Do it now is good advice. The Internal Revenue Service issued IR-2017-185 on Nov. 7, 2017. The message was loud and clear and was meant to initiate a response. The IRS advised taxpayers about steps they can take now to ensure smooth processing of their 2017 tax return and avoid a delay in getting their refund next year. This advice should not be taken lightly. There is a natural resistance to activities that are repulsive or difficult. Chalk it up to being human. We do not like conflict and we respond with a natural procrastination. Knowing that, the Service promises more reminders will follow. So this article will be followed by a series of reminders to encourage you get ready for the upcoming tax filing season. I would like to emphasize that the sooner you attack an unlikable problem, the sooner you will be relieved of the dread that is the natural response to a distasteful undertaking. There is also a special page on the IRS website with steps to take now for the 2018 tax filing season. See www.irs.gov.
As I have previously suggested, gathering documents should be an annual project, beginning in January. When the monthly bills are paid, file them in alphabetical order or if you prefer, by class—utilities, insurance, mortgage, etc. The IRS
The IRS urges all taxpayers to file a complete and accurate tax return by making sure they have all the documents before they file their return, including their 2016 tax return. Use the previous year’s tax return to remind you to compile the information for the current filing. Begin with the obvious; this includes Forms W-2 from employers, Forms 1099 from banks and other payers, and Forms 1095-A from the Marketplace for those claiming the Premium Tax Credit. This will help avoid refund delays and the need to file an amended return later. Confirm that each employer, bank or other payer has a current mailing address. The forms usually arrive in January. Take time to examine the forms and, if necessary, inform the sender of any necessary changes.
Use Direct Deposit and Electronic Payment.
Electronically filing a tax return is the most accurate way to prepare and file. Errors delay refunds and the easiest way to avoid them is to e-file. Nearly 90 percent of all returns are electronically filed. Combining direct deposit with electronic filing is the fastest way for a taxpayer to get a refund. With direct deposit, a refund goes directly into a taxpayer’s bank account. There’s no reason to worry about a lost, stolen or undeliverable refund check. Our firm is dedicated to serving the needs of taxpayers and we strongly suggest the use of electronic filing and direct deposit. Even if you owe taxes to be sent with your tax return, electronic withdrawal from your bank facilitates the payment without the possibility of delay in payment and it is more secure than mailing a check. Eighty percent of federal tax refunds are direct deposited and a large number of returns indicating taxes due are also paid by electronic transfer.
Since the tax filing season is hectic by nature, we are always interested in methods to reduce the possibility of errors and delays in filing. If you plan, starting now, to get on with the task, you will reap the benefits of peace of mind and you will not race to get the taxes filed by the deadline. Oh, yes, there is always the relief valve—filing an extension of time to file. However, if you owe taxes to be paid when the return is filed, the delayed filing will be subject to interest charges for failure to pay. If you make the effort to estimate the amount of tax that may be payable, why not just complete the task and remove the angst and worry of failing to file the return for whatever may be the reason? Procrastination is a human malady which if allowed to, will cause deferment of tasks that will just cause more worry. Yes, we are continuing to file 2016 taxes for some clients in November. Do not let this happen in your life. As one old procrastinator to another, I suggest that we make every effort to “Do it now!”
For more information, call Wilson & Wilson, CPA, at 615-673-1330 or email firstname.lastname@example.org