Saturday, February 8, 2014

Chaffing At the Bit? Hold Your Horses..Don't File Too Early!!

"Tax Season is Here", "Tax Season is Here"...slogans everywhere, big box companies advertising for you to come in the door, other software companies selling DIY tax software (by the way I do NOT recommend that-see why here)..oh wait! even the IRS says it's "Free File" has been open since early January!! So what should the poor common man do? 

First, let's all take a deep breath, here procrastination for a month or so may be the key to avoid a mess on your hands later! Besides procrastination, what other reasons could there be to wait to file your taxes? 

Corrected forms and Amendments:  Hello!! Who hasn't received a corrected form in the mail after they have send their return on it's way? Many investment companies do not have information from partnerships till late in the season, so if some of your money is invested in limited partnerships, your brokerage firm or investment company will send you supplemental forms later. If you have filed with incorrect information, you will have to file an "amended tax return". Some other times employers/ universities/ mortgage companies do make mistakes as well. If you have filed early, got a refund and have spent it, will you have the money to send to the IRS with an amended return if you now have to pay?

Software Updates:   Software companies have to wait for a go ahead from the Internal Revenue Service before they can release final updated forms. They may have early release forms in place & updates to the software will change calculations. (Take this from someone who has been there! ) If your tax return involves some of these complex forms, waiting for IRS approvals is a great idea. 

Do You Usually Owe On Your Tax Return? If you do usually owe on your taxes, waiting to file will be a great idea. You can make sure you have all your papers, you know all the possible deductions available to lower what you owe, and have researched it well. 

To make that determination, to file early or late, look at all the pros & cons that relate to your filing situation & consult with a tax professional. 

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As always, read my disclaimer here. Please consult a qualified tax professional for your unique tax needs. 
More of my contact information is on my website, www.mntaxsolutionsllc.com