Why we’re filing later and what we can do about it.

The October 15 personal tax return deadline is history, and 2013 tax season is officially over. This year, the CPAs at Bach, James, Mansour & Company processed more returns after the initial April 15 deadline than ever before. We also set a new October 15 record, and still have a few returns pending. Our business is growing – a good thing – but more clients are also waiting longer to file.

You may not have a choice

You may have no choice but to delay your filing. For example, K-1s, or business partnership tax forms, are being mailed later in the year. Some of our clients invest in partnerships that issue K-1s, like oil and gas exploration or low income housing.

Another reason that some clients delay their returns is so that they can determine appropriate retirement plan funding. Depending on income (salary, investment income, etc.), we help them adjust the funding level to maximize tax efficiency. We are big fans of retirement savings, and are fine with this delay.

Procrastination can cost you – literally

Many of you are probably frustrated with the whole income tax return process. There are just too many things to organize and not enough time in the day, so you put off the pain until the absolute last moment. This can actually impact your overall tax burden in several ways:

• You are more likely to make mistakes. Missing or incorrect can cause potential IRS problems.
• We won’t have enough time to review your documentation. Our thorough process takes at least 2 weeks.
• There is no margin for error. It’s tough to prepare and file your return on October 14.

Here are some tips to help you start early and better prepare for April 15, 2014:

• Start early. As everything slows down during the last couple of weeks of the year, start organizing your 2013 financial information.
• Take small bites. Do the work in digestible chunks of an hour or so, rather than doing everything at once. Set smaller milestones along the way.
• Reward yourself. Do something nice as you finish the major components of your tax returns, and treat yourself to a nice dinner after you’ve turn in your documents to us.
• Call us. We’ll help you start the planning process, and offer additional time-saving ideas.

Remember that you still have to pay taxes on April 15!

Regardless of when you actually file your tax returns, if you owe money you still need to write Uncle Sam a check by April 15. If not you will be penalized for late payment. Based on your final tax returns, you may end up getting some of that money back, or still owe a little.

Now is the perfect time to contact one of the CPAs at Bach, James, Mansour and company to start your 2013/2014 tax planning and understand how the new tax laws will impact your tax filing.

Part 2 of this series will review the importance of making year-end projections before year-end.

Neal Bach