The count down has begun: Texans have have until April 15 to file their federal income tax return or file an extension on their 2012 return.
Local tax preparers remind individuals to gather their paperwork in one readily available location so that it is at their fingertips, whether they do their own returns or have someone else prepare them.
“You need to make sure to get together all your income – like 1099s and W-2 statements – and any kind of bank interest,” said Blaine Verhelle, who operates Verhelle Tax & Bookkeeping Service Inc. in Rusk. “And if you itemize, you'll need your 1098s and charitable contributions gathered together, too.”
If possible, file early, added tax accountant Glen Sampson, who operates Sampson Tax Service Inc. in Troup.
“People need to make sure they've paid any estimated taxes by April 15” to avoid penalties imposed by the Internal Revenue Service, he said. “(The IRS) is really putting an emphasis on making sure that they're assessing penalties for underpayment of estimated taxes … the longer you wait, the more (fees) assessed.”
Even though tax payers have an Oct. 15 extension deadline, it comes at a high cost, Sampson said. “It starts off at about 4.5 percent per month for up to five months, and if you're in default, it can easily run up to 25 percent,” he said.
And, Verhalle pointed out, “the extension is to file (a return), not pay what is due.”
“You still have to pay by April 15 if you owe money,” he said.
Individuals who plan to file their own forms can go to the IRS.gov website for forms, instructions and advice, Verhelle said.
“You can pull down any kind of instruction or form they need … they can even get their estimated tax payments,” he said.
“Anything you need, you can get on this site.”
Added Sampson, “the IRS has a place where if (income) is under $50,000, someone can go there to file their return.”
Unless an individual is planning to file on paper and mail their tax return to the IRS, all filing is now done online.
“A couple of years ago, the IRS required all tax returns to be electronically filed, although last year was the first year people could pay by credit card,” Verhelle said.
Sampson's business also provides a link to file online at http://prep.1040.com/sampsontaxserviceinc/, which “guides you through each section of your tax return (with) help available throughout the process,” the site states.
Most tax-payers, however, prefer to meet with a preparer – “they like the face-to-face because they can also get free advice,” Sampson said.
Both men said their clients, for the most part, file their returns before the April 15 deadline.
Quick turn-around on payment of refund may be the reason why people like online filing.
“If a person has a bank account, that refund can be back to him or her within eight days, while checks have been taking about three weeks,” Sampson said.
“People are interested in getting a refund back – the faster, the better.”
Preparing your tax return will be easier if the records you need are organized and readily available:
* Proof of identification
* Social Security numbers for you, your spouse and dependents
* Birth dates for you, your spouse and dependents
* Wages and earnings statements: Forms W-2, W-2G, 1099-R, etc.
* Interest and dividends statements from banks, brokerages, etc.
* A copy of last year's tax return
* Bank routing and account numbers
* The amount you paid for childcare and the childcare provider's tax identification number
* Receipts for charitable donations