Tuesday, May 22, 2018
Consumer

Tips for tax season

You have 30 days left to file your taxes. The deadline is April 17. • Leafing through a year's worth of financial documents may not be your idea of a good time, but it's best not to wait much longer. • But should you use an accountant or file on your own? What documents do you need and should you ask for an extension? • Here are some tips that can help you save and keep you out of trouble with the IRS this year.

Decide who is doing the calculating

You can use an accountant or file your taxes on your own; it really depends on the complexity of your financial portfolio.

If you own a business, it's better to hire an accountant, said Scott Robey, a partner with Pender, Newkirk & Co. in Tampa. But if your individual taxes are relatively simple, a tax preparation software like TurboTax or those offered by H&R Block can help you file on your own.

If you earned $57,000 or less last year, you can use the IRS software program Free File for free and file your return electronically. If you want to file on your own without the help of software, electronic versions of the tax forms are also available on the IRS website, www.irs.gov.

Hiring accountants can be useful because they know more about possible deductions or tax credits than the average person. It's more expensive to hire an accountant, who can charge a flat fee or by the hour, than to buy $75 software, but they could also help you save more money, Robey said.

"The laws change pretty much every year, and if you're not in the profession where that's your job to keep up with it, it's hard to keep track of where you are," he said.

Larry Heinkel, a tax and finance attorney in St. Petersburg, said it is usually easy for individuals to file on their own, but business owners can run into some trouble if they don't know what they are doing. For instance, he usually recommends against filing a home office claim. The savings are small, and it is usually a red flag for an audit.

"Business owners should have a good accountant so that they don't have to hire me," Heinkel said.

Get organized

Whether you are filing your taxes on your own or using an accountant, keeping your information in order is key. Keep any tax-related documents, including W-2 forms, mortgage statements, medical expense and tuition records — even safety deposit box receipts. All of these are deductible, and if you keep them in order, the whole filing process will be easier and faster.

Also, it's important to keep your tax returns from several years back in case of an audit.

If your documents are scattered all over your home or office, it's time to start getting them in order.

File on time

The deadline to file has been extended to April 17 this year, so no excuses!

Tax professionals warn that while it is easy to request an extension, many people don't realize that it is not an extension to make payments, just an extension to file the tax return. Make sure you file and pay on time, otherwise the IRS will charge you late fees.

Heinkel said people should file even if they don't have the money. The fees for filing late can be steep, up to 25 percent of what you owe, and few people know that large tax debts can result in bankruptcy.

And the Social Security Administration as well as mortgage lenders and brokers rely on information from filed tax returns to decide whether they want to write you a check, so keep on top of your taxes.

Do your research

Know what breaks you qualify for. Read up on them on the IRS website.

When you know what breaks you qualify for (tuition write-offs or deductions for charitable donations, for example), you can provide your accountant with the right information or know what to look for when filing for yourself.

Don't be afraid to ask questions. Look up information online or call a tax professional and ask about deductions and credits.

TurboTax offers a free service for customers who want to speak directly with a tax professional, and you can call or walk into the local IRS office, where representatives will answer questions.

The IRS has local offices in both Tampa and St. Petersburg.

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