you what we have a tax preparing firm division right here with Eminence Financial, and we still are having a hard time until we do your taxes to really know the full impact for all of our clients.”
If taxpayers are withholding too little from paychecks, they will owe money from the IRS this year. If you owe money to the IRS, the cut off day to pay is until April 15.
If taxpayers don’t pay the bill in full, fees and interest will start accruing.
Another reason to file early is to get your money back early. Most people who file taxes are due a refund, although that could change this year with the new tax law in place.
The average refund is $2,000. In Michigan, the average refund is $2,491.
The quickest way to get your money back is by filing electronically. Also, signing up for direct deposit could help taxpayers get a refund back even sooner.
” Do it early, get some time, and figure out how those tax changes affected you this year. Those are probably the two most important,” said Gilbert.