Are you ready for the tax man?
For those lost in the throes of tax preparation, April 15 is D-Day. Time’s up; it’s over – send it in. Income tax time is a stressful time every year for many, but doesn’t necessarily have to be so, says Glenn Branum, a CPA with Jackson and Thornton in Greenville.
&uot;If you aren’t completely finished preparing your return, you can file for an extension,&uot; Branum said. &uot;The Internal Revenue Service (IRS) will grant you an automatic four-month extension – until August 15 – to file your income tax return. The extension is automatic for federal and state returns.&uot;
Branum said it is simple to file for an extension – just fill out the one-page form.
&uot;It doesn’t require any numbers or explanations,&uot; he said. &uot;Just your signature and your personal information.&uot;
Those requesting an extension should remember that it is an extension for time to file, not time to pay. Late penalties and interest are due for any amounts owed but not paid by the April 15 deadline.
The accountant said that you also could get another two-month extension after the August 15 deadline, but that extension requires proof of difficulty.
&uot;That extension is not automatic,&uot; Branum said. &uot;You will have to have an explanation and make a request for another extension of time to file.&uot;
Jackson and Thornton prepares approximately 250 individual and 150 corporate returns each year, Branum said.
&uot;We start receiving requests for returns in February each year,&uot; he said. &uot;We usually work nine-hour weekdays and half-days on Saturdays during that time, but are lucky that our firm is big enough that we do not to have to put in the outrageous hours that some CPAs do.&uot;
Branum said that the best tip he can give someone who plans to have a CPA prepare their income tax return is to organize their information as much as possible to cut down on the time it takes the preparer to work on the return.
&uot;Generally, if you have your information arranged in an orderly manner, have checks written down and listed for the preparer, and summarize the information as much as possible yourself, then it will take less time to prepare the return and will cost less,&uot; he said.
The CPA offers this tip for those who would like to have someone prepare an income tax return for them.
&uot;Be careful with anyone who prepares an income tax return by hand,&uot; Branum said. &uot;The tax laws are so complicated and certain information affects other parts of the return, so it’s easy to omit information that could affect your results if the preparer isn’t using a computer program to fill out the return.&uot;
The IRS offers these tips for individuals who choose to fill out their returns themselves:
Organize tax records – Tax preparation time is significantly reduced for taxpayers who use a system to organize their tax records and receipts.
Don’t wait – Try to resist putting off doing your return until the last minute. Rushing may cause you to make a mistake or overlook a potential deduction.
Visit the IRS online – Tax forms and instructions are available at the IRS website, www.irs.gov
Take advantage of free tax assistance – The IRS has recorded messages with information about 150 tax topics that may help you with any problems you encounter while preparing your return. Just call 800-829-4477. The department also staffs a tax help line, 800-829-1040, for individuals through April 12, 7 a.m. to 10 p.m. on weekdays, and 10 a.m. to 3 p.m. on weekends.
o Use IRS taxpayer assistance centers and volunteer programs – If you need some hands-on help, there are six IRS offices in Alabama – Birmingham, Dothan, Florence, Huntsville, Mobile and Montgomery. The IRS website provides addresses and phone numbers for these local offices, or you can call 800-829-1040.
Use electronic refund options – Having your refund deposited directly from the IRS to your bank account electronically reduces your wait time and the chances that your refund may be stolen.
File electronically – The IRS said approximately 827,000 Alabamians filed their returns via computer and the Internet in 2002. E-filing is the fastest and most accurate way to file your return. The IRS reports that the wait time for a refund filed via the Internet is half that of those filed via the postal service.
Always double-check your math and data entries for accuracy
– Income tax return filers should make sure their names, Social Security numbers and information listed on the tax forms are correct and legible. Mistakes can add significantly to the amount of time it takes to receive a refund.
o Don’t panic if immediate payment isn’t possible – The IRS has several options available for those who owe taxes. Installment plans, credit card payments or getting a reduced penalty rate are some of the options available.
File an extension of time to file – This option, as discussed above, allows a taxpayer more time to file without having to pay a penalty.