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Mar 10, 201410:27 AMSmall Business, Big Ideas

with Jean Willard

5 useful strategies for this tax season

(page 2 of 2)

  • Rush to finish. There are many reasons we rush: refund potential, FAFSA, wanting to get it done for another year. But don’t rush. I can’t emphasize that enough. If you file too early and more documents arrive, you must file an amended return. Remember that many reporting documents must be mailed out each year by Jan. 31, but brokerage statements are allowed an extra month. If you have an interest in a pass-through entity, the due date may be even later. So filing early may create a requirement to file a second amended return.
  • Matching. The most common notices we see now are CP2000 notices from the IRS. These notices occur because a payer has reported a payment to a taxpayer that has not been reported on the taxpayer’s return. Many times these notices are automated without intervention from a human, so an amount may be reported that cannot be detected by IRS computers because it isn’t readable or reported where IRS expects to see it. The moral is to be sure that all 1099s, W-2s, W-2Gs, as well as all taxable income are reported on your return and on the appropriate tax return lines. If you get a notice, don’t panic — the matching process is a good one, but not without error. Be sure to respond and identify the line on which you reported the item in question.

If you are a procrastinator, vow to work harder to file earlier. Pressure at the last minute can lead to errors. Take your time and it should be easier to file an accurate return while minimizing the taxes you must pay. 

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