Why You Should Start Working on Your Taxes in January -- Even Though They're Not Due Till April

It's all about minimizing your stress load and avoiding errors.

Although filing a tax return is something many of us have to do on an annual basis, it can be a stressful process. This especially applies if you own a small business, are self-employed, or have income coming in from a number of different sources, like a side hustle and brokerage account on top of your primary paycheck.

In 2023, the tax-filing deadline will be Tuesday, April 18. Usually, the filing deadline is April 15, but that falls on a Saturday next year. And when that happens, the IRS makes a point to push the deadline out to the next business day.

If you're wondering why the tax-filing deadline isn't Monday, April 17, the reason is that it's Emancipation Day, a Washington, D.C. holiday. And the IRS doesn't like to make taxes due on a holiday.

Because taxes aren't due until April, you may be inclined to hold off on working on them until, well, April. But actually, you're far better off starting to tackle your tax return in January. Here's why.

Starting early can make the process easier

Any time you're forced to rush through a task, you run the risk of making an error. The same holds true for filing taxes.

If you wait too long to start working on your tax return, you might make a mistake that causes you to end up with a lower tax refund. Or, your error might make you more likely to end up on the IRS's audit list (such as if you forget to report income that the IRS has been made aware of).

Plus, the sooner you start working on your taxes, the less stressed you'll be. And that alone is a good reason to give yourself extra time.

What's more, if you're working with a tax professional to get your return done, the sooner you sit down together, the sooner you can figure out if you're missing documentation needed to complete your return. And that could help you avoid issues later on in the filing season.

Finally, the sooner you complete your tax return, the sooner your tax refund can hit your bank account if you're entitled to one. And if you could use a lump sum of money to cover bills or perhaps pay off some holiday debt, then you might as well do what you can to get it as quickly as possible.

Most years, the IRS starts accepting tax returns at the end of January. So if you're able to get yours done early, you'll not only check a big task off of your list, but also, potentially get yourself an expedited payday.

It pays to get a jump start

January is when a lot of people start focusing on career-related goals and the recent New Year's resolutions they've set for themselves. While you're doing those things, take some time to start working on your tax return.

You don't necessarily have to pressure yourself to complete that return in January, especially if you're not particularly desperate for your refund. But getting the ball rolling could work to your advantage and spare you a lot of scrambling in the months ahead.