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We already knew that the US income tax day deadline would revert to April 15 in 2024, but now we know the first day that taxpayers can file their returns this year. The IRS announced on Monday that the agency would start accepting 2023 tax returns on Jan. 29, 2024.
If you're looking maximize your refund, avoid scams and get your money sooner, consider filing your 2023 tax return as early as possible. Last year, almost 19 million people filed during the first week
Whatever you do, don't wait until the last minute. Not only will tax procrastination slow down your tax refund, it can create all sorts of stress, especially if you're not sure whether you owe money or will be getting a tax refund.
Need more motivation? Check out all the benefits of starting your taxes as soon as possible below. For more tax tips, learn whether you need to pay taxes on Society Security benefits and read about the new tax change for income from payment services like Venmo and CashApp.
Reason No. 1: Get your tax refund money as soon as possible
The best reason to file your taxes early is to get your money sooner if you are expecting a tax refund. About two-thirds of taxpayers who filed returns on time last year received tax refunds averaging more than $3,000.
If you overpaid your taxes over the course of 2023, the IRS is holding onto your money and there's no reason not to get it back sooner rather than later.
If you get that potential $3,000 in February instead of May, the three-month difference adds up to about $30 you could earn at 4% APY in a high-yield savings account. And of course, you could also use that money for pressing issues, like home or car repairs.
The IRS allows itself 45 days to issue your tax refund without paying interest, but most tax refunds arrive within three weeks of filing a return.
Reason No. 2: Give yourself time to prepare if you owe money
When you aren't expecting a refund from the IRS, you might have an even more pressing reason to file early -- to figure out how much you owe. Regardless of when you file your tax return, you don't have to pay any taxes that you owe for 2023 until the tax day deadline of April 15, 2024.
As someone who has owed a significant tax burden in past years, let me tell you straight: It's terrifying to learn that you owe the government a lot of money right before taxes are due. My hard-earned guidance: Figure out if you owe the IRS more money ASAP, so that you can prepare to pay your tax bill in April, or explore your options for setting up a payment plan with the IRS.
Reason No. 3: Reduce the risks of tax fraud and identity theft
Tax fraud and scams are big business. Between 2021 and 2022, the amount of fraudulent tax refunds identified by the IRS increased from about $16 million to over $800 million. This sort of tax fraud mostly occurs when someone else files a tax return with your name and Social Security number to claim your tax refund.
One of the best ways to prevent tax-based identity theft is to file your tax return early before anyone else can file one in your name. The sooner you file your taxes, the less likely you are to have your tax refund ganked.
If you're not able to file early, consider creating your own Identity Protection PIN on the IRS website. You'll need to create an online IRS account first, but once you've created your six-digit PIN, no one can file a tax return in your name without that secret number.
Reason No. 4: Time to test-drive tax software
One great aspect of tax software is that all of the leading services will let you complete your entire tax return and see the amount of your tax refund or how much you owe for no cost at all. You pay for tax software when it's time to file or you want a specific service like one-on-one support.
Starting your taxes early will give you time to test the available services for yourself and choose the one that you like best. Any of the CNET picks for best tax software in 2024 will help you complete your return and optimize your tax refund, but they all have unique interfaces, custom help features, variable prices and differing levels of support for various tax forms.
By starting to file your taxes early, if you get frustrated with one service or can't find the answers you need to complete your tax return, you have time to try another one.
Reason No. 5: Find out early if you need help with your tax return
If you're not quite certain about handling your own tax return, getting an early start on your 2023 taxes will quickly help you determine whether you need help. If you do start your taxes early and find yourself in trouble, you'll have the opportunity to hire a tax pro before they're all booked.
You can also get free tax help from a qualified tax resource, such as IRS Tax Assistance Centers, Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs, AARP Foundation Tax-Aide or MilTax for veterans. Note these resources will be more in demand and harder to book as the tax deadline nears.
Reason No. 6: Reduce the stress of filing your taxes
Completing and submitting your tax return can be a stressful experience. A TaxSlayer survey found that 28% of people said it would be easier to go without a mobile phone for a week than to file their tax returns.
The complications of the federal tax code can lead to moments of frustration and anxiety for even the most prepared tax filer using the best tax software. Starting your taxes early and avoiding the April time crunch gives you plenty of opportunity to take your time and step away for a day or two or even a week before you start working on your taxes again with fresh eyes and a clear head.
Reason No. 7: Save money on tax software
The patterns of pricing for online tax software aren't set in stone, but in general, companies will increase the prices for their products as the tax deadline draws closer. Major players like TurboTax, H&R Block and TaxSlayer have also been known to offer discounts and coupon codes on their software early in the tax season.
For more tax tips, learn about the all the tax credits and deductions that homeowners can take.
