Because of the end-of-the-year “fiscal cliff” negotiations, the IRS delayed the start of tax filing season until Jan. 30 this year. Some taxpayers faced further delays in filing, including those who claimed residential energy credits or whose returns involved property depreciation or general business credits.
With or without delays, there always are those who end up filing their taxes at the last minute. Here are tips for people who scramble to get their returns in by the April deadline.
1. Don't panic
Even if you've been putting off filing your return, you still can get it in on time. Take that important first step: Locate all the documents you need and organize your paperwork. Sometimes that can be the hardest part.
2. Check your facts
It's much more stressful to get your return done in a hurry, and errors may creep in if you're rushing. Take extra care to doublecheck your figures and confirm that your Social Security number and other data on your return are correct.
3. Go electronic
Instead of standing in long lines at the post office, take advantage of the ability to file your returns electronically. Nearly 100 million taxpayers used the e-file option last year, according to the IRS. You can use the IRS Free File system or ask your CPA to prepare and file your return electronically for you.
4. Talk to an expert
Speaking of CPAs, if you are running behind and don't usually use a tax preparer, this may be the year to put a CPA's expertise to work for you. A CPA can tell you quickly what paperwork you need and make sense of your tax situation, taking this burden off your shoulders.
5. Get it done
Know that if your return is late and you owe taxes, you could face interest and penalties that can really add up. If you don't file a return at all, the IRS can assess tax based on the information it has — which may not include exemptions or deductions you deserve — and begin a collection process. Even if it will take a lot of effort to get your return done on time, it's worth it.
6. Consider an extension
If you can't file your return on time, you may be eligible for a six-month extension of the due date, but keep in mind that you still must properly estimate the amount you will owe and pay that amount by the regular deadline. If you don't, you may be subject to interest and penalties. It may be possible to avoid a late payment penalty if you can show reasonable cause for missing the deadline. An automatic two-month extension to file a return and pay taxes is available to taxpayers who are out of the country on the normal due date because they reside overseas or they are on military duty outside the United States.
7. File even if you can't pay
If you've been putting off filing because you don't have the money you owe, don't fail to send in your return. The IRS offers payment plans to eligible taxpayers who can't pay their taxes all at once. If you're not financially able to pay your tax debt immediately, you may qualify for an installment agreement that allows you to make payments over time. Your CPA can help determine if you qualify for IRS payment plans and help you apply for one.
Your CPA can help
Whether you're racing to finish your return or facing questions about other aspects of your financial life, a CPA can help you address all your critical financial concerns. To find a CPA in Pennsylvania by location or area of expertise, visit www.Ineed aCPA.org.
For more information about Pennsylvania Institute of Certified Public Accountants (PICPA), visit www.ineedacpa.org.