Get Your Taxes Done: The Advantages of Filing Early

TaxesEvery year, millions of Americans engage in our real national pastime -- procrastinating on our taxes until the last minute. But before you resign yourself to running out to the post office at 11:59 p.m. on April 17 to beat the filing deadline, you should be aware of the benefits of getting your taxes done early.

The biggest reason to file your taxes pronto is if you expect a refund. Early filing no only means you'll get yourself in line to get your refund sooner, but it also can have an impact on how quickly the IRS processes your return. If you wait until mid-April, then you may have to wait longer as the IRS deals with the last-minute deluge of filings.

Also, early filing is the only way to take advantage of a relatively new option the IRS offers. You can have your refund deposited directly into an IRA or health savings account and still have the money count toward your 2011 contributions -- but only if you file early enough to have the refund-transfer done by the April 17 deadline.

Need another reason to get your taxes ready early? How about to make it easier to get professional help on your return. If you use an accountant or tax preparer, scheduling during the last month of tax season can be a nightmare. The sooner you're ready to go, the better the chances that you'll get the help you need.

Finally, doing your taxes now ensures that an unexpected mid-April crisis won't leave you late in getting them done. Although you can apply for an extension, if you haven't paid enough by the April deadline, you could end up owing the IRS interest and penalties.

Counterpoint: Reasons to Wait

On the other hand, a few taxpayers have good reasons to wait before filing.

Sponsored Links
If your tax return is complicated due to factors like running a small business or having unusual investments, then you may not get the tax forms you need to complete your return until close to the April deadline. Even worse, in some cases, tax forms you've already received may turn out to have incorrect numbers. If you've already filed before you get the updated forms, then it creates a real hassle.

But psychologically, nothing's better than having your tax returns finished. Even if you owe money and decide to put off filing, having the envelope ready to go or the e-file form ready to send makes your life a lot easier.

For more on smart money moves:

Best Tax-Related Movies
See Gallery
Get Your Taxes Done: The Advantages of Filing Early

Admittedly, Brian DePalma's tale of the Chicago underworld is historically inaccurate, melodramatic and filled with some of Robert DeNiro's most egregious scenery chewing. But David Mamet's script gets a few things right, namely that Al Capone's bootlegging empire wasn't brought down by bullets or business rivals, but rather by his failure to file his tax returns.

Oscar note: it was nominated for four Oscars and brought home one -- Sean Connery won for best supporting actor.

Moral of the Story: Don't bring a knife to a gun fight. And don't bring a gun to a forensic accountant fight.

In this 2006 film, an IRS accountant played by Will Farrell hears a disembodied voice narrating his life. Upon further investigation, he realizes that the mystery speaker is actually a suicidal writer who has created him as a character in her latest book. Unfortunately, he is slated to die in the last chapter.

Moral of the Story: IRS agents are real people, too ... or are they?

Harry Johnson (Edward Herrmann) is a mild-mannered mailman until the IRS takes on his favorite aunt. When she dies of a heart attack in court, Harry declares war on the government -- and uses her extensive military surplus collection to quickly escalate his attacks.

Moral of the Story: When fighting the IRS, it helps to bring a tank.

Sure, it's tough when your king's in jail, his brother is scheming to take over the country, and another noble stooge is arresting the locals for poaching, but the straw that breaks the camel's back is the onerous taxes that Prince John decides to levy on the country. No wonder that Robin Hood and his merry band are popular with the locals!

Oscar note: Nominated for four Oscars, it won three -- for best art direction, film editing and original score.

Moral of the Story: Tax increases + skilled archers = Occupy Sherwood Forest

In between cringeworthy scenes of public humiliation, betrayal and flailing romance, this 2010 film offers an interesting look at the misfits who run the IRS. On the one side, hapless Barry Speck (Steve Carrell) crafts elaborate dioramas with mice; on the other, his arrogant boss Thurman Murch (Zach Galifianakis) attempts to use mind control on his employees and randomly threatens to audit his enemies.

Moral of the Story: On the dark side, if you underpay on your taxes, you'll have to pay interest. On the bright side, the IRS won't spank you.

In Cameron Crowe's classic, the path to teenaged love is filled with obstacles. But with the help of a boombox, a Peter Gabriel song and an IRS investigation that gets Ione Skye's disapproving father out of the way, John Cusack's Lloyd Dobler manages to get the girl.

Moral of the Story: If you want to keep your daughter away from deadbeats, be sure to pay your taxes -- and stay out of jail.

The Charlestown Chiefs hockey team are on their way out, until a scheming manager and a trio of childlike hockey thugs transform the team. But even after they raise attendance and inspire fans, the owner still decides to fold the team, rather than sell it. The reason? She can take a hefty tax write off for a failed business.

Moral of the Story: "Old Time Hockey" is no match for newfangled accounting.

A silversmith's apprentice who joins the American Revolution, Johnny Tremain falls in love, learns to shoot, listens to great patriots, and dumps tea into Boston Harbor. Along the way, the film gives a very Disney look at the birth of America.

Moral of the Story: Boston was a pretty boring place until taxation without representation riled up the locals!

When a hefty pile of unpaid back taxes threatens the orphanage where they grew up, Jake and Elwood Blues hatch a scheme to raise money, reunite their friends, and create beautiful music.

Moral of the Story: There's nothing like the threat of the taxman to get the band back together.


Motley Fool contributor Dan Caplinger is finishing up his taxes now. You can follow him on Twitter here.

Read Full Story

From Our Partners