Getting Ready For 2017 Tax Returns
It’s almost tax season, and if you want to make yours as simple and easy as possible, you’ll want to get started on preparing your taxes well before the deadline. The 2017 tax season is also going to introduce some changes, so it’s important to be aware of those and plan accordingly. There are a few steps you can follow to make sure that filing your tax return this year goes smoothly.
Learn the New Filing Deadlines
While the filing deadline for taxes is the same for personal tax returns and many business tax returns, there are two notable deadline changes: business partnerships and C corporations.
Business partnership tax returns were previously due by April 15th, but legislation in 2015 changed that, and the new deadline is March 15th. If you have a business partnership tax return, don’t end up filing it late because you forgot about the deadline change. If your partnership isn’t run on a traditional calendar year, then you must send in your Form 1065 by the 15th day of the third month after your partnership’s year closes.
C corporation tax returns were previously due on March 15th, but are now due on April 15th. If your C corporation doesn’t operate on a traditional calendar year, then you should file your Form 1120 by the 15th day of the fourth month after your C corporation’s year closes.
Start Preparing Your Taxes Now
You don’t need to prepare your entire tax return right away, but you can make it easier on yourself later by getting the information that you need ready now. You may want to look at your 2015 tax return and use that to help you prepare your 2016 return. Look back on 2016 and think about any serious life changes that will have tax implications, such as buying a home or getting married.
Other items to check on your 2015 tax return include income from investments, capital gains income, tax credits and any deductions you claim that you may be able to claim again this year.
Get any documentation you’ll need for your taxes in order now so you don’t end up digging around for it last minute. That includes financial records, receipts and anything else you may need.
Prepare for Delays on Tax Refunds
If you like to file your taxes early and get your refund at the start of the year, don’t count on that going forward. The Protecting Americans from Tax Hikes Act of 2015 had a section putting into law that when a taxpayer claims the Earned Income Tax Credit or the Additional Child Tax Credit on their return, then their credit or refund won’t be issued until February 15th. Should you claim either of those credits on your tax return and file it early in the year, you’ll still need to wait until February 15th or later for your money.
This law was put into place to help the IRS reduce tax fraud and identity theft, so the additional processing time allows the organization to give tax returns claiming these credits additional scrutiny. Make sure you have the appropriate documentation if you do claim either credit.
Many Americans rely on their tax returns for a financial boost every year, as the average refund is about $3,000 and this is the largest amount that many taxpayers will get in one payment during the year. If you’re in that situation, plan ahead by putting some money aside, and understand that it may take longer to get your refund if you claimed one or both of those credits.
Hire a Professional When Necessary
It may be in your best interest to consider working with a professional accountant this tax season, particularly with the changes in filing deadlines. Hiring an accountant can help you stay on track and ensure that you don’t miss any deadlines. Accountants also have an extensive knowledge of taxes and all the deductions that may be available to you. While you may be able to handle your taxes on your own, if you don’t have that knowledge of deductions, you could end up leaving money on the table.
Another point to consider regarding whether to do your taxes on your own or hire an accountant is the amount of time it will take you to do your taxes, and how else you could be spending that time. Look at how much you make per hour and how many hours it will take you to do your taxes. It may be in your best interest financially to save yourself the trouble of doing your taxes and hire an accountant instead.
When it comes to taxes, it’s always better to start preparing them a little sooner than necessary. For the 2017 tax season, it’s also important that know about the recent changes in deadlines and refunds.