A look at what last-minute filers and those filing for an extension need to know
(RIVERWOODS, ILL., April 3, 2009) – With less than two weeks before the April 15 income-tax filing deadline, millions of taxpayers are rushing to complete their taxes and millions more realize they’re going to need more time. CCH CompleteTax (www.CompleteTax.com) online tax preparation and e-filing service helps both last-minute tax filers and those needing to file for an extension.
“The first step for taxpayers who have yet to file their tax return is to honestly assess which camp they fall into: Will you realistically be able to complete your return by April 15 or do you need more time?” said David Bergstein, CPA, a tax analyst for CCH CompleteTax. “There’s no penalty for filing for a six-month extension as long as you follow the rules, but there’s also no purpose in postponing the inevitable if you do not need to.”
In either case, you need to pay any income tax owed by April 15.
“The extension is for the tax return, not for the taxes you owe,” said Bergstein.
Tax Season Countdown
For those individuals planning to complete and file their returns by April 15, CCH CompleteTax offers a few tips below and in a podcast that may help make the last days of tax season run a bit smoother.
- Contribute to an IRA for 2008. Contributing to an IRA can reduce your taxable income by as much as $5,000 ($6,000 if age 50 or older). Taxpayers have until April 15, 2009, to make a 2008 contribution.
- Review your tax return before sending it in. Among the most common mistakes people make on tax returns are forgetting to include all the basic, but necessary information, such as Social Security Numbers, making simple math errors or forgetting to sign their returns
“A great feature of tax software, such as CCH CompleteTax, is that it will check your work for you. So if information is missing, it will let you know what is required and where you need to provide this,” said Bergstein.
- Keep a copy of your tax return in a safe place. Even if you use computer software to prepare and e-file your tax return, it’s a good idea to keep a paper record, along with any back up for the return in addition to the electronic return. Generally, the IRS can audit tax returns going back three years. However, the time limit does not apply in cases where it can be shown the intent is fraud or tax evasion. State revenue agencies also have various time limitations. As a result, it’s a good idea to hold onto tax returns indefinitely.
- Adjust your withholdings for 2009. Most people will see less withheld from their paychecks starting April 1 as a result of the “Making Work Pay Credit” included in the economic stimulus legislation earlier this year. However, if you received a large tax refund based on your 2008 income tax return, check with your employer to make certain the withholding is appropriate so that you don’t end up having too much still withheld during 2009.
- Start early tax planning earlier. While taxpayers have until the following April to make IRA contributions toward the previous year, most tax-planning activities have to take place during the tax year to yield savings. Look at your tax return while it’s still fresh in your mind to see where you may be able to reduce 2009 taxes by taking steps now or over the next few months. For example, try contributing to a Flexible Spending Account, contributing more to your retirement account or making energy-efficient home improvements.
“No one likes paying taxes and most people could significantly reduce what they owe with a little planning,” said Bergstein.
Filing for an Extension
The program will automatically fill in relevant information on the Form 4868 used for filing an extension for taxpayers that have started their returns with CompleteTax and are requesting an extension. Individuals that have yet to start their return can still use CompleteTax to file for an extension. Taxpayers have the option of letting CompleteTax electronically file the extension form for them, or they can print and mail the form to the IRS.
“There are a lot of reasons why people may not be able to finish their tax returns by April 15. But it’s important to make sure you file for an extension. With CCH CompleteTax, it’s easy, takes just a few minutes and saves you from fines and penalties,” said Bergstein.
About CCH CompleteTax
CCH CompleteTax , an online tax preparation and e-filing service for the do-it-yourself taxpayer, continues to set the standard when it comes to making online tax prep and e-filing easy, efficient and affordable. CCH CompleteTax offers comprehensive support to help taxpayers through each step of preparing and e-filing both federal and state income tax returns.
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading products are The ProSystem fx® Office, CorpSystem®, CCH® TeamMate, IntelliConnect™, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill.
Wolters Kluwer is a leading global information services and publishing company. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Visit www.wolterskluwer.com for information about our market positions, customers, brands, and organization.