Tax time is upon us. For most, the magic date is April 15th, but not all. Some entities are required to file on March 15th every year. Regardless, it's definitely tax time for just about everyone. Here are a few things to keep in mind.
* You won't necessarily receive all of your tax forms by January 31st. This is a common misconception. We have had clients, especially those expecting refunds, file early, only to find that they received a tax form after filing. I recommend that you wait until March 1st to file but this is not a hard and fast rule. It's simply my recommendation based on experience and the experiences of our clients.
* The task I find most daunting is the gathering of all of the forms and data. I recommend that you start a paper file and that you print every tax form you receive and keep a copy in the file, whether you receive it electronically or via snail mail. Depending on the complexity of your taxes, you'll probably have forms sent to you via several different avenues and, as outdated as it might be, I've found paper copies to be the easiest way to collect the forms and ensure that you don't miss something.
* Remember that some forms are informational. Every year we get calls from people concerned that they received a form, usually a 1099, with a large dollar amount. The concern is that there is going to be a big tax bill on the total amount. That is often not the case. Some of the forms are simply informational and a way for you and the IRS to keep track of certain kinds of data. Therefore, don't panic. Simply call your financial advisor or financial institution for clarification.
* CPA firms seem to be overwhelmed. I have noticed a large decline in the CPA field - a decline in the number of people in the field and a decline in service. As in the financial services industry, the accounting industry is experiencing an aging workforce and a large number of people choosing to retire, coupled with fewer college graduates willing to put in the hours required of the profession. It is becoming harder and harder for us to find good CPAs and/ or CPA firms that we are comfortable recommending. My point - try to be patient - especially if you have a good firm. It's becoming more and more common for extensions to be filed even if you get your info to your CPA in what before seemed like plenty of time. If you change CPA firms due to lack of service, you could easily find yourself in the same situation at the successor firm.
Best of luck for this tax season! We're hoping for huge refunds for all of you.