The April 15 deadline for filing your taxes is not yet breathing down your neck, but you can see – or feel – it from here. There's still time to avoid the procrastinator's panic of the last minute if you get busy now. But if you're dawdling, you're in good company. TurboTax's website notes that 20 to 25 percent of us wait until the last two weeks to prepare our returns.
According to the IRS, over 70 percent of returns filed before April 1 receive refunds, while 61 percent of late filers end up owing money. It's no wonder that so many taxpayers put off the chore. The Fiscal Times reports an IRS estimate finds that it takes 16 hours to fill out a 1040.
Take your time when preparing your return; mistakes, even simple ones, will delay a refund. The three most common mistakes are math errors (prevented with a calculator or tax software), incorrectly written Social Security numbers (proofread!) and failure to sign or date the return (did I mention that you should proofread?) That's why the Fiscal Times recommends putting the return aside for a day to review it with fresh eyes. "If you're in a mad rush and finishing off your taxes at the last second, that's when mistakes are more likely to occur," says Steven Warren, a CPA at Minneapolis-based Lehrman, Flom & Co. In other words, proofread.
Your return will be considered on time if it's postmarked or electronically submitted as of April 15, 2014. Some post offices stay open late on Tax Day to accommodate the procrastinators seeking a last minute postmark. Use the online location tool to find the nearest post office with extended hours at the USPS website here.
Better yet, file online. The IRS says that returns filed electronically are processed faster and tend to have fewer mistakes. More than 80 percent of Americans filed their tax returns electronically last year.
If you expect a refund, arrange for direct deposit. It’s the fastest way to get your money from the IRS – and no chance that the check will be lost in the mail.
US News and World Report reminds taxpayers that anyone who wants can get a filing extension to Oct. 15 just for asking. But remember that you don’t get an extension on the deadline to pay. If you think you owe taxes, you’re expected to estimate the amount due and send it to the IRS by April 15. If not, you face a penalty for paying late.
If you owe money, the IRS helpfully accepts plastic. That’s a more expensive payment option, because you'll pay fees charged by your credit card company, which can be up to 2.35 percent. You’re better off paying by check or electronic funds withdrawal online.
If you can’t pay what you owe, ask the IRS for an installment agreement, or hire a professional to negotiate for you. IRS rules for short sales and foreclosures, small businesses, investment losses and other issues can be particularly complex, so it may be worth assistance if these issues are complicating your tax picture.
If you file and later realize you made an error or forgot to take a deduction, you have three years to file an amended return to correct your boo boo.
The Rochester Post-Bulletin published a story authored by Sen. Amy Klobuchar that warns that identity thieves are falsely filing taxes for unsuspecting taxpayers in order to steal their tax refunds. "This problem only continues to grow," she writes, adding that between 2011 and 2012, the number of identity theft tax returns affected more than 1.8 million taxpayers. Klobuchar is sponsoring legislation to crack down on the crime. "The STOP Identity Theft Act would take important steps to streamline law enforcement resources and strengthen penalties for tax identity theft," she writes.
She says the best way to prevent identity theft is to protect the privacy of your Social Security number and never provide personal information to anyone unless you initiate the contact either over the phone, U.S. mail or email.