Tax season may be over, but that’s not a good enough reason to put your guard down, particularly if you filed an extension or if you are looking to reduce your tax bill in the year to come. After all, just like in sports, the most important time of the year is the “off-season.”
Read on to learn how to handle your “off-season” in preparation for the next year’s tax season.
Read Also: How to Win Tax Season
Tax Extension Timeline
If you are one of the many taxpayers who opted to file an extension, you now have six months to submit your tax return to be processed. While that may seem like a lot of time, don’t be lured into a false sense of security. There are actually a few things to be aware of in order to avoid a tangle with the IRS.
- Manage Your Outstanding Balance – One of biggest misconceptions about tax extensions is that, when you file one, the extension prolongs the time you have to pay the outstanding balance due to the IRS. This is not the case. Your outstanding balance DOES NOT receive an extension and the IRS will be expecting your payment on or before the deadline.
- Avoid Penalties and Interest – It’s in the best interest of your wallet to supply the IRS with correct tax information as soon as possible, especially if there are some corrections that have to be made. The sooner you get your tax information filed, the better chances you have at avoiding penalty fees and interest.
- Give Your Tax Preparer Time – Giving your tax preparer enough time to review your tax information is the most important aspect of filing your taxes. By allowing your preparer more time to review your information, fewer errors (if any) will be made, which will help you avoid headaches from the IRS.
Become A Master Of Off-season Tax Prep
Becoming complacent after tax season can be unexpectedly costly. Find out what you can do to keep your tax strategy in tip top shape in the off-season.
- Get Your (Financial) House In Order – Planning and setting your finances straight between May and December will help you save money on your tax return.
- Stay Connected – Keep in touch with your tax professional during the off-season. By keeping them in the loop with regard to events that occur during the year, they will be able to help and lower your risk of negative tax consequences. Simply put, the more information your tax preparer has throughout the year, the more money you will likely save.
Regardless of whether you filed your taxes in April or requested an extension, staying connected with your tax professional is generally regarded as a best practice. This simple instruction will help you limit your tax liability while greatly reducing the number of errors on your return, which has the added benefit of keeping the IRS happy.
Email Rea & Associates to speak with a tax professional today to find out how you can use your off-season to prepare for next year’s successful tax season.
By Joss Celuch (New Philadelphia office)