Why Early Tax Filing Matters for Social Security Recipients:

Social Security
  1. Avoid IRS Penalties & Interest:
    If you owe taxes on Social Security or other income (like dividends or retirement withdrawals), you must make quarterly payments. Missing these deadlines can lead to penalties and interest, cutting into your retirement income.
  2. Improve Budgeting & Reduce Stress:
    Early tax filing eliminates surprise tax bills, helping retirees on fixed incomes plan more effectively and avoid last-minute financial strain.
  3. Protect Your Social Security Payments:
    Ignoring tax bills can result in garnishment of up to 15% of your Social Security through the Federal Payment Levy Program. Paying early helps prevent this.
  4. More Time to Fix Issues:
    Social Security complicates tax returns, especially if you have other income. Starting early gives you time to address errors or missing forms like 1099-Rs, reducing the risk of delays or amended returns.
  5. Withholding Option:
    You can file IRS Form W-4V to have taxes withheld from Social Security payments, helping you stay current year-round and potentially reducing what you owe at tax time.
  6. Faster Refunds:
    If you’re owed a refund, filing early ensures you get it sooner — freeing up money for essentials or enjoyment.

Check out the original article by Choncé Maddox here.