I Asked ChatGPT Whether Filing Taxes Early Saves Money — Here’s What It Said
To file early or not to file early? That’s the question many taxpayers face when deciding on their tax strategy. They worry about being so early that they inadvertently miss key documents and information. But they’ve also heard that filing early can save money — and that seems like too good of an opportunity to pass up.
Is this the tax-time equivalent of an old wives’ tale? I don’t have an accountant on speed dial, so I turned to another resource: ChatGPT. I asked the AI whether filing taxes early saves money. The answer? Maybe — but not in the ways you might expect.
Avoids Late Penalties and Interest
Remember the saying that time equals money? Filing early can give you plenty of time to avoid costly penalties and interest associated with missed deadlines. If you’re prone to procrastinating, filing as soon as your documents are ready can help you avoid the IRS’ failure-to-file penalty, which is typically harsher than the failure-to-pay penalty. It can also buy you time to find an expert and develop a plan if you owe more than expected.
Explore More: 7 Ways You're Accidentally Committing Tax Fraud
Learn About: 16 Tax and IRS Scams and How To Spot Them
Gets Faster Refunds
The logic is simple: If you’re getting money back from Uncle Sam, filing earlier means you get that cash sooner.
“Not a savings on paper, but earlier money can mean less credit card interest or fewer short-term loans,” the AI said.
In other words, the tax bill itself wouldn't change, but getting your refund weeks earlier could reduce borrowing costs if you’re relying on that money to pay down debt or cover expenses.
Provides More Time To Fix Mistakes
Mistakes happen — even to the best of us. Even on our taxes. Filing early gives you some breathing room to correct errors or respond to IRS notices “without panic or penalties,” as the AI put it.
If you discover an issue, you can file an amended return and still have time to resolve it before the April deadline, potentially avoiding additional interest and penalties.
Reduces Identity Theft Risk
The idea of someone filing a fake return in your name sounds wild, like the plot of a "Law & Order" spinoff. But it happens. Filing early lowers the risk of someone submitting a fraudulent return using your information — a problem that can be pricey and time-consuming to fix.
Tax-related identity theft often involves scammers filing early to claim a fraudulent refund, so beating them to the punch can protect both your refund and your time.
Ensures Tax Help Is More Available
Tax experts get booked quickly in March and April, so if you want their full attention — or even a spot on a busy dance card — filing early helps.
Having more access to professional guidance could also help you catch deductions or credits you might otherwise overlook, indirectly affecting your bottom line.
When Filing Early Doesn’t Save You Money
The AI also warned that sometimes filing early simply won’t save you money. It shared a few situations where the early bird decidedly doesn’t get the worm.
No Automatic Tax Break
ChatGPT was blunt: “Your tax bill is the same whether you file in January or April.”
In other words, the timing of your filing does not, by itself, reduce what you owe. Your liability is based on your income, deductions and credits — not the calendar.
If Your Documents Aren’t Ready
“Filing early with missing or incorrect info can lead to amendments, delays or even penalties — costing more in the long run,” the AI said.
If You Owe and Don’t Pay Yet
Filing early alone won’t stop interest from accruing if you don’t pay by the deadline, though it can help you avoid the failure-to-file penalty.
The Bottom Line
Filing early won’t directly lower your tax bill. But it can save money by avoiding penalties, speeding up refunds and preventing costly mistakes. It's less about changing what you owe and more about improving cash flow and reducing risk. Not a bad deal.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
More From MoneyLion: