Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.

We’re now less than two months away from April 15th, the day the tax man gets his due. You may not even be thinking about your 1040 yet, but there are some very compelling benefits to filing early. Make your money work for you!

1. Luck favors the prepared. By not waiting until the last minute, you can spend a little extra time finding all the tax credits you’re eligible for. For example, you wouldn’t want to miss out on the Making Work Pay tax credit, which gives single filers an extra $400 and married couples filing jointly $800 (assuming they meet the income requirements).
2. Get your refund faster. This is the obvious one. If you’ve paid too much in taxes in 2009, get the IRS to cut you a check now before the agency is inundated in April and it may be weeks until you see your money.
3. Pay off bills sooner. It’s tempting to use that refund for something flashy and exciting — because hey, found money, right? — but if you put it toward high-interest credit-card balances or student loans, you’ll save yourself some money and get that much closer to living debt-free.
4. Avoid late fees. If you have the time now, it’s better to file your tax return early than risk filing late, especially if you owe (since you’ll have to pay interest on top of penalties).
5. Bring home a bigger paycheck. Now is a good time to review your withholdings. If you’re getting a whopper of a refund back for 2009, consider increasing your federal withholdings — you’ll get a smaller refund next year in return for a bigger paycheck now. After all, why knowingly give the government an interest-free loan?

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