Today might not feel like a red-letter day in the tax world but it’s actually pretty important. You see, today is the day that you want to call your tax professional – and here are five reasons why:
- Corporate extensions are over but individual returns on extension are due in a little over three weeks. Individuals who timely requested an extension – about 10 million taxpayers – have until October 15, 2012, to file their 2011 federal income tax returns. Don’t wait until the last minute: the whole point of getting that extension was so that your return wouldn’t be sloppy, right?
- Estimated tax payments were due earlier this week. September 17, 2012, to be exact. The whole point of making estimated payments is not to owe too much at tax time (and end up paying a nasty penalty), especially for those folks who rely on income not subject to withholding (generally, independent contractors and those that are partners in an LLC, LLP or LP or members of S corporations). Now that most of the year has flown by, it’s a good chance to run those numbers to make sure that you’re withholding enough – or too much. You don’t want to err on the side of paying in too much, either. If 2011 wasn’t as banner a year as 2010, you might be paying the IRS too much. A tax pro can help you sort this out in advance so that April 2013 isn’t quite so painful.
- The Tax Code is constantly changing. Credits expire, deductions shrink and rates can fluctuate from year to year. For planning purposes, it’s best to know what to expect ahead of time. If you’re trying to plan, knowing when tax breaks for hiring certain employees or making energy-efficient improvements to your house expire is useful. A good tax professional can point you in the right direction (with the caveat that Congress is still wont to undo it all at any second).
- End of the year planning opportunities are just around the corner. Many taxpayers start thinking about their options in January but many tax savings plans have to be completed in December in order to count for that tax year. If you want to save tax dollars for the tax year 2012, in most instances (retirement plan contributions being an exception), you have to act before December 31, 2012 – including the really big ones like getting married. And this doesn’t just apply to individual income taxes: planning for estate and gift taxes, as well as most corporate and partnership taxes, is focused on the same year-end: December 31. If you have moves to make by year-end, get things going now – and get some help.
- Finally, business slows down a little (just a little) at the end of the year for many tax professionals. This might be the best time to get some personal attention if there’s something you’ve been concerned about. Maybe your bookkeeping isn’t terrific and you want to change software packages… or maybe the pencil on your old green ledgers is too hard to read these days and you’re thinking about diving in and trying online accounting. Maybe you’re thinking about contributing to an IRA for your spouse or a 529 savings plan for the kiddos. Maybe you just want to find a new preparer. The very best time to do those things is January 1. But that’s the worst time to start thinking about it – just after the holidays can be hectic. Ask now. Get the facts. Organize. Fill out the papers. Resolve to start fresh.
I know what you’re thinking… you’ve still got time. It doesn’t have to be today. Don’t think that way. Be proactive – and considerate. Many tax pros will start gearing up next week to get those individual returns out. That flurry of activity will continue through October 15. And then they’ll want to breathe. And then it’s November and nobody wants to take a business call over turkey dinner. And then it’s Christmas and Hanukkah (there’s shopping to be done!) – and before you know it, the year is gone. Trust me. It happens in a flash.
To badly paraphrase Miss Carla Rae Jepsen:
And you should know that.. Call your tax pro, maybe.
