If you have your 1099 and W2 tax forms already, should you file your income taxes early? Here are the pros and cons of filing now and later, courtesy of the investment website, Investopedia: On the plus side:
You'll get your refund earlier, and you can get interest on your money instead of letting Uncle Sam use it for free. Also, if you have bills to pay, you won’t have to max out your credit cards, miss payments, or get a payday loan to tide you over until mid-May, which is when you'd get your refund if you filed on April 15.
You’ll also get your taxes over with, and you won’t have to spend the next two months procrastinating, worrying about the approaching tax deadline, and wishing you had your refund.
Another reason to file your taxes early: You’ll avoid the possibility of being late and owing interest and penalties. After all, you might think you'll have plenty of time to prepare your tax return on April 14th and e-file it, but it might end up being more complicated than you expect. If you’re in a hurry, and filing at the last minute, it can be easy to mess up even the simplest return. Say, by forgetting to add your Social Security number, or making a math mistake, a mistake that could lead to a costly audit.
So what’s a good reason to wait to file your taxes?
First, if you owe money to the IRS, you won’t be giving it to them sooner than you have to. The smart move: Finish your return. Then put the amount you owe in an interest-bearing account until you file your return in April, and earn a few extra bucks for yourself.
One final reason to wait to file your taxes: You might have to file an amended return. Say if your employer or investment company made a mistake reporting your income, and had to correct it later.
Also, Congress can pass new tax laws any time before April 15th, and the law changes could affect 2009 taxes. If you already spent your refund and you owe more taxes, you could be in a tough spot.