Remember those Staples commercials from the 90s, with the happy dad clacking staplers together as he skipped down the aisles with two miserable kids dragging behind him as “It’s The Most Wonderful Time of the Year” played? Of course you do.
Well, it’s the government’s turn to sing that song now while clacking $435 claw hammers down the aisles! Tax season has officially begun! The IRS has opened up for tax return acceptance today.
Because of Emancipation Day and April 15 falling on a Friday, the deadline to get your personal income taxes filed is April 18, 2016, precisely four months from today.
So as you compare tax software packages or look for the right tax professional, here’s some tips to keep in mind to have a saner tax season that hopefully minimizes the damages.
- If you file for a six-month extension, this only gives you extra time to file the return without getting smacked with a late filing fee. It doesn’t give you extra time to pay taxes if you owe them. Interest will still rack up like mob terms.
- Make sure you’re using the correct filing status. A mistake lots of single parents make is filing as single when they are likely head of household, and if your divorce didn’t finalize yet you’re likely married filing separately instead of single. If need be, consult an attorney if you have dubious marital status and don’t know what status to use.
- “TurboTax told me it was okay!” has never held up in Tax Court or in a desk audit. Tax software programmers generally don’t know tax law. If you have a fairly complex personal and/or small business situation, it’s prudent to work with a tax professional from the get-go or having them review your self-prepared return.
- KEEP GOOD RECORDS. I can’t stress this enough! Personal tax records need to be kept for the past three years, six if you’re a small business. I’d recommend at least 10 if you have a more complex structure like a C corporation. Once you’re self-employed, you’re held to a much higher standard for recordkeeping.
- Game devs in particular need to be mindful of things like when you started working on a game, when you hope to finish it, and how much you’ve spent on actual development compared to the other expenses of just having a business. Your dev costs can wind up having special treatment. For more details, check out my book all about taxes for indie developers!
- If you’re working with a tax professional, work with a licensed pro like an Enrolled Agent or CPA who concentrates in taxation. Avoid the places that exist solely to sell you refund anticipation loans or promise you a bigger refund. A reputable tax professional doesn’t base their fee on the size of your refund or promise to get you more money. If they do, that typically entails fraud.
- Beware of tax collection scams. The IRS and most state tax departments will always mail you a written notice. They don’t call or email you unless you’ve had prior contact. G-men only come to your door if you’ve been ignoring those notices since the Second Avenue subway broke ground.
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Any other tax tips, feel free to share in the comments!