It’s March and you know what that means. The madness has begun. That’s right, March Madness is here. Are we just talking about basketball? No, we are all talking tax season! Avoid shooting granny shots or air balls, and enduring the ridicule of your best friend by letting the intrigue of the tourney distract you from taxes. So let’s review and learn how to hit that “nothing but net” shot this year and be prepared before filing your income taxes.
Passing the Ball
You and your accountant/tax preparer are on the same team, therefore you should both work as a team to score points and win the game. Gather all your tax information from the tax year, such as W-2’s, 1099’s, charitable donation acknowledgement letters, K-1s, and other tax forms, including a health insurance 1095, a mortgage loan interest 1098, a 1098-E for student loans, a 1098-T for tuition statement, and pass that ball to your CPA. Have your investment advisor join the team too by submitting your 1099 and K-1 forms directly to your preparer. Your Organized Instincts daily money manager is part of your team too; preparing charitable donation reports, rental home income and expense reports, or an estimated tax payment and refunds report. Did you receive a 6475 letter about the 2021 tax stimulus or advance child tax credit payments? A daily money manager can help answer that question. So don’t be a ball hog by holding onto these documents until the last minute of the game. Your tax preparer can’t make the last minute buzzer-beater shot, if they do not have the information needed to complete your tax return.
Don’t forget to confirm you have copies of last year’s tax returns. Did you receive a print copy or a digital copy? Due to the Covid-19 pandemic rather than receiving a print copy from your preparer you likely received it digitally. Check your records to ensure you have a copy of your own. Depending on your preparer to retain copies of source documents and returns is not a fool-proof record retention strategy. Are you switching preparers for this tax season? Then you’ll need to provide a copy of last year’s returns to your new tax preparer.
Expect a new way of signing your 2021 tax return or extension forms this year. Due to the ongoing pandemic, you are likely to encounter new systems when it comes to signing your tax returns. So be ready and plan extra time when utilizing these new procedures of approving, signing or uploading completed documents or you’ll find yourself fouling out of the game with frustration.
Don’t Foul Out
April 18th, 2022 is a very important day with regards to making payments to the IRS. First, it is the due date for paying taxes due for returns filed, or making a tax payment if your return is extended. It’s also the due date for the first 2022 estimated quarterly tax payment. Whether you owe one payment or multiple, now is the time to get your funds together and plan to pay. Avoid traveling—dribble down the court! By paying your extended and estimated payments on this date, you’ll avoid any fouls or penalties.
To avoid penalties and interest, pay these payments online to eliminate the possibility of your check being lost in the mail. Use your IRS.gov online payment or the EFTPS.gov to make Federal tax payments. Both sites provide confirmation numbers and confirmation emails. Check at your state level for online payment tools as well. Many states offer quick, easy, no logon required options for submitting payments. Why wait for a payment to go through when you can make your shot now and beat the buzzer?
We understand the stress of March Madness. With each passing day, April 18th, 2022 looms closer and closer. But when you play by the rules, you’ll be in the zone. Give yourself a slam dunk this tax season with less stress and no headache by being prepared to play.
At Organized Instincts, our seasoned team of baller money managers can help you shoot and score with your financial tasks and routines. Schedule a free consultation today and learn how we might give you an assist for that swish.