Happy Tax Day! You’ve probably read a ton of lists by now advising you about last minute filing tips (including mine) and how to reduce your tax bill. That’s all good stuff. But as you finish up the last minute scramble to get your taxes filed, here’s a quick list of what not to do:
- Fib on your taxes and think you’ll fix it later. Don’t cheat to get your money faster – or to avoid paying what you owe now. Lying on your return is wrong and can land you in trouble. The IRS does track patterns of tax behaviors: if they notice a pattern of bad filing behavior, you’ll eventually be flagged. In addition to slowing future refunds, causing delays in processing and potentially increasing your audit risk, you’ll also get socked with a pretty nasty tax bill. You’ll eventually have to pay what you owe plus penalty and interest. Even worse: willful tax evasion or tax fraud can result in criminal charges.
- Call your tax professional for anything other than an extension. Lean in closely for this one and listen very carefully. Your tax professional may be awesome. Your tax professional may love you as a client. Your tax professional may be thrilled to have your business. But – and this is important – your tax professional doesn’t want to hear from you today. Really. Unless you’re filing for an extension, put the phone down. It isn’t likely that you can bring in your tax information for the first time on Tax Day and expect to file a reasonably correct tax return on time: all you can do at this point in most circumstances is file for extension. And if you’ve found a mistake on your return? You’ll want to amend using good ol’ form 1040X… next week. Not today. It’s been a long, busy season. Cut your tax professional a break.
- Spend your refund when it’s not in your pocket. If your tax return says that Uncle Sam owes you money – and not the other way around – the temptation is to want to spend it. Right now. And why not? It’s good news, right? But don’t rush to the web to plan that dream vacation or plop a deposit down on a brand new car until you actually have cash in your pocket. There could be a delay in processing your return or you could be subject to offset. You might have made a calculation error, overstated a deduction, or understated your income. Your refund might be held due to concerns about a duplicate Social Security number or an injured spouse claim. Most of the time, IRS gets it right. But Visa doesn’t accept “I think I’m eventually getting a tax refund” for payment. So be smart, plan ahead and don’t spend your refund in advance.
- Head out for the post office at 4:55 pm. If you’re going to have a Murphy’s Law moment, it’s bound to be on Tax Day. According to a study in the Journal of the American Medical Association, deaths from traffic accidents rise 6% on Tax Day. Combine the rush with the extra stress – and in many parts of the country, some pretty terrible weather, and you’re bound to increase your odds of something bad happening. And even assuming that something terrible doesn’t happen (and I hope that it doesn’t), you don’t want to take a chance on missing that postmark. Check the post office website for post offices with extended hours today – or better yet, leave more than a few minutes early.
- Skimp on postage. I was standing in the post office earlier today (yes, I waited until the last minute to file my extension) and watched as a woman was talked out of sending her return via certified mail because it cost about $3 more. She opted for regular mail instead. It was all I could do not to yell at her that she was making a terrible mistake. Yes, you can send your tax return via regular mail. But for federal purposes, the IRS will only accept registered or certified mail as sufficient proof of mailing. In other words, if your check and/or return gets to IRS via regular mail on time, you’re fine. But if there’s ever a question about a timely mailing, the IRS will only accept proof of mailing via registered or certified mail (or certain private delivery services – for details, click here). It’s only $3, less than the cost of a fancy Starbucks coffee. And it will give you peace of mind. Don’t be stingy.
- Call the IRS. On a routine day, the chances of the IRS actually picking up the phone are about 7 in 10. And if you are one of the lucky taxpayers to get through to IRS, you’re going to have to wait. On Tax Day, those statistics are direr. Don’t assume that you can camp out at your phone today and still meet your filing deadline. If you’re worried about timing, you need to file for an extension and figure it out later (but see #7).
- Forget to sign your return. I know the feeling. You are so glad to be done that you swoop out of the office, your tax return in hand on your way to have Tax Day done for good. Don’t be so glad to be done that you forget to sign your return. A tax return is not considered timely filed if you don’t sign it properly – and if you’re married, that means both spouses have to sign. So take a moment to look your return over and make sure that your signature is at the bottom. (For other common mistakes you can avoid, click here.)
- Assume you’ll figure it out later and then give up. I’m a big fan of extensions. I always say that it’s better to file a complete, correct return on extension than a rushed, flawed return by April 18. But. And it’s a big but. You need to have a follow-up plan. Filing for an extension gives you six months to get your information together to file your return (this year, you have until October 16, 2016). Use that six months wisely. Don’t think of an extension as another reason to procrastinate. An extension does give you some breathing room but take advantage of the time to figure how you’re going to file and, in some cases, how you’re going to pay (just keep in mind that a filing extension doesn’t extend the time to pay).
- Not pay at all. This is so simple that my young so thought of it, reminding me that “it’s bad, right?” Yes, it is. Taxes are due today and that includes your payment, too. There are lots of ways to pay your bill this year – including in cash. If you can’t pay your taxes in full, there are options available to soften the blow. But don’t just ignore it: trust me, it won’t go away.
- Start asking the tough questions now. Asking questions is a good thing. Clarifying something before you sign your return? Also a good thing. But tackling the hard stuff now? Not such a good idea. First thing this morning, my email was stuffed with queries, some of them quite sophisticated. I love answering your questions but asking the tough questions on Tax Day isn’t a good idea. Chances are, you’re frazzled. I’m fairly convinced your tax professional is, too (see again #2). If you’ve waited this long, save the tough questions. File for extension and figure out the tricky stuff later.
- Fail to take advantage of all of the cool stuff available. To ease the pain of Tax Day, many companies offer specials, deals, and promotions – but they’re only around for one day. Don’t get so wound up today that you fail to take advantage of all of those promos. This year, you can find specials on food & drink, travel, and home & office. If you’re feeling a little out of pocket, make it up with a free smoothie or trip to the spa.
- Panic. For all that we’re going to talk about Tax Day all day (and yes, I will be talking about it all day), it’s just one day. There are bigger fish to fry. There are very few things that you can do today that can’t be undone or fixed. So relax and take a few deep breaths. You’ve got this one in the bag.
