Tax Tips: File now, breathe later
Certified Public Accountants speak into the importance of the October 16th tax filing extension deadline.
Intense, fast-paced, and diligent are the words that best describe the tax hallway at PYA P.C. in mid-October. Just a few days away from the federal October 16 tax extension deadline, every Certified Public Accountant (CPA) is dissecting spreadsheets, communicating with clients, clicking their keyboards, and determined to make the pending deadline. When dealing with matters of the Internal Revenue Service (IRS), CPAs must have high precision and an unwavering commitment to accuracy.
“This time of year, it feels a little like working triage for CPAs and other tax professionals. It is an all-hands-on-deck approach to get missing information, answer questions that remain, and ultimately get returns filed, “said Mark Brumbelow, the Managing Principal of Tax Services at PYA.
Meeting the October 16 tax deadline, which is typically the extended deadline for filing federal income tax returns in the United States, is important for several reasons:
Avoid Penalties and Interest
Failing to meet the tax deadline can result in penalties and interest charges. The IRS imposes penalties for late filing and late payment of taxes owed. These penalties can add up quickly and significantly increase your overall tax liability.
“Penalties can be severe, particularly if some portion of the calculated tax liability remains unpaid. Penalties exist for underpayment, late payment, and late filings. These are often triggered if the extension payment was insufficient,” Brumbelow said.
Maintain Good Standing with Tax Authorities
Consistently meeting your tax obligations demonstrates your willingness to comply with tax laws. It helps you maintain a good relationship with tax authorities, reducing the likelihood of audits or other investigations.
“Contrary to popular opinion, the IRS is trying to be more taxpayer-friendly,” Brumbelow said. “However, most of the processes the IRS has put in place are founded on a clean filing history. As soon as a taxpayer has late filings on their compliance résumé, many of those benefits are no longer available.”
Preserve Your Refund
If you’re entitled to a tax refund, filing by the deadline ensures you receive your refund as soon as possible. Delaying your return filing means delaying the receipt of any potential refund owed to you.
Avoid Legal Consequences
In some cases, failure to meet tax deadlines can result in more severe consequences, such as legal actions or criminal charges. While these outcomes are less common for individual taxpayers, they can occur in cases of tax evasion or fraud.
“It is always good to have a CPA help with your accounting and taxes because it allows taxpayers the opportunity to run their businesses, spend time with their families, and do other valuable things with their time,” Brumbelow said. “CPAs can also help identify (and possibly mitigate) risk and find opportunities for better outcomes.”
Prevent Unnecessary Stress
Procrastinating on your tax return can lead to last-minute rushes and added stress. Gathering all the necessary documents, completing forms accurately, and addressing potential issues well before the deadline can alleviate the stress associated with tax season.
Plan Your Finances
Filing your taxes on time allows you to accurately assess your financial situation for the year and plan. This information is crucial for making informed financial decisions, including budgeting, investing, and saving for retirement.
Meeting the October 16 tax deadline is essential for individuals and businesses to avoid financial penalties, maintain good standing with tax authorities, and ensure a stress-free tax season.
“Investing in a CPA is exactly that – an investment. The tax code grows more complicated, seemingly on an annual basis. Qualified CPAs, EAs, and other tax professionals can help taxpayers navigate those complexities, and the payoff takes the form of additional time for the taxpayer to focus on other aspects of their life and business as well as additional peace of mind that comes from having a partner well-versed in the issues. If your filings are simple and low-risk, and you have the time and other resources to complete them, perhaps that return on investment is not as valuable – but tax advisors can really help most taxpayers out there,” Brumbelow said.
If you need tax assistance, learn more about the services provided by PYA, the power behind teknovation.biz.
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