“…in this world nothing can be said to be certain, except death and taxes.” Benjamin Franklin.
Though Mr. Franklin understood clearly that paying taxes was a certainty, he could not have imagined just how complex tax filing would become. The U.S. tax code is a daunting 75,000 pages and I suspect that the 150,000,000 Americans that file tax returns rely heavily on professional preparers or tax preparation software to get it right.
This year we know with certainty that April 19th will mark the end of tax season. That is correct, April 19th for Maine and Massachusetts residents. April 15th falls on a Friday which is Emancipation Day, a legal holiday in DC. Monday, April 18th is Patriots’ Day, with holiday status in Maine and Massachusetts, so you procrastinators get an extra four days to file.
I know that it is early February, but what else have you to do on these cold dark nights other than to gather your tax information? I recommend that you get started this weekend. Begin by looking over last year’s return or tax organizer. If you are like 80,000,000 Americans and have a professional preparer, make some notes for him/her on any changes that that might have taken place during the year. Be sure to note, address changes, marriage or divorce, kids going off to college, job changes, real estate sales or home improvements, to name a few. If you have provided bank account information for direct deposit or automatic tax payment, be sure to communicate any changes in banking information. Remember, your tax professional may have a great understanding of the code but how it is applied can change, if your personal circumstances change.
Finally, it is important to organize your information. Sometimes the most challenging part is to get clients to open their mail. All of those envelopes stamped Important Tax Information should be opened and reviewed for accuracy. Round up the W-2s, 1099s, Social Security statements, health care forms, college tuition information and mortgage interest. Review your checking account for charitable contributions, estimated tax payments, excise taxes and medical expenses. If you squirreled this important information to an ultra-safe place but can’t remember where that place is, most tax forms are readily available on line.
For many the real challenge of Tax Time is just facing the fact that preparing them is inevitable and best done early. Regardless of how well versed your tax professional is, it is not possible for them to correctly prepare your return unless you provide all of the necessary information. Thus, I encourage you to get organized and start today.
Jamie Boulette has 30 years of tax experience and is the Managing Director of One River CPAs (PFBF CPAs) with locations in Oakland and Bath.