The benefits of filing your tax return early

The holidays may still be fresh in our minds, but tax season is already here! Here are two great reasons for filing your tax return early this year, especially if you’re getting a refund.

You’ll get your refund faster. According to the IRS, the average refund nationwide is about $3,000. That amount of money can go a long way towards a down payment and closing costs on a home, especially if you qualify for a low-down payment or even no-down payment home loan. At PRMI, we work with many low-downpayment and even no-downpayment financing options, such as the FHA (Federal Housing Administration), VA (Veterans Affairs) and the USDA (U.S. Department of Agriculture) home loan programs. *Closing costs and fees may still apply.

It helps prevent ID theft. The IRS says that filing as soon as you can in the tax season helps reduce your chances of being a victim of refund fraud, a fast-growing type of identity theft that happens when a criminal uses your Social Security number and other personal information to file a fraudulent tax return before you file a legitimate return. Any refund they claim on your behalf is sent directly to their address, not yours. Sounds pretty crazy doesn’t it?

In recent years, the Internal Revenue Service has paid out billions of dollars in refunds later discovered to be fraudulent. The IRS is working to make it more difficult for criminals to participate in refund fraud. But it’s still expected to be a major problem this year. Refund fraud only works, however, if criminals file a return with your personal information before you do. If they file afterward, their request automatically will be denied. That means the more quickly you file your return, the less of a chance you have of becoming a refund-fraud victim.

Right now, you might be waiting on all the paperwork you’ll need to file your tax return. If that’s the case, just prepare as much as you can. When those final required pieces of documentation arrive, you will be ready. Experts recommend filing early even in cases where taxpayers owe money to the IRS. Filing early doesn’t mean you have to pay the IRS early; if needed, you can wait until the tax payment deadline to pay what you owe.