Firstly, you ll get your refund sooner. Secondly, filing close to the tax-season start date shortens the window of opportunity for an identity thief to file a fake return in your name.
Lastly, it s looking like the next round of stimulus checks while not official yet will allow 2020 income to be used for eligibility. If you lost your job or took a pay cut last year, it s a good idea to report the lower income ASAP to the IRS in the event you qualify for more aid.
Your tax situation may look different this year because of pandemic-related financial relief. Here are six things to know:
Name beneficiaries. After years of thinking I d named a beneficiary on my 401(k), I recently checked my online account to find it blank. Take a few minutes to ensure all your retirement or investment accounts have the right beneficiary listed (note that you ll need your beneficiary s Social Security number to make it official). This isn t fun to think about, but it s a small task that, if ignored, can cause more than a headache for your heirs.
Revisit auto-save (or set it up!). Automatic savings is a smart strategy because it doesn t require any ongoing effort. But don t forget to revisit the amount you re saving, especially if your income has gone up or your goals have changed.