The IRS urges taxpayers to act now to avoid “tax-time surprises” and ensure smooth processing of tax returns.
It is never too early to start preparing. For this reason, we have arranged four tips to help people file taxes on time.
1. Adjust Withholding; Make Estimated or Additional Tax Payments
“Tax Withholding Estimator” enables individuals to perform a paycheck checkup. This IRS tool is important for individuals who received a smaller refund than expected or owed an unexpected tax bill in the past.
If the Estimator recommends a change, employees make adjustments to their withholding taxes. In such a case, employees submit a revised Form W-4 to their employer. Note that employees should not send these forms to the IRS.
The calculation of quarterly tax payments is especially important for independent contractors and business owners. Massey and Company calculate quarterly taxes upon request, using sophisticated tax projection software.
2. Gather Documents and Organize Tax Records
We strongly suggest that all taxpayers utilize a tax record-keeping system. Whether electronic or on paper, this system keeps all the important information in one place. Many of our business clients use QuickBooks for this reason. Please note 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 tax return. Filing too early, before receiving key documents, often means a taxpayer must file an amended return to report additional income or claim a refund. Furthermore, it can take up to 16 weeks to receive a refund from an amended return.
Remember to also notify the IRS of address changes. Also, be sure to notify the Social Security Administration of legal name changes to avoid refund delays.
3. Renew Expiring Tax ID Numbers
An ITIN (Individual Taxpayer Identification Number) is a tax ID number used by a taxpayer who does not qualify for 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.
4. Be prepared to File Taxes Electronically; Use Direct Deposit for Refunds
Electronic filing is the easiest, safest, and most accurate way to file taxes. Direct deposit combined with electronic filing offers the fastest, easiest way to get a refund. Furthermore, direct deposit eliminates the worry of lost, stolen, or missing refund checks.
A direct deposit is easy to use. Taxpayers select it as their refund method through tax software or tell their tax professional. As an added benefit, direct deposit is less costly to the IRS, saving taxpayer dollars.
Massey and Company offer 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, especially those that are paper-filed, require additional review and take longer to process.
To get a jump-start on taxes, contact the firm today at 678-235-5460.