Last year the date was Jan. 29. This year’s date has not yet been announced, but experts believe it might be delayed due to the many changes in tax law following passage of the Tax Cuts and Jobs Act (TCJA). Even if you don’t file early, there are reasons to begin preparation before the end of the current year.
One of the most important decisions you will have to make this year is whether to take the new, larger standard deduction or itemize. Single filers and married taxpayers who file separately can now claim a $12,000 standard deduction. For married couples filing jointly the standard deduction is $24,000. Heads of household get a deduction of $18,000. The sooner you begin working on your tax return, the sooner you will be able to decide.
Last year 73% of taxpayers received an average refund of $2,825. If you have money coming to you, there’s no reason to let the government keep it longer than necessary. Filing sooner means a faster refund, because early on the IRS won’t be as busy early in tax season as it will be in April.
Filing early gives you time to fully understand changes to tax law or deal with changes in your life that alter your filing status. Mistakes from rushing at the last minute can trigger audits that can lead to penalties and interest. Given changes brought on by the TCJA, this point is more important than ever this year.
Some people count on their income tax refund to pay major bills. Filing early puts the money in your hands sooner and may help you avoid taking out an expensive short-term loan to cover those expenses, especially if you’re still paying off your holiday bills.
Buying a home or going back to college requires information from recent tax returns. Preparing your taxes early will provide you with the most up-to-date information available.