Delaying on Taxes Can Cost You Money: 5 Reasons to File Taxes Early
Kinetic Financial addresses the primary reasons for filing your taxes as soon as possible.
LOS ANGELES, March 8, 2023 /PRNewswire/ -- According to Ali Hashemian, president of Kinetic Financial, many of us make the mistake of procrastinating on important tasks. For example, almost everybody can think of a time when they were supposed to call or visit a family member but delayed for one reason or another. However, there is one family member you should not keep waiting because he can penalize, fine, or even incarcerate you if he is ignored.
You may not be directly related, but you inherited this family by living here in the United States. We are talking about the infamous Uncle Sam. Whether or not you like him, you need to pay attention to him or else you face the possibility of dire consequences.
Luckily, you only need to deal with him a few times per year and April 15th is the most important date. Think of it as your mean Uncle's birthday: you might not be fond of it, but you don't want to miss it.
Here are five reasons it may benefit you to tackle this annoying task early in the year:
- Faster Refund - Many people receive a refund for taxes that were overpaid throughout the year. This refund can be used to pay off debts early and save on interest payments or be invested early to earn more interest or gains. Either way, this is money you can put to your advantage, and the faster you put it to work for you, the better off you are.
- Planning Payments - Some people will owe money because they underpaid taxes throughout the year. Underpaying may be a good strategy, but it is always beneficial to know exactly what you owe as early as possible. That way you can come up with a plan to make payments without incurring penalties or draining assets.
- Prevent Identity Theft - This is something most people don't think about. Unfortunately, cyber security is a major problem in our modern society. Statistically speaking, most people submit their returns electronically in the last few weeks before the filing deadline. This is prime phishing season for hackers (all puns intended).
- Reduce Mistakes - People that spend less time reviewing their returns will inevitably have to rush and, thus, miss more mistakes that would have been caught otherwise. The same is true for tax professionals helping prepare the return. No matter how good they are, when a person has less time and more demand from clients trying to file last minute returns the quality of their work diminishes.
- Avoid Fees or Penalties - If you underpaid in taxes, you may owe back taxes and late penalties. Even if you file for an extension, you are obligated to pay estimated taxes on time. Regardless of your circumstance, it is usually in your best interest to start this process as early as possible if you want to avoid any additional fees or penalties. Owing money in taxes is already painful enough. Make sure you do everything to avoid additional costs or expenses by planning early.
When commenting on the list above, Hashemian says "I hope this list incentivizes you to take care of mean old Uncle Sam as early as possible. Maybe it even reminded you to call your mother every now and then." While there may be strategic reasons to extend and file your returns late, there is no strategy in procrastinating your planning when it comes to tax efficiency. "A failure to plan is a plan to fail".
About the Author
Ali Hashemian is a CERTIFIED FINANCIAL PLANNER® professional, a CHARTERED FINANCIAL CONSULTANT®, and he holds a Master's in Business Administration from the University of San Diego. He is also the bestselling author of OVERTAXED: Six Powerful Tax-Free Investment Strategies — and How to Use Them to Lower Taxes, and he is the host of the television show, Spot on the Money.
As the Founder and CEO of Kinetic Financial, Ali works with individuals, families, and corporations in developing and implementing detailed strategies for financial plans, taxes, retirement plans, asset protection, and estate plans. He applies his experience with strategic planning to each case, Ali works diligently to create lasting relationships with the people he interacts with on both a personal and professional level.
To learn more about Kinetic Financial and its holistic financial planning approach, please visit www.kineticfinancial.com
Advisory services offered through Kinetic Investment Management, an SEC Registered Investment Adviser.
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SOURCE Kinetic Financial
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