There are plenty of reasons why someone might miss a tax deadline: a family illness, death in the family, professional responsibilities, or poor record keeping. For many individuals, filing late is a perennial event.
Remember: the longer you wait to file your taxes, the more likely you are to make a costly mistake. And the failure to file a tax return on time can result in serious penalties. Even if you can’t afford to pay your taxes, you should contact the IRS to establish a payment plan.
To avoid the stress and complications of filing late, here are five tips to help you file your return with time to spare:
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1) Keep Your Papers in Good Order. Organizing your documents simplifies the tax preparation process. In fact, I encourage clients to create a tax file and prepare for tax season throughout the year. By maintaining a dedicated tax file with appropriate documents, you can save time and money.
2) Start Early. Typically, you can file tax returns for the previous year on or around January 31st. Those who file their taxes early receive their refunds before the rest of us. If you have a child starting college or currently enrolled in college, recent tax returns are required when submitting the Free Application for Federal Student Aid (FAFSA) and CSS/Financial Aid Profile. Starting early also reduces the likelihood of errors or omissions.
3) Be Prepared at Meetings with Your Tax Preparer. Arrive at your meeting at the predetermined time, and bring all relevant documents. Individuals who show up late to meetings, or fail to bring the appropriate papers, waste both their own time and the time of the tax professional.
4) Don’t Be Afraid to Ask Questions. When it comes to your taxes, there’s no such thing as a stupid question. Don’t be afraid to contact the IRS. Tax specialists can guide through the process and provide helpful advice on the best approach to take.
5) Plan Your Post Office Visit. Most post offices hold special hours on April 15, but not all of them. Check the hours of your local post office branch. If you’re submitting your taxes on the final day, prepare to wait in line for quite a while. Certified mail ensures that return reaches the proper destination.
These tips can make tax time less taxing for you. But if you still fear you might miss the tax deadline in the spring, you should file an extension ASAP. This will provide you with another six months to organize yourself without incurring any additional fees.
Marguerita M. Cheng is the Chief Executive Officer at Blue Ocean Global Wealth. Marguerita is a spokesperson for the AARP Financial Freedom Campaign and is often featured in national publications. As a CFP Board Ambassador, Marguerita helps educate the public, policy makers, and media about the benefits of competent, ethical financial planning. She proudly serves on the FPA National Board of Directors and is a frequent speaker on on financial planning, Social Security, diversity, elder care, and retirement.
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