1. Adjust Withholding; Make Estimated or Additional Tax Payments
The IRS has a tool called the “Tax Withholding Estimator” that enables individuals to perform a paycheck or pension checkup. This tool is important for individuals who received a smaller refund than expected or owed an unexpected tax bill last year.
If the Tax Withholding Estimator recommends a change, the employee or recipient of a pension or annuity income can make adjustments. An employee can submit a new Form W-4 to their employer. A recipient of a pension or annuity income can complete Form W-4P and submit it to their payer. Note that these forms should NOT be sent from the employee or recipient directly to the IRS.
The calcuation of quarterly tax payments is especially important for independent contractors and business owners. Massey and Company will calculate your quarterly taxes upon request, using sophisticated tax projection software.
2. Gather Documents and Organize Tax Records
Massey and Company, along with the IRS, strongly suggests that all taxpayers should develop a recordkeeping system. This can be electronic or paper, but it serves to keep all the important information in one place. We strongly recommend the use of QuickBooks Online for all our business clients. The IRS says that taxpayers should keep copies of filed tax returns and all supporting documents for at least three years.
To avoid refund delays, be sure to gather all year-end income documents before filing a 2019 return. Filing too early, before receiving a key document, often means a taxpayer must file an amended return to report additional income or claim a refund. And it can take up to 16 weeks to get an amended return refund.
Remember to also notify the IRS of address changes and notify the Social Security Administration of a legal name change to avoid refund delays.
3. Renew Expiring Tax ID Numbers
An ITIN (Individual Taxpayer Identification Number) is a tax ID number used by any taxpayer who doesn’t qualify to get a Social Security number. Taxpayers with expiring Individual Taxpayer Identification Numbers can get their ITINs renewed more quickly and avoid refund delays next year by submitting their renewal application soon.
Taxpayers who fail to renew an ITIN before filing a tax return next year could face a delayed refund and may be ineligible for certain tax credits. With nearly 2 million taxpayer households impacted, applying now will help avoid the rush as well as refund and processing delays in 2020.
4. Be prepared to File Electronically; Use Direct Deposit for Refunds
Electronic filing is the easiest, safest and most accurate way to file taxes. When you combine Direct Deposit with electronic filing, you get the fastest, easiest way to get your refund. With Direct Deposit, a refund goes directly into the taxpayer’s bank account. No need to worry about a lost, stolen or undeliverable refund check.
Direct Deposit is easy to use. Taxpayers select it as their refund method through tax software or let their tax preparer know they want direct deposit. Taxpayers can even choose Direct Deposit on a paper return. Direct Deposit also saves taxpayer dollars which makes it a win-win solution for everyone.
Massey and Company offers electronic filing and direct deposit to all its clients.
Something to Keep in Mind
The IRS cautions all taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer.
The tax and accounting services provided by Massey and Company can help to guide you in getting a jump-start on your taxes. For more information, contact us today by calling 678-235-5460, or send an email to gary.massey@masseyandcompanyCPA.com. You also have the option to contact us through our website.
Massey and Company is a boutique, Atlanta-based CPA firm serving the needs of small businesses and their owners. We handle tax matters, IRS controversy, tax debts, back taxes, bookkeeping, and accounting. Our offices are in the Buckhead neighborhood of Atlanta and we welcome face-to-face visits.
Gary Massey, CPA
Massey and Company CPA
3550 Lenox Road NE, Suite 2100
Atlanta, GA 30326