Tax Season is Here- Now What?

While many people may define tax season as January 1- April 15th, I define it as starting when the IRS begins receiving tax returns (which they did on Friday 1/15./11).  Yes, there may be a few simplistic people out there that have all their tax documents.  Most of us are still in a wait and sit mode.  That doesn't mean that you can't work on getting your information together.  Even without your tax documents you can review or complete your tax organizer, if you choose to complete one.  You can also start to assemble your list of income and expenses for any activities that will not receive tax documents, such as rental or business income and expenses.  It is often helpful to make a list (which is where the organizer can come in handy) of the income and expenses that you expect to report for the year.

As a reminder, you do not have to wait until 4/18 to file your tax return.  You can have it prepared and filed earlier but still wait, if you prefer, until 4/18 to pay your balance due if you have one.  Several people that filed extensions were surprised by their sizable refunds they received.  They did not expect a refund but the changes in people's financial situations over the past few years have impacted income and taxes.  Unfortunately, these people ended up giving the government an interest free loan for an additional 6 months by not claiming their refund on time.

Some Interesting Tidbits for this Year

  • The tax filing deadline is 4/18/11.  That doesn't  mean you have to wait until the last minute.  Why 4/18?  Friday 4/15 is some sort of holiday in DC which then pushes the deadline on to the next business day (Monday 4/18).
  • The North Carolina Department of Revenue (NC DOR) has publicized that they will not delay the payment of refunds this year.  We will see if they can actually implement this change and find the funds for refunds.
  • The e-filing of returns with certain forms this year will be delayed until mid to late February.  This is because of the last minute tax law changes that the legislative bodies made.  The IRS has indicated that electronic returns will take priority to paper returns, even if the paper returns are filed earlier.  I would not let this delay affect your plans.  Go ahead and have your return prepared as planned.  If your return is impacted by the e-filing delay it will be sitting in the queue for when they begin to accept impacted returns.
  • Tax preparers are undergoing increased regulation.  All paid preparers will be required to have a preparer tax identification number (PTIN).  If you have ever had a tax return prepared by someone that did not sign the return that is a good sign to steer clear of that person. This increased regulation is good for the consumer as it should help eliminate unskilled and unprofessional preparers.
  • Preparers that prepare over 100 tax returns per year, like myself, are going to be required to e-file any tax returns that we prepare unless their are restrictions that will not allow a specific return to be e-filed.

 Feel free to contact me if you have questions, concerns, or comments.  I hope to see you soon!