Best Way to File an Early Tax Return

There is no need to put off filing your taxes until the eleventh hour, despite the fact that the majority of filers submit their forms on or around April 15 each year. In point of fact, submitting your tax return early might make sense for a variety of reasons, including the possibility of receiving your refund faster and the reduction of the danger of identity theft. This is an additional benefit of using a paid preparer.

Please take notice that the tax season for the year 2021 starts on Monday, January 24, 2022. This means that the Internal Revenue Service (IRS) will begin collecting and processing tax returns for the 2021 tax year on this day. Additionally, because of the national holiday, the day that most taxpayers must submit their tax returns is Monday, April 18, 2022.

Introducing the New Standard Deduction

Taxpayers have one of the most difficult choices when deciding whether to itemize their deductions or to take advantage of the newly increased standard deduction, which has been available since 2018. You are eligible for a deduction equal to double the standard amount if you are legally blind and at least 65 years old.

The Deduction Limit for State and Local Taxes

Your total deduction for state and local taxes (commonly known as SALT) is capped at $10,000 under the new tax law that went into effect in 2018. Suppose your SALT deduction is bigger than the new ceiling, and you don't have many other deductions. In that case, this restriction may be another reason for taking the standard deduction instead of itemizing your deductions.

Regarding this significant section of your tax return, getting a head start on your taxes can help you avoid making any blunders that may be considered embarrassing. If you file your taxes early, you'll get your refund quickly. You may prevent procrastination, offer yourself peace of mind, and cross this significant thing off your to-do list for the New Year if you file your taxes early. When the IRS announces that it will begin processing returns, you should send in yours as soon as possible so you can have this unpleasant duty behind you.

Early File Returns to Avoid Identity Theft

If you file your taxes early, you are far less susceptible to identity theft. You will submit your paperwork before an identity thief can use your name to submit it under their name. Unfortunately, you may not discover that your identity has been stolen until the Internal Revenue Service contacts you to inform you that there may be a problem with your return. If any of the following apply to you, the Internal Revenue Service warns that you should be on the lookout for possible identity theft connected to taxes:

• The Internal Revenue Service sends you a letter enquiring about a potentially fraudulent tax return you did not submit.
• Because you already have a Social Security number on file, you cannot submit your tax return electronically.
• You did not ask for a tax transcript; nevertheless, one was sent to you in the mail.
• You get a notification from the Internal Revenue Service (IRS) that an online account has been established in your name, but you did not create the account yourself.
• You receive a message from the IRS informing you that your existing online account has been accessed or disabled, even though you haven't done anything to trigger either of those events.

File Early to Avoid the Tax-Season Rush

If you file your taxes early, you will have more time to fully grasp any changes that may have been made to the tax law or to cope with changes in your life that may modify how you file your taxes. When time is running out, it's easy to become flustered and make mistakes, which may lead to audits and fines, and interest. Because of the changes that the TCJA brought about, it is more vital than ever before that we emphasize this fact.

Trying to Avoid Amended Returns

When you have a head start, you have more time to prepare an accurate tax return. If the return is wrong, it will certainly need to be revised. Returns that have been amended are subject to audit. In your pursuit of accuracy, here are some things you should keep an eye out for.

For the tax year 2017, private mortgage insurance, sometimes PMI, was not originally eligible to be deducted as an itemized expense. A tax reform that went into effect on February 9, 2018, allowed taxpayers with an annual taxable income of less than $100,000 to once again take a deduction for their private medical insurance (PMI).