Many self-employed people prefer to wait until the last minute to do their taxes. The reason that self-employed workers wait late to do their taxes is because they typically owe money and do not get a check back. However, there are several reasons that you should get a jump on your taxes if you are a self-employed worker.
Protection from Identity Theft
The Internal Revenue Service has stated that people should file their taxes as soon as possible in order to reduce the chances of becoming a victim of identity theft. Identity theft is on the decline, but it is still a risk. If you file your taxes early, then cyber thieves will have a harder time getting your personal information.
Extra Time to Pay Your Taxes
The self-employment tax rate is currently 15.3 percent. It is 12.4 percent for Social Security, and 2.9 percent for Medicare. There are also income taxes due. You will have more time to pay your taxes if you file early. For example, you file your taxes in January. You will have until April to pay them off. This means that you will have three months to pay off your taxes.
Avoid an Extension
If you have not filed your taxes by April 15, then you will have to request an extension. You will have until October 15 to file your taxes if you request an extension. You will likely need the help of local tax preparers in your area. The tax preparers can help you put together the financial documents that you need to prepare your taxes.
It is also important to note that if you owe money, then interests and fees will be added to the unpaid balance. You could end up paying a lot more than what you owe. You will be able to avoid this situation if you file your taxes early.
Time to Research Your Payment Options
Many people are shocked to find out how much money they owe after they file their taxes. However, the good news is that you do not have to pay the full balance at once. The Internal Revenue Service has a variety of options that will make it easier for you to pay your taxes. You will have more time to explore your options and choose the one that is best for you if you file early.
The Internal Revenue Service will look at your form carefully to make sure that everything is done the correct way. If they see an error, then they will notify you. The errors will have to be corrected before your tax return is accepted. You will have more time to correct errors if you file early.
Many errors occur as the result of rushing. If you file early, then you will be less likely to rush.
There is no need to wait to the last minute to do your taxes if you are self-employed. You will be less likely to be a victim of identity theft if you do your taxes early. You will also be able to have more time to pay and avoid having to get an extension. Additionally, you will be able to rest assured that your forms are filled out accurately and research your payment options.