Tax SeasonWe live in a world of seasons. Follow sports? You’re probably aware baseball season is just underway. Hungry? You’ll likely find some seasonal menu offerings at a local restaurant. Staying in tonight and relaxing? Perfect, because season five of your favorite TV show is now on Netflix.

Just recently, in fact, I read an article warning Chicago area pet owners about the growing problem of hostile and territorial wild coyotes in the city during mating season.Yikes.

Much of what we do is marked by time and activities tied to seasons, and as with the coyote example, it’s not all enjoyable (well, I suppose it is for the amorous coyotes, but not so much for "Larry," the family Labradoodle who decides to interfere). And then there’s the dreaded tax season!

Tax season is something many people (myself included) find less than appealing. But for those in the legal workforce, it’s a necessity. It can be scary and riddled with anxiety, not unlike cold and flu season … or perhaps any season of “The Walking Dead.” But the good news is there are ways to limit all this — both the horror of paying taxes and the pitfalls you could encounter before and after Tax Day.

Procrastination Nation

If you’re the type of person who tends to procrastinate, particularly when it comes to preparing your taxes, you’re not alone. I’m often in the same boat — avoiding the inevitable, assuming I’ll owe money … channeling my inner three-year-old with whines of “But I don’t wanna!” In case you hadn’t heard, we all have a few extra days this year to stew in our procrastination. The Internal Revenue Service reminds us Tax Day 2017 falls on Tuesday, April 18! 2

And this year, there are some new factors that may be contributing to Tax Day procrastination. Bloomberg.com reports filings of tax returns with the IRS were down by as much as 8.5% under 2016 at the same point in mid-March. Why? The reasons range from worries about the current political climate, to delayed refunds, confusion over new rules, and yes, good old procrastination.3

Scam City

Around this time in 2016, I received two calls from a recorded voice telling me the IRS was suing me for unpaid taxes and that I must immediately address the matter. Right away it seemed fishy and a quick web search confirmed my suspicions of a scam. I also learned that scams like this are rapidly increasing each year, costing America’s tax payers hundreds of millions of dollars.

Looking into this year’s hot scams, I found a really good piece on forbes.com that not only addressed the fake lawsuit scam, but pointed to several other common schemes used to defraud the IRS and/or the public during tax season.4 The IRS refers to it all as its “Dirty Dozen” list of tax scams, which include phishing emails, phony returns filed on one’s behalf, falsified income, overstated deductions and a whole lot more. The lesson? Don’t assume something is legit because the topic fits the season!

Mistakes Mean Money

When you do get around to filing your federal and state taxes this year (or next year if you are the proactive type), it’s important to be aware of mistakes people sometimes make when filing. Case in point: My niece decided to get a jump on her taxes early this year and met with her tax guy in February. Great idea, right? In theory, sure. But it turns out she either didn’t correctly fill out her Form W-4 when she was hired, didn’t submit it or didn’t receive it. To be fair, she’s young and this is her second job ever, but she definitely learned the hard way. The result? She went in with a “how much money will I get back?” mindset and left asking, “Wait … I owe how much?!”

For most, my niece’s example may be on the more extreme side of making tax mistakes, however unintentional. And there are certainly more subtle errors one can make come tax season. In fact, an article on oregonlive.com addresses 11 simple mistakes people make at tax time. Whether it’s a math error, an incorrect address, failure to sign and date all forms, or something else basic — it can all lead to delayed refunds.5

By the way, at times, tax issues arise that are not so much mistakes as they are questionable decisions. For example, a friend of mine was unemployed for the better part of a year. When he filed for unemployment he had the option of paying the taxes on his weekly claims in real time or waiting until Tax Day. He took the latter route, telling me, “I need that extra money to live on now! I’ll worry about taxes later.” When he ended up owing thousands of dollars in April, he regretted the decision.

Tax Season “Take Actions”

So, we’ve covered things to avoid during tax season, but since no post on Tax Day advice would be complete without some concrete, helpful tips on what to do, we’ll provide a few of the better ones:

  • Are you among those Tax Day procrastinators we wrote about? Lifehacker.com has a unique procrastinator’s guide for tax season that includes information on late penalties, filing extensions, payment options and more.6
  • Remember my niece and her W-4 failure? Maybe she could have used the advice on determining withholdings in this previous Grantham post, which also includes tips on estate and gift taxes, pre-tax deductions and charitable donations.
  • Want a quick overview of advice to ensure the best tax refund possible? You might check out this article from moneytips.com.7

There’s a Degree for That

Perhaps you already have a great grasp of how to ensure timely, mistake-free (and hopefully profitable) tax filings each year. If so, you could be the ideal person to help others get to that level … and there’s a degree for that! Grantham’s Bachelor of Science in Accounting program teaches students bookkeeping, tax preparation and financial statement analysis. And the University’s Bachelor of Business Administration in Financial Planning covers tax, retirement and estate planning, among other disciplines.

Remember, tax season may not be the most pleasant of the seasons we experience throughout the year, but dealing with it is inevitable. As long as you’re prepared, on the lookout for scams and aware of the crucial “dos and don’ts,” you should be just fine.

Ryan KaneAbout Ryan Kane

Ryan Kane, communications specialist, is on Grantham University's editorial board. He earned his bachelor's degree from the University of Kansas. He has served in a variety of journalistic, writing and editing roles in a number of industries ... and he has first-hand experience with tax season procrastination.  

http://chicagotonight.wttw.com/2016/02/05/urban-coyotes-pose-threat-pets-during-mating-season
https://www.irs.gov/uac/2017-tax-filing-season-begins-jan-23-for-nations-taxpayers-with-tax-returns-due-april-18
https://www.bloomberg.com/news/articles/2017-03-10/americans-aren-t-filing-their-taxes-this-year
https://www.forbes.com/sites/dianahembree/2017/03/20/fraud-alert-watch-out-for-these-tax-season-scams
http://www.oregonlive.com/business/index.ssf/2017/03/2017_tax_filing_mistakes_that.html
http://twocents.lifehacker.com/the-procrastinator-s-guide-to-filing-your-taxes-at-the-1769240898
http://www.wfmynews2.com/money/6-tips-for-getting-the-biggest-tax-refund/411031102

 

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