Hertsel Shadian, Attorney at Law, LLC

Tips to Help Make Tax Filing Easier

22 March 2011

Tax preparation should not be so stressful. In fact, with proper organization and sufficient preparation time, tax filing can be managed very effectively. Following are some tips that hopefully will help to make your tax filing experience a little easier this year.

1. Don’t Procrastinate. Whether you use a professional tax preparer or prepare your returns yourself, resist the temptation to put off your taxes until the very last minute. If you prepare your own return, rushing to meet the filing deadline can cause you to overlook potential sources of tax savings and likely will increase your risk of making an error. If you use a professional tax preparer and wait until the last minute to give your return preparer all the documentation and information that your preparer needs, this might cause you to forget or overlook important and helpful information that your preparer will need to accurately prepare your return.

2. Use Free File.If you prepare your own return, consider using IRS Free File brand-name tax software or IRS online fillable forms. (Even if you use a professional tax return preparer, IRS Free File or fillable forms still might be a good way to preview your potential tax liability.) IRS Free File is available exclusively at the official IRS website at www.IRS.gov. Everyone should be able to find an option to prepare their tax return and e-file it for free. If you made $58,000 or less, you qualify for free tax software that is offered through a private-public partnership with various software manufacturers. If you made more than $58,000 or are comfortable preparing your own tax return, there also is Free File Fillable Forms, the electronic versions of IRS paper forms. For more information, visit www.IRS.gov/freefile to review your options.

3. Try IRS e-file. Available for the last 21 years, IRS e-file now is an easy, safe and fairly common way to file a tax return. According to the IRS, last year 70 percent of taxpayers—99 million people—used IRS e-file. Moreover, starting in 2011, many tax return preparers will be required to use e-file and therefore will explain your filing options to you. Based on IRS statistics, IRS e-file is approaching 1 billion returns processed securely each year. If you owe taxes, you also have payment options to file immediately and pay later (by the tax deadline). In addition, according to the IRS, e-file combined with direct deposit can get you your refund in as few as 10 days.

4. Don’t Panic if You Can’t Pay. If you cannot pay the full amount (or any amount) of the taxes you owe by the mid-April deadline, you still should file your return by the deadline if possible and pay as much as you can to avoid penalties and interest. (Filing on time also will get the clock started on any future statute of limitations for assessment of additional tax by the IRS.)  You can further discuss your payment options with your professional tax advisor or tax preparer.  You also can contact the IRS to discuss your payment options at 800-829-1040. The agency may be able to provide some relief such as an installment agreement. Note also that, according to the IRS, 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, click this link, Online Payment Agreement Application, or 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 mid-April tax deadline clock runs out, you can get an automatic six-month extension of time to file through October 17. However, this extension of time to file does not give you more time to pay any taxes due. If you have not paid at least 90 percent of the total tax due by the April deadline, you might also be subject to an Estimated Tax Penalty. To obtain an extension, just file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The easiest way to file a Form 4868 is through Free File at www.IRS.gov/freefile, or by contacting your professional tax advisor or tax preparer. Form 4868 also is available for downloading at the following link, Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, or from the IRS website at www.IRS.gov, or you can call 800-TAX-FORM (800-829-3676) and have a paper form mailed to you.

For more information about tax filing, contact your professional tax advisor or tax preparer, or visit the official IRS website at www.IRS.gov.  Please also feel free to forward this article to others you know that might benefit from this information.