Tips for last-minute tax filers to beat the stress as deadline draws near
"It is stressful for the people waiting until the last minute," said Wendy Smith, owner of Carefree Tax Service, 1520 Creston Park Drive. "But I know it's going to be that way, so I'm prepared for it."
Smith has been preparing taxes for eight years and has owned her business for six. She said a solid 15 percent of her clients file their taxes late, including those who file for extensions.
"When there's a deadline, there's always the procrastinators,'' she said.
If you happen to be one of them, Smith offers these tips:
1. You can file an extension. Taxpayers who can't or aren't ready to file by April 17, can file for a six-month extension. This requires filling out Form 4868, which can be done by a tax preparer or by printing the form off the Internal Revenue Source's website, irs.gov.
2. Understand the extension to file is not an extension to pay. This is one thing many people get confused about. If you have not filed and think you're going to owe, estimate that cost and pay 90 percent by the April 17 deadline to avoid penalties. If you overpay, you'll get the refund back on your tax return when you file. If you underpay there is a possibility of penalties, with interest.
3. Submit a partial payment by April 17 if you owe money to the government. If you owe money but can't pay the full amount, paying at least a portion helps reduce the amount of penalties that would be assessed. This also makes the IRS aware that you're making a good faith effort, which reduces the risk of an audit.
4. Be proactive. If you haven't filed in past years and feel bad, guilty or scared, don't sweep your situation under the rug. The problem is not going to go away, so take control and get caught up by filing those taxes.
5. If you owe, you can still file early. People think that if they file in February, that's when they pay—so they wait until the last-minute to file. That's not true. Taxpayers can file early, but they don't have to pay until the tax day deadline.
6. Ask about payment installments. If you owe money to the government, the IRS has started reducing some penalties and is making it easier for people to get installment plans.
7. Consider organizing throughout the year next time. At the beginning of the year, create a file or folder for tax papers so the information is organized at the end of the year. Don't wait until March 28 to start gathering information or find all your tax papers.
Last updated: 8:14 pm Thursday, December 13, 2012