Do you wait until the last minute before undertaking tasks and assignments? Most people will procrastinate until they can wait no more and then rush to beat the deadline.
When it comes to taxes, there are quite some pitfalls of taking this route.
Missing Documentation Filling taxes has a lot to do with having all the required documentation.
An Enrolled Agent or other Tax preparer will need this documentation before preparing your tax returns.
However, when you wait until the last minute, you may find that a document or several documents will be missing and getting them in on time may not be possible.
However, when you file your taxes in good time, you will have time to search for missing documents or to request for a replacement if need be.
Tax Preparers are Unavailable Most tax preparers will be very busy and even unavailable when it nears the tax deadline.
For those who wait until the last minute, they may find it hard to get a tax prepare to meet with to file their taxes, and this will only lead to more frustrations and panic.
Even for those who get a last minute tax preparer, they may not get quality services, as most preparers will give priority to clients who made appointments earlier.
Therefore, to avoid this last minute rush for a tax professional to handle your tax return, it is advisable to book one way before the tax deadline.
Filling for an Extension Some people wait until the last minute and when they find that they do not have enough time to gather all the documentation needed, they opt for filing for an extension.
However, filing for an extension only extends the time for filing the return and not the time for paying taxes.
Therefore, if while preparing your returns at the extended deadline, you discover that you paid less on your tax, you will probably have to pay the tax with penalties and interest.
These extra costs can be avoided by filing in good time so that any shortfall in estimated tax payments can be met within the deadline.
Miss Out in Saving Opportunities The tax law provides taxpayers with various ways of saving on their taxes by taking advantage of various tax incentives.
However, for those who file last minute, their entire focus will be just to get the returned filed on time and thus, they are not thinking about these tax saving opportunities and lose out on some tax breaks, credits, or deductions.
When it comes to taxes, there are quite some pitfalls of taking this route.
Missing Documentation Filling taxes has a lot to do with having all the required documentation.
An Enrolled Agent or other Tax preparer will need this documentation before preparing your tax returns.
However, when you wait until the last minute, you may find that a document or several documents will be missing and getting them in on time may not be possible.
However, when you file your taxes in good time, you will have time to search for missing documents or to request for a replacement if need be.
Tax Preparers are Unavailable Most tax preparers will be very busy and even unavailable when it nears the tax deadline.
For those who wait until the last minute, they may find it hard to get a tax prepare to meet with to file their taxes, and this will only lead to more frustrations and panic.
Even for those who get a last minute tax preparer, they may not get quality services, as most preparers will give priority to clients who made appointments earlier.
Therefore, to avoid this last minute rush for a tax professional to handle your tax return, it is advisable to book one way before the tax deadline.
Filling for an Extension Some people wait until the last minute and when they find that they do not have enough time to gather all the documentation needed, they opt for filing for an extension.
However, filing for an extension only extends the time for filing the return and not the time for paying taxes.
Therefore, if while preparing your returns at the extended deadline, you discover that you paid less on your tax, you will probably have to pay the tax with penalties and interest.
These extra costs can be avoided by filing in good time so that any shortfall in estimated tax payments can be met within the deadline.
Miss Out in Saving Opportunities The tax law provides taxpayers with various ways of saving on their taxes by taking advantage of various tax incentives.
However, for those who file last minute, their entire focus will be just to get the returned filed on time and thus, they are not thinking about these tax saving opportunities and lose out on some tax breaks, credits, or deductions.