Monday, January 25, 2016
DON’T BE IN SUCH A HURRY – BUT DON’T WAIT UNTIL THE LAST MINUTE
Some more good advice from WON’T YOU TAKE THIS ADVICE I HAND YOU LIKE A BROTHER.
You should not rush to be among the first taxpayers of the year to have your taxes done. Do not give or send your tax preparer your ‘stuff’, or attempt to prepare your own returns, until you have received all the forms and information needed to complete the returns! That means every W-2, every 1099, and every K-1 and all the cost basis information on the sale of investments.
I have had many experiences where a client came in very early in the season and had his/her return prepared, only to receive another Form 1099 in the mail the day after he/she had sent the finished returns off to his/her “uncles”.
But, on the other hand, don’t wait until the last minute to prepare your returns or have your returns prepared.
Many taxpayers who expect to owe their “uncles” wait until the very last minute to get their “stuff” together to prepare their return. Even if you think you will owe taxes you should have the return prepared early, once you have all the necessary information in hand.
You don’t have to actually file the returns and pay the tax until April 15th. But by having your 1040 prepared early you will know exactly how much you will owe and have over a month to come up with the money, instead of running around trying to juggle funds days before the deadline. Hey, you might even be surprised to find that you will be getting a refund!
Also consider the workload of your tax preparer. I have a strict long-standing rule that all returns that are not literally in my hands, with all the necessary information, by March 19th will be automatically extended!
Another good reason not to wait - the IRS is advising taxpayers to file early this year in an attempt to avoid identity theft by crooks who may file a return under your name claiming a refund. The reason for filing early is to ensure you are the first person to file under your name.
While this is good advice, it does not change my above advice to wait until you have received all the forms and information needed to complete your returns.