No reason to wait until last minute to file tax returns

WASILLA - The holiday rush is over and New Year is in full swing, which for many means the beginning of tax season.

Although the deadline for filing federal income tax returns is months away (April 17 this year), the process of gathering personal financial information, documentation and receipts should begin now, tax experts say.

Although many wait until the deadline, the best move is to get your taxes done as early as possible, said Dianne Woodruff, a CPA and owner of High Country Accounting in Wasilla.

"Gather up that information and get it in quickly," she said. "Make sure you get that in as early as you can. As soon as you have that last W2 or whatever, do it. If your tax preparer gives you an organizer, fill it out before you go for your appointment."

For those who do their own tax returns, procrastination won't change how much you owe or get back as a refund, she said. Technology has also made it much easier for people to effectively and safely file their taxes themselves, she said.

"You can use one of the computer software programs out there," she said. "TurboTax is probably the most common. If you have real complicated issues, that's probably not for you, but for the basic return it's probably fine."

One mistake people make is not getting the newest version of the software each year, Woodruff said. You have to get updates or new software because tax forms and reporting guidelines change from year to year.

If navigating a tax program also seems a little daunting, there's always the Internet, Woodruff said. More and more individuals are choosing to use the IRS E-File service.

"I file mine online," Woodruff said. "I've not had any trouble with that at all. It's fast, it's easy. There are some concerns with a lot of my business (clients) about filing their W2s online, though. They're concerned about a liability issue. But for doing your personal stuff, I've not heard of anybody having a problem with it."

In fact, email is now the preferred way for people to file their tax returns, according to the IRS.

"At the IRS, we're working hard to make the process of filing your taxes as quick and easy as possible," IRS Commissioner Doug Shulman says in a statement about this year's tax season. "Providing quality service is one of our top priorities. It not only reduces the burden on taxpayers, but also helps in filing an accurate return right from the start."

People also will have a couple of extra days to file this year because April 15 falls on a Sunday and April 16 is Emancipation Day, which is observed in the District of Columbia.

Those opting to file online can do so starting Jan. 17 at irs.gov. You can also find downloadable tax forms there.

One of the most common questions Woodruff hears is how does someone know if he or she needs professional tax help or can do it themselves.

"Well, if you're asking yourself that question, you probably need to be getting some help," she said. "It's worth it to hire somebody to get the right answers."

Those who think waiting for the last minute means keeping their money earning interest and out of the government's hands, the wait in most cases isn't worth it, she said.

"At the current interest rates, I don't think that's going to be a very significant amount (of savings)," she said.

Another tip Woodruff said she has for tax time is to make sure you take all the deductions you're allowed.

"I hear people who say that they're not going to take this deduction or that deduction because it's going to flag an audit," she said. "You want to take legitimate deductions and don't hesitate to take a legal deduction - but don't fudge."

For those who have changed jobs during the past calendar year, now is also a good time to contact former employers to make sure they have your updated address to send your W2 or 1099 forms.

For employers, "Now is a good time to ask your employees to update their W4s so they can be current for the New Year," she said.

Another thing for those doing their own taxes to remember: if you depend on tips as part of your income, report those correctly on your tax return, Woodruff said.

"With luck, it was reported correctly on their W2," she said. "People should remember that the W2 actually gets turned in to the government, and if that doesn't show up on your return, there may be some questions about it. The safest thing is just to look at your W2s and make sure your tips make sense - and don't cheat on your reporting."

Contact Greg Johnson at greg.johnson@frontiersman.com or 352-2269.

TAX HELP

• The IRS has begun a new pilot program where taxpayers can get assistance through two-way video conferencing. The IRS is conducting a limited roll out of its video conferencing technology at 10 offices and two other sites, and may expand to more sites in the future. A list of locations is available at IRS.gov.

• Those with smartphones can download a free application called IRS2Go at the Apple App Store or Android Marketplace. With the app, taxpayers can check on the status of a tax refund and get other helpful tax information.