Avoiding panic at tax time

March 29, 2009 9:19:37 AM PDT
Procrastination is common at tax time, but when it comes to preparing your tax returns, the longer you wait, the more likely you are going to make costly mistakes or overlook money-saving tax deductions. Ginger Broderick, President of Broderick and Company CPAs, joined us with tips. What are some common mistakes in preparing your own return?
The most common error is one forgetting to sign and date his return. Many people are in a rush and also make many unnecessary mathematical errors or transpose their social security number.

Do I have to attach all of my W2s and 1099 documents to the return?
The documents you need to attach to your tax return are only those that show proof that Federal Income Taxes were withheld. Many freelance individuals think their 1099-Miscellaneous documents must be attached to the return-- but they do not. Many retirees have Federal withholding taken out on their social security payments, so that year-end statement must be attached to the return.

What do I do if I find mistakes in these documents?
You must review all documents for possible errors. There are frequent mistakes in W2s and 1099 Interest, Dividend, and Miscellaneous Statements. Contact the companies that issue the information and request corrected documents. Do this as soon as possible. Many people wait until the last minute and can't get their information because the companies are too busy processing other requests.

Should I file my return electronically?
More than 70 million taxpayers filed their returns electronically and the trend is ever increasing. This opportunity is easy, fast and the most accurate way to file a tax return. However, some tax programs are miscalculating the tax that is due. Be sure to double check the figures with a tax booklet or visit the IRS website at www.irs.gov for complete information. Don't wait until the last minute to file as others are doing the same thing! The computer systems get overloaded and you don't want to risk having a late-filed return.

Can I pay my taxes electronically?
Electronic payment options are convenient, safe and secure methods for paying taxes. Taxpayers can authorize an electronic funds withdrawal or use a credit card for the payment of taxes.

How long does it take for me to receive my refund?
If you are getting a refund, I suggest you consider direct deposit. You need to provide your bank's ABA # (routing number) and correct account numbers. Incorrect numbers will cause the refund to be misdirected. If you file a joint return and get a direct deposit refund, it must be wired to a joint checking account. The process will take approximately 3-5 weeks or it could take 8-12 weeks for a physical check to be returned to you.

What if I don't have time to finish my tax return by April 17th?
You can request an extension of time to file on Form 4868. The extension does not give you extra time to pay your taxes. You will owe interest on any money not paid by the April deadline, plus a late payment penalty.

For more information, contact the IRS by calling 800-829-1040 or visit their website at www.irs.gov.