5 Tips to Avoid Tax Time Stress

Are you looking for ways to avoid the last-minute rush for doing your taxes? Here are some stress-relieving tips to help you. 

1. Don’t Procrastinate – Resist the temptation to put off your taxes until the very last minute. Your haste to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error.
   
   
2. Visit the IRS Online – In 2008, there were more than 330 million visits to IRS.gov. Anyone with Internet access can find tax law information and answers to frequently asked tax questions.
   
   
3. File Your Return Electronically – Nearly 90 million taxpayers filed their returns electronically in 2008. Aside from ease of filing, IRS e-file is the fastest and most accurate way to file a tax return. If you’re due a refund, the waiting time for e-filers is half that of paper filers.
   
   
4. Don’t Panic if You Can’t Pay – If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. You also should contact the IRS to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise. More than 75 percent of taxpayers eligible for an Installment Agreement can apply using the Web-based Online Payment Agreement application available on IRS.gov.  To find out more about this simple and convenient process type “Online Payment Agreement” in the search box on the IRS.gov homepage.
   
   
5. Request an Extension of Time to File – But Pay on Time If the clock runs out, you can get an automatic six month extension of time to file to October 15. However, this extension of time to file does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date. See IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return for a variety of easy ways to apply for an extension. Form 4868 is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).  Taxpayers needing Form 4868 should act soon to be sure they have the item in time to meet the April deadline.

Other Tax Savings Notes

• According to the IRS the error rate is significantly reduced from 20 percent with paper returns to about 1 percent with e-filed returns.  Our services include FREE electronic filing when we prepare your income taxes.
• According to the IRS, the average time required to complete and file a Form 1040 is 26 hours. Let us help you save time (and money) by having a professional prepare your tax return.  Our goal is to avoid you a tax time stress. 
• Make sure you are taking all the deductions you are allowed, including education and moving expenses. Talk to us about your unique situation to help reduce your tax liability. Other deductable items that you should keep track of include: child care expenses, alimony payments, non-reimbursed business expenses (such as union dues and subscriptions), and your safe deposit box fee.
• Some tips for helping to keep track of your income tax deductions:
  • Keep a seperate folder or envelope for tax deductible receipts, and drop items in it throughout the year.
  • In your checkbook, mark checks with a code for deductible items, such as MD for medical, CH for charitiable, TU for tuition, etc. 
• Review your income taxes withheld on your year-to-date pay stub. If you made any major tax-related changes  this year- such as maritial status, mortgage, dependents or capital gain/loss -  you may want to change your withholding deductions for the rest of of the year.
• When you're getting ready for winter and putting your warm weather clothes away  - consider bundling up those items you never wore and donating them to a charity. Keep the receipt, and you can take that as a deduction on your taxes.
• Will you be susceptible to the AMT (alternative minimum tax) this year?  Contact us for a free evaluation to review your situation and discuss about your tax planning options.
• Need information on running a small business? Visit this new web site www.business.gov. This website is operated by the Small Business Administration and provides great inside guides and tools on starting and manageing a new business, government contracting, taxes, as many other helpful topics, including what types of permits and licenses are needed for your location and type of business.

 Frequent Taxpayer Questions

• What records should you keep for at least 3 years?  Any and all documents that have an impact on your tax return, including: W2, 1099's, 1098, bills, credit card and other receipts, invoices, mileage logs, canceled checks, any other records to support deductions or credits you claim on your return.
• How long should you keep your tax records? Normal tax records should be kept for three years, but some documents - such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property - should be kept longer.
• Do I qualify for a home office deduction? Yes if your home office is the principal place of business. The IRS also considers the nature and extent of activities, and time spent at other locations. 
• For more frequently ast questions please visit the FAQ tab in our website for more tax related information.