Procrastinating your taxes? Some things to consider

You have the tax forms in your hands and the relevant documents on your desk. So why aren’t you getting down and filing your taxes yet?

Maybe you’re scared of making tiny, but critical, mistakes like writing $1,000 instead of $100. Maybe you’re the type who works best when deadlines are around the corner. Or maybe, just maybe, you want to humor that rule-breaking rebel in you.

No matter your reason, here’s what you need to know about putting off your taxes ’til the last minute.

What Happens When I Put Off My Taxes?

That depends on what you’re putting off.

If you put off the filing of taxes, that’s fine. It’s better to file a correct return late than an error-filled return early. Also, you have until April 15 this year to request an extension for filing last year’s federal and state income returns on October 15. There are plenty of ways to do this, such as:

• Taking advantage of IRS’ various e-file options;
• Taking advantage of IRS’ Free File software;
• Filling out Form 4868, aka Application for Automatic Extension of Time to File U.S. Individual Income Tax Return;
• Using reliable tax software – such as TaxACT, H&R Block, TurboTax and TaxSlayer – to extend the period for filing returns; and
• Asking your tax preparer/accountant to file your extension for you.

If you put off the payment of taxes, that’s a different matter. The IRS might add interest and penalties, on top of the amount you already owe. In this case, you can request an Online Payment Agreement by logging on to the IRS website, or calling them up via 800-829-1040 if you’re an individual or 800-829-4933 if you’re an individual who makes money primarily from your own business or hobby. This way, you’ll be able to make late payments on your own terms.

Can I Still Get a Refund at the Last Minute?

Yes. With the help of tax software, you can file your taxes online as usual – as long as you don’t go past the midnight of April 15 deadline. Throughout this process, you’ll be guided through approximately 350 legitimate tax credits and deductions, and be alerted every time you make a mistake while entering data into the system.

But I Still Don’t Feel Like Filing Taxes. What Do I Do?

Well, whether you do it right now or not, the fact remains that you’re going to have to do it eventually. It’s not like you want the IRS after your tail, right?

If staring at that mountain of paperwork isn’t doing anything for your procrastination, here’s what you can do:

• Keep Your Paperwork Organized. It’s a lot less intimidating to look at a neatly arranged stack of papers than a cluttered, all-over-the-place one.
• Break Down the Paperwork. It’s also much easier to take on a major task if you break it down into smaller, more manageable parts. For example, you can fill up your 1099s one day, W-2s the next and so on. While you’re at it, you can set deadlines for each of your tasks, so you won’t end up putting those off too.
• Ask Your Accountant About Early-Bird Discounts. Accountants aren’t just there to help you tell the subtle differences between a tax credit and a tax deduction. They can also give you a solid, immediate incentive to file right now, by dishing out early-filer discounts, penalizing late filers and employing other tactics to let you know that, yes, your tax accountant means business.
• Have an Accountability Partner by Your Side. If being with your accountant makes you more nervous than relaxed about your taxes, it’s probably better to ask someone else to keep you on your toes. Ask a trusted relative or friend to remind you to fill out a certain form by its due date.
• Remember to Check Your Returns for Accuracy and Completeness. You know what tax rules are like: They change faster than what most people can keep up with. Go over your deductions, refunds and credits one more time, and make sure they’re compliant with the most updated IRS rules. That said, if you have strong perfectionist tendencies, you might want to leave this one to an expert. You’ll probably feel more reassured hearing the words “Your taxes are A-OK” from a professional.

It’s never too late to keep your taxes in order. As long as you comply with the rules and you have legitimate reasons for requesting extensions, the IRS will keep you in its good books – no pun intended.

Images by Robert Servais and stokpic