It is that season again. It rolls around with the purchase of a new calendar. And what happens is truly amazing. The joyful, gift-giving holidays are eclipsed by the cold, hard steeliness of the tax season. No more Christmas turkey, no jingles, no children with their smiling faces, just the extended hand and the icy stare of The Taxman who wants to know how much you owe him and how you are going to (immediately) pay.
In other words, federal individual tax returns and many state returns too are due by April 17.
Now is the time to prepare your returns. It is not too early. Common sense dictates that starting now prevents errors and ensures that you have all necessary documents, especially last year’s returns. Do not delay in either locating your paperwork or in the actual preparation of the returns. Ample time ensures that you will have the opportunity to check for correct math calculations and for correct social security numbers (two frequent errors which delay IRS processing). Most importantly, it is the timely prepared return not the rushed return that ensures that you have taken all the adjustments, deductions, and credits to which you are entitled.
As you gather your paperwork to prepare your returns, keep these tips in mind.
• Consider if you have the time necessary to file complete and accurate returns. If not, then have your returns professionally prepared. Many paid professional preparers are available including CPAs (certified public accountants), enrolled agents, tax attorneys, and RTRPs (registered tax return preparers). Tax preparation companies such as H&R Block, Jackson Hewitt, and Liberty are available as well.
• If you do elect to prepare your returns yourself (presumingly to save money on the preparation fee), at least have your returns reviewed by a paid professional. Some professional tax preparers like H&R Block provide a review or a second look service at a reduced rate or for free.
• Don’t use pen and paper to prepare your returns or file your returns by mail. Doing so only ensures delays in processing and in the closure of your returns. Remember, the IRS and state taxing authorities generally have three years from the acceptance date (usually, the date of filing) to audit your returns. Delays in processing caused by illegible pen and paper returns or by lost mail returns only increase this time. The IRS website provides the options of both online fillable forms and the free use of tax software offered through a private-public partnership with manufacturers. The latter option is only available, however, to taxpayers whose AGI (adjusted gross income) is $57,000 or less. For more information, go to the IRS website at http://www.irs.gov/freefile.
• Always use recognized, reputable, professional-quality tax preparation software. Turbo Tax® by Intuit, Inc. and H&R Block at Home® are two of the best and are both user-friendly. Be wary of online websites claiming to charge little or no fees. Not only may such sites have hidden charges for electronic filing, their online software may (and often does) choke on more complex returns. Whether your personal information will remain private and secure is also a concern. Finally, all websites — including tax preparation sites — are fluid. They come and they go. There is no guarantee that the website that prepared your returns in early January will be up and running after April. And, such sites provide little, if any, audit assistance and no representation when the IRS or the state taxing authority questions the validity of the entries on your returns.
Lynn Jenkins, Esq. is a practicing attorney, a UNH graduate student, and is enrolled in the University’s Masters of Taxation program. She is an IRS Registered Tax Return Preparer and a Master Tax Advisor at H&R Block in Orange. She would be happy to review your tax returns for the present and prior years. She can be reached at (203) 799-2966.
