As we get closer and closer to tax deadlines, now’s the time to ensure your taxes are in order. Although filing your taxes might not be top of mind right now, we’ve looked into the top reasons why filing your taxes now can benefit you, your business, and others.
1) Faster access to your refund
This is the most obvious and beneficial reason to get your taxes filed. If you’re receiving a return, the faster it's filed, the sooner you’ll receive your refund—meaning more money in your pocket when you need it.
In the USA, the IRS estimates it should take less than 21 days to receive your refund if submitted electronically. For more information on filing your taxes with the IRS, read what to expect with your refund this year.
In Canada, the CRA is issuing refunds to online tax filings in as little as eight business days. For more information about filing your taxes with the CRA, read how you can get set up online.
2) Cash flow management
Filing your taxes earlier can help you manage your cash flow. By figuring out your tax liability for 2020, you’ll be able to calculate what the minimum amount of quarterly tax estimate payments are for 2021. It’s important to stay on top of your 2021 quarterly tax estimate obligation as it may be accumulating.
3) Discover issues and tax savings before the deadline
The earlier you prepare your taxes, the more time you’ll have to resolve any bookkeeping issues or find any missing receipts, records, and statements. Having this extra time can go a long way in reducing stress during what can be a very hectic time of year.
4) Avoid spending money that will need to be paid later
Having extra money set aside to pay income taxes between now and the deadline can lead to the illusion of “excess” cash. But don’t forget you’ll need to make your payment sooner than later, and paying now will spare you from not having those funds when you need them.
5) Return your focus to running your business
If you’re able to get your taxes filed sooner than later, take advantage while you can to save yourself stress at year end. Checking this task off your long to-do list will give you more time to run your business, which is more important than ever for entrepreneurs.
Let Wave and H&R Block handle tax filing for you
Now that your finances are separated, tax time will be much easier—but you can feel even more confident by importing your Wave accounting data to H&R Block (which is super easy, BTW, and available to all US-based customers). You’ll cut down hours of work, get personal advice from tax pros, and much more.
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.