Tax Time

Friday, March 15, 2019

Tax time is here and you have only about a month’s time left to do taxes. A lot of software is available for you to do taxes and you should have no reason to be left clueless during the due date month of April if you live in the United States. Most people can get access to a public computer terminal or have internet access on their tablet or phone or on a personal computer. They can file an extension to grant them additional time to get paperwork together for filing purposes also.

There are also places that will often do taxes for free in the community if you are new to taxes and have never filed before.

Here are ideas and tips to get better tax return accuracy. Often people have mathematical errors that can easily be avoided if they simply use a computer program that will add up the numbers and tabulate and simplify calculations. Humans get distracted often and sometimes overlook things and so computers can follow a series of complex steps to give you the correct answer, however there’s the old adage of Garbage In, Garbage Out so ultimately you have to know what you’re doing and sometimes even check what goes on your return and the final sheets.

Most jobs are supposed to give you your income documents to do your taxes by April and have to mail or provide the W-2 documents to you by January of the year following when the year when you made the income. And often some of your investment information also may not get to you by February or early March so make sure to get all your records before you even attempt to do anything. We know often there is the temptation to get your taxes done and get it out of the way so you don’t forget and get back as much money as possible, but it’s a headache when something goes wrong and you have to correct the mistake. And it takes longer to process account fixes than the original. Don’t use your pay stubs to do your taxes because more often than not you will grab the wrong pay stub that will give you wrong number. Keep the pay stubs for your records but you should be using W-2’s for your income as an employee.

If you are self-employed, a contractor, or independent freelancing individual you may or may not have known that you should be have been allocating or setting aside some money from your pay in anticipation of tax filing. Obviously, you have made money and the gov wants its cut and share so you need to estimate how much you will make for the whole year so you can properly pay this bill. You should treat this like a regular occurrence for your business and make sure you take care of this type of expense first otherwise you could end up hurting your business. Most times these payments are to be made quarterly. Check with a tax consultant or advisor if you have to.

Most places are supposed to give you copies to review of your return also. Make sure you review because once you sign the paperwork you own up to everything that’s on there. Finding someone ultimately with good ethics that’s trustworthy and competent is the most important thing. After all if you were hiring someone to work on your roof you’d want someone that wouldn’t cheat you and do a shoddy job, so why would you expect any less from someone working in your finances?

There are a lot of forms that are publicly available. You can get it straight from the main tax department’s website usually or you can order them or you can go to the library or post office in many cases.

In fact there are even local free offices that will provide free tax help. Check out the website for a listing of places in the community.

It usually doesn’t take too long if you only have one or two jobs or documents. But for some that have a lot of receipts, expenses, and multiple jobs, it can take several hours.

Don’t forget that often there is a state return. The good thing is that some software online will do free federal taxes and free state filings in the same session. And also if you worked in multiple states it will see if you have to do reciprocal filings.

Sometimes some local cities and villages will also require you to file so make sure you check that also. Sometimes it’s as simple as submitting a form or two.

Consider hiring someone to do this if it gets too complicated. Often if you have complex questions that are answered check the software for answers, or consult publications. Examples are stocks and basis and property or sale of home. This can get complex but do note that if you’ve done your own research often you will be able to find the answers easily. There’s another saying that no one cares about your situation and your life than you ever will so you need to be responsible for your life and what goes on your forms.

Another thing that is useful is around tax time it’s a good idea to organize and check over previous year’s records in your tax folder, filing cabinet, or file box. You DO have a place to keep tax records, don’t you? Good, hopefully you do and you can refer back to it and see if you’ve made any mistakes in previous years or learned something that may affect later years including carryovers or money that didn’t get properly applied among other scenarios.

It’s a good idea to keep records for at least 3 years. Sometimes you may even want to keep records between 6 to 10 years because of how long it takes for accuracy and examinations to get to check on you.

Before you send in your documents check everything once more, and then consider shipping with a cover letter and paying for certified mailing with return receipt to track your document and get proof of mailing if you decide to go the pony express route so to speak.

Finally it can take between 3 weeks for electronic returns to process and up to 6 weeks if mailed. But we’ve seen refunds come back in as little as 9 to 10 days. The hardest part may just be waiting although it is getting faster and faster.

Also if you do direct deposit make sure you have your name on the account and also if expecting a mailed check then make sure you have the right address. It goes without saying but simple mistakes can be caught and fixed before you get penalties if you simply take some time to get it right.

Lastly, if the case that you do owe, try to pay as much as you can so you don’t incur additional penalties and interest, but make sure to still get the return in on time otherwise you could get hit with a penalty for not turning in your return on time. And don’t wait till the last minute when everyone’s trying to send in their return as the system can end up overloaded and delay your successful submission.

After you are done check and see if there’s anything you can do in preparation for next year. Taxes don’t have to be hard and you can take simple steps to ensure a successful filing season. Take the time and effort to look at things early, prepare your documents, and have the foresight to have enough withheld from pay to allocate toward taxes. You will thank yourself later if you don’t have to pay all of it at a single time. And this single period of time might be when you’re financial at a hard place. Be smart and prepare!

Have a good tax filing year.

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Author: savvywealthmedia

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