SIOUX FALLS, S.D. (NEXSTAR) – Paying taxes isn’t fun, but you may not want to wait to file – especially this year.
Whether you’re dragging your feet after IRS warnings of smaller refunds or you got a deadline extension because you live in a designated disaster area in California, Alabama or Georgia, you should still file sooner rather than later if your situation allows, according to tax attorney Adam Brewer.
“If you’re truly impacted, like your documents are washed away and your house is destroyed, use the time,” Brewer said. “But if you’re otherwise ready to file I’d say get it knocked out to avoid unnecessary problems that could arise by waiting.”
Brewer says that, along with the obvious downside of having to wait longer to get a refund if you’re owed, there are three other reasons not to procrastinate on filing taxes this year.
One of the problems he’s referring to is potential identity theft, in which someone uses your identity to file a fake tax return under your name before you do, with the sole goal of getting the IRS to issue the maximum refund.
“Then you’re dealing with IRS identity theft units and having to file police reports and take all those steps to try and clear it up.”
Brewer says he sees a lot of taxpayers dealing with identity theft issues, a nightmare that can stretch on for months, or potentially more than a year before the legitimate funds are issued.
Withholding and other issues
If you end up owing money to the government, Brewer says it’s better to know earlier in the year so you can prepare for the 2023 tax filing season.
“If my client owes on their 2022 taxes, then we say OK, let’s have this conversation about how we’re going to avoid owing for 2023,” Brewer told Nexstar.
For wage earners, that could mean making adjustments so more money is withheld, for instance.
Taxpayers who wait until October, however, won’t have many pay periods left in which to make up a shortfall.
Possible government shutdown
In order to avoid potential economic disaster if the U.S. should default on the national debt, Congress must pass a measure to raise the $31 trillion debt limit this summer.
If Republican hard-liners can’t come to terms with the Biden administration and a government shutdown occurs, it could cripple the IRS’s ability to process the nation’s tax returns.
“Most likely it’s going to impact IRS processing the return and issuing out refunds,” Brewer said. “So if you can get ahead of that and avoid that nightmare, why not?”