Seven Smart Tips for Last-minute Filers

In the wake of the fiscal cliff negotiations, the Internal Revenue Service delayed the start of tax filing season until January 30 of this year. Some taxpayers faced further delays in filing, however, including those who claimed residential energy credits or whose returns involved property depreciation or general business credits.
With or without delays, there are always those who end up filing their taxes at the last minute. The California Society of CPAs (CalCPA.org) offers these tips for people who are scrambling to get their returns in by the April deadline.

Don’t Panic

Even if you’ve been putting off filing your return, you can still 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.

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 double check your figures and confirm that your Social Security number and other data on your return are correct.

Go Electronic

Instead of standing in long lines at the post office, taxpayers can take advantage of the opportunity to file their returns electronically. According to the IRS, nearly 100 million taxpayers used the e-file option last year. You can use the IRS Free File system or ask your CPA to prepare and file your return electronically for you.

Talk to an Expert

Speaking of your CPA, 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. Your CPA can quickly tell you what paperwork you need and make sense of your tax situation, taking this burden off your shoulders.

Get It Done

Keep in mind 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 definitely worth it.

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 must still 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 the late payment penalty, however, 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 U.S.

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 local 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, be sure to turn to your local CPA. He or she can help you address all your critical financial concerns.

The Money Management columns are a joint effort of the AICPA and the California Society of CPAs as part of the profession’s nationwide 360 Degrees of Financial Literacy program.