Early Tax Filing Offers Big Benefits For Americans

Tax season is upon us again, and for most Americans, the annual ritual of filing federal taxes by April 15 is already underway. According to a recent survey conducted by MoneyLion.com using PureSpectrum’s platform, a striking 74% of Americans plan to file their taxes early in 2026. Yet, there remains a sizable contingent of procrastinators: 14% intend to file during the week of Tax Day, 7% will wait until the very last day, and 6% are already planning to request an extension.

While the temptation to put off paperwork until the deadline looms large, experts warn that waiting until the last minute may not be the best strategy. "If you wait until the last minute, you're risking that something will come up that will put you in a bind to make the deadline, like an unexpected illness or a project at work that demands your time," Stephen Henley, CPA and senior managing director at CBIZ MHM, told MoneyLion.com. "This just amplifies your stress level."

Henley’s point resonates with many who’ve found themselves scrambling as Tax Day approaches. Life, after all, is unpredictable—illness, work emergencies, or even just a misplaced document can throw a wrench in the best-laid plans. And the stakes are high: missing the filing deadline triggers a “failure to file” penalty of 5% of unpaid taxes for each month the return is late, maxing out at 25%. But that’s not all. If you still haven’t paid your taxes after filing late, you’ll face an additional “failure to pay” penalty, compounding the financial pain.

There’s another reason to get a jump on taxes: your accountant’s attention span. Tatiana Tsoir, CPA and founder of Linza Advisors, explained to MoneyLion.com, "If you start early, you get accountants before they become tired. The truth is that we are all people and can make mistakes. If you come to us early, you may get the accountant to pay a little more attention to your business and what can be done better next year." During the rush, even the best professionals can miss things, so early filers may benefit from a sharper eye and more thoughtful advice.

Accuracy, of course, is crucial. Filing in haste increases the risk of errors, which can have costly consequences. Mark Jaeger, VP of tax operations at TaxAct, warned, "If a mistake is made on your return when you file, that oversite could result in an audit or an unexpected, large tax bill. Mistakes can happen, but it's important to be as careful as possible." Filing early provides the breathing room to double-check every deduction, credit, and number, ensuring nothing is overlooked and all possible savings are captured.

But the benefits of early filing go beyond just avoiding mistakes and penalties. In an era where identity theft is a growing concern, submitting your tax return promptly can serve as a powerful shield against fraud. Tax scammers often try to file false returns using stolen identities to claim refunds. However, if you’ve already filed, you close that window of opportunity for criminals. The longer you wait, the longer you leave yourself exposed.

There’s also a financial incentive for those expecting a refund. "A refund is simply money you earned throughout the previous year and, unfortunately, the IRS held onto it interest-free," Jaeger explained to MoneyLion.com. "Getting that money back as quickly as possible will give you more opportunity to invest it in a retirement or investment account and make that money work for your financial benefit." In other words, the sooner you receive your refund, the sooner you can put it to work—whether that means investing, saving, or paying down debt. Every day counts when it comes to earning interest or returns.

Despite these compelling reasons to file early, a significant portion of the population remains anxious about the process, especially the prospect of an IRS audit. According to a recent poll referenced by Yahoo Finance, about a quarter of American taxpayers are concerned about being audited in 2026. Financial expert Emily Shacklett offered some practical advice to help taxpayers avoid common pitfalls that could increase their audit risk.

First on Shacklett’s list is the importance of signing up for a free ID.me account. This tool allows taxpayers to access prior year’s tax returns and track income forms submitted to the IRS by employers. "That's really important, because I see a lot of 'matching' errors trigger audits, which is what happens when the IRS notices that there are fewer income forms filed on a return than it received," Shacklett explained. Essentially, if the IRS’s records show more income than you reported, red flags go up—sometimes leading to an audit.

Next, Shacklett cautioned those filing Schedule C for business income to be especially diligent. Overstating expenses or deductions in this area is a common audit trigger, as it’s often subjective and requires careful documentation. "Don’t overstate your expenses as it could trigger an audit, and the IRS will likely ask for documentation to prove questionable numbers," she advised. Keeping thorough records and being honest about business costs is the best way to avoid unwanted scrutiny.

The third area of concern in 2026 is digital currency and cryptocurrency transactions. "Every tax season, the IRS focuses on certain areas of tax returns. This year, one of the areas is digital currency and crypto transactions," Shacklett noted. With the complexity of these transactions, mistakes are easy to make, and the IRS is paying close attention. Shacklett recommends that anyone who has engaged in crypto trading keep meticulous records and consider working with a professional to ensure accurate reporting.

Taxpayers are wise to heed these warnings. The survey conducted by MoneyLion.com between January 23 and January 26, 2024, polled 1,005 Americans across a range of questions—from confidence in deductions to audit history and refund expectations. The results paint a picture of a nation that’s diligent, but still wary of the pitfalls that come with tax season.

For those still tempted to procrastinate, it’s worth remembering that the cost of waiting can be more than just financial. The stress of a looming deadline, the risk of errors, the possibility of missing out on deductions, and the threat of identity theft all add up. Filing early isn’t just a matter of compliance—it’s a way to protect your peace of mind and your wallet.

As April 15 approaches, Americans have a choice: join the majority who file early and reap the benefits, or roll the dice and risk the headaches that come with last-minute scrambling. With expert advice and a little advance planning, tax season doesn’t have to be a source of dread. In fact, it could be an opportunity to take control of your finances and start the year off on a stronger footing.