Published March 12, 2014
If you haven’t started the process of filing your taxes yet, here’s some good news: experts say it’s not time to panic -- yet.
“At this point, it’s not crisis time since some brokerage firms are still sending out forms. Paperwork is still dribbling out,” says Cynthia Jeanguenat, enrolled agent and owner of Horizons Unlimited Tax & Business Services.
But come April 1, if you need to hire a professional to help file your return, you may be out of luck.
“If you call after that date, chances are places are going to be booked," she says. "That’s when we start calling each other asking who can take a new client, and most of the time no one has any more room to take on new clients.”
Filing tax returns is rarely fun, but you can’t escape it. Experts offer the following tips to get the tax-planning ball rolling:
Get Organized. Taking the time to get organized before filling out your tax return will help make the process more efficient and lessen the chances you will leave any money on the table.
“Any time you get something that might impact your taxes, put it in a folder labeled with that year’s tax date,” recommends Andrew Rose, certified public accountant in the tax department of Rehmann. He suggests putting anything income related in one pile and documents related to deductions and credits in another.
“When you can see everything in front of you, it will help make sure you don’t overlook any deductions or credits you are eligible for,” he said.
Review Your Forms. Don’t wait until you sit down to file to open envelopes containing tax forms from employers or financial institutions. “If you find a mistake on one of these forms, it can take a couple of weeks to get it fixed, especially if it’s at a larger company,” says Jeanguenat. “If you find a mistake and the deadline is right around the corner, you might get stuck.”
Take a look in the Rear-View Mirror. Rose suggests reviewing your major life events of 2013 to see what deductions and credits you might be eligible to claim. “Did you buy a house, move for a job, or search for a new job? All those events impact your taxes and taking the time before the pressure is on helps,” he said.
Estimate if You’re Going to Owe Uncle Sam. “Don’t be surprised if you owe more in taxes than in the past,” says Rose. “A lot of things kicked in last year that weren’t around in 2012; there was a big tax legislation that came into play in January 2013.”
Determining if you are going to have a balance due as early as possible allows you to budget accordingly, adds Jeanguenat.
“Even if you can’t pay the entire amount, still file your taxes. If you don’t, you’ll face a penalty for failure to file and failure to pay.”
Make Your Contributions. If you take the deduction for traditional IRA contributions, don’t forget to put the money into the account by April 15. “You’d be surprised how many people just forget to do this. They think, ‘oh my taxes are done.’ It’s out of sight, out of mind -- but you need to make the contribution,” says Jeanguenat.