1040 Procrastination? Consider These Strategies

The tax-filing deadline is fast approaching. The due date was extended to April 18 this year, because April 15 — the regular filing date — overlaps with Emancipation Day.

That means the countdown is on. If you haven’t started the filing process yet, here are some tips to help you gather your information and complete your return on time:

Determine your income for 2015: Over the past few months, you may have received a variety of tax forms for reporting your income to the IRS: Forms W-2, 1099, K-1, etc.
The IRS uses these forms to distinguish between the different types of income you may have received throughout the year, such as wages, interest, dividends and business income. Don’t forget to include your gambling winnings, as well — the general rule is that all income is taxable, unless specifically excluded from tax by law.

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Itemize your deductions: The IRS allows you to deduct certain expenses against your income. You can either take the standard deduction of $6,300 for a single taxpayer ($12,600 for married couples filing jointly) or itemize your deductions. You can itemize deductions related to medical and dental expenses and state and local income taxes, as well as property taxes, mortgage interest, charitable gifts and other miscellaneous deductions, like job expenses. Some of these deductions are subject to phase-outs and other limitations. The important detail to note here: make sure you have documentation of any expenses you are claiming as deductions, and maintain these records until the statute of limitations expires for that particular return.

Draft the tax return: Instead of pulling your hair out trying to decide what forms you need to file, and what tax rates apply to different sources of income, consider scheduling a meeting with a qualified tax preparer, like a certified public accountant (CPA). The more organized you are, the smoother the tax preparation process will be. Tax law changes every year, so look to the experts to help you out.

Next steps for filing late: What if you can’t meet the filing deadline? The good news is that the IRS will allow you to request an automatic extension of time to file your return. The bad news is that the extension does not push back the deadline for paying your tax. You can include the payment with Form 4868, which is the Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Visit the IRS’s website for more information.

The penalty for failing to pay tax is generally 0.5 percent of the tax per month, for each month the amount remains unpaid. So what should you do if you can’t make your tax payment? While the IRS does allow for payment plans or installment agreements, you must file all required returns before applying for these provisions. Here’s a more detailed run-down of the options that are available to you.

Now sharpen that pencil, grab a cup of coffee and get started!

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Amy Libertoski
Amy Libertoski

CPA, PFS | Principal, Senior Financial Advisor

Amy Libertoski, CPA, PFS, is a Principal and Senior Financial Advisor with Wipfli Hewins Investment Advisors in Wausau, WI. Bringing 20 years of experience in the financial services industry, Amy specializes in financial, estate and retirement planning for families, as well as tax planning and preparation for high-net-worth investors.

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1040 Procrastination? Consider These Strategies

time to read: 2 min