Tax filing season officially opens Friday, and it may pay to be an early bird. NY1's Tara Lynn Wagner filed the following report.
Ready? Set? File! The last day of January is the first day of the 2014 tax season, and while lines at the post office on April 15 prove that plenty of people procrastinate, there are several good reasons to be the early bird.
We'll start with the obvious.
"The sooner you file, the sooner you get your refund," says Joseph Falanga, managing director of UHY Advisors.
The fastest way to get your money the is to e-file and use direct deposit. The IRS says that in most cases, you can expect to receive your refund less than 21 days after they receive your return.
Falanga says the earlier you file, the faster that process will likely go.
"As you get closer to April 15, there's more returns being filed on a regular basis, so it takes them a little bit longer to process and, therefore, to give you your refund," he says.
Filing early can also help prevent mistakes, since you're less likely to invert numbers or overlook deductions if you aren't frantically racing against the clock to get it done.
It can also help protect you from fraud. In 2011, the Treasury Inspector General for Tax Administration found that the IRS had sent out roughly $3.6 billion to more than 1 million people filing fake tax returns using stolen Social Security numbers. The red flag often isn't raised until the legitimate taxpayer attempts to file with that same Social Security number.
"If you file early, it negates the opportunity for someone who's stolen your identity to use your information because you've already filed and you're in their system," Falanga says.
If you aren't expecting a refund, you probably aren't in a big rush to get your taxes done. Keep in mind, though, that you don't have to pay what you owe until the April 15 deadline. You can still file early and use the next few months to your advantage.
"You at least know what your tax obligation is going to be, and if you owe money, you can at least start to work on getting the cash to pay it because you really have to file and pay by April 15," Falanga says.
Miss that deadline, and you'll be paying penalties and interest.
For more information on the 2014 tax season, to print forms or to file your taxes online, visit irs.gov.