Few people love tax time, so it can be challenging to convince employees of the importance of completing their taxes sooner rather than later. Although the deadline this year is April 18th, putting off taxes until that due date can be risky. It may be too late this year, but take this opportunity to help educate your employees on the reasons not to procrastinate on next year’s taxes.
Missing Paperwork and Added Complexity
If your employees haven’t changed jobs, have no dependents, and have no major changes to claim when tax time comes around, they may be lulled into a false sense of security and assume taxes will take a mere 15 minutes to button up. There may be missing documents that need to be followed up on and collected, special considerations to account for that weren’t anticipated, or last-minute emergencies that take priority over tax filing. With no buffer, taxpayers can accidentally slide right past that due date while trying to get their tax affairs in order.
Getting Help if Necessary
If an employee finds that they need professional assistance with their taxes, seeking out a qualified tax expert will be less of a challenge earlier on in the season. If they wait too long, good help may be hard to find as tax professionals become pretty booked toward the end of tax season. According to the IRS, 20-25% of taxpayers usually wait until the final two weeks of tax season to file. This means a competitive market for those taxpayers who find they need professional assistance.
Preventing Identity Theft
Identity theft can be draining on emotions and finances. And identity thieves are just waiting to prey on the procrastination of taxpayers each season to get their hands on unallocated refunds. In fact, the IRS listed identity theft as part of its “Dirty Dozen” tax scams for 2015. It’s common for a thief to file an income tax return in another’s name and collect the refund. If this happens, your employees may find themselves in a bind, struggling to explain their unfortunate situation to the IRS and unable to claim their refund. Beating identity thieves to the punch is a benefit of the early bird taxpayer.
Preparing for a Payment or Using a Refund
The sooner your employees understand their refund benefit or payment liability, the sooner they can plan how to acquire the money to fund that payment or use their refund to their best advantage. If they’re waiting for a refund to pay down debt, make a purchase, or pay for an upcoming expense, a check in-hand at the beginning of the year can be put to good use faster. Oftentimes tax returns are a necessary part of paperwork for another life event, such as a financial aid application, or a home purchase. On the other hand, if they owe a payment, it may take them some time to gather those funds. Without adequate preparation, taxpayers can find themselves hard up for cash.
Stave Off Stress
Nothing beats a calm and productive team, and employees who are stressing over tax time can bring that energy into the workplace. Filing early gives taxpayers the time to slowly and methodically gather data, understand their financial position, look over their tax return at length, organize their tax filing, avoid mistakes, and prevent overlooking deductions.
Many employees begrudgingly take to their duties during tax season, but there are a lot of great benefits to filing early. Your employees can avoid tax scams, choose from a broad array of tax professionals, gather missing documents, understand their financial position, and lower their stress as that looming deadline creeps closer.