Tax Return Corrections and Tips for next Tax Year
While the freshness of the New Year can still be felt in the air, let’s start talking about preparing for the upcoming tax season. Dave and Julia know that preparedness always helps them in improving their performance for any tasks and makes their lives easier.
So the first thing to do, is to take out last year’s tax return and review it. Usually, taxpayers don’t change much from year to year and the same kind of expenses are incurred every year.
Next, they start organizing their expense receipts by placing different receipts in an envelope by category of expense, i.e. mortgage interest, real estate taxes, charitable contributions, W-2s, interest income, dividend income, and so on. Putting receipts in envelopes by category helps in visually categorizing your expenses, hence adding to your preparedness for the upcoming tax season.
You may need copies of your filed tax returns for many reasons. For example, they can help you prepare future tax returns. You’ll need them if you have to amend a prior year tax return, or apply for a loan to buy a home or to start a business. You may also need them if you apply for student aid. If you can’t find your copies, you can request a copy of previous tax return transcripts or actual copies of returns from the IRS. There is a fee the IRS charges for copies of actual tax returns (but not transcripts), check the IRS website www.irs.gov or contact your tax professional.
Here’s how to get your federal tax return information from the IRS:
• A tax return transcript shows most line items from the tax return that you filed. It also includes items from any accompanying forms and schedules that you filed. It doesn’t reflect any changes you or the IRS made, after you filed your original return.
• A tax account transcript includes your marital status, the type of return you filed, your adjusted gross income and taxable income. It does include any changes that you or the IRS made to your tax return, after you filed it.
• You can get them by phone, mail or fax within five to 10 days from the time IRS receives your request.
– To request copies of your transcripts, go to www.IRS.gov and use the Get Transcript tool.
– To order by phone, call 800-908-9946 and follow the prompts. You can also request your transcript using your smartphone with the IRS2Go mobile phone app.
– To request an individual tax return transcript by mail or fax, complete Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses and individuals who need a tax account transcript should use Form 4506-T, Request for Transcript of Tax Return.
• If you need a copy of your filed and processed tax return, it will cost a fee for each tax year. You should complete Form 4506, Request for Copy of Tax Return, to make the request. Mail it to the IRS address listed on the form for your area. Copies are generally available for the current year and past six years. You should allow 75 days for delivery.
• If you live in a federally declared disaster area, you can get a free copy of your tax return. Visit www.IRS.gov for more disaster relief information.
After you have copies of last year’s return or transcript, contact your accountant or tax preparer as soon as possible and schedule an appointment. Most accountants pre-schedule their appointments and send letters out the first or second week of January. If you wait until the last minute (late March or early April), you will end up paying more to have your tax return prepared. Tax preparers put a premium on the stress taxpayers place on them, by waiting until the last minute. So Dave and Julia, did not make the mistake of waiting till the end, instead contacted their accountant at the earliest time in January.
Finally, if you have changed your name or marital status, let the Social Security Administration (SSA) know about the change, as well as the IRS. Because, if the name on the tax return does not agree with the Social Security number, both at the IRS and at the SSA, the refund for your personal tax return may be delayed, if not disallowed. This can cost a great deal of time, money and stress. The average taxpayer will lose about $1,000 in tax savings for each person that does not have a matching name and social security number. This also includes your children.
Here are some points to remember:
Examine a copy of your last year’s tax return or transcript to review expenses
Categorize expenses with envelopes (i.e. income, mortgage expense, real estate taxes, auto tags, charitable contributions, medical expenses, etc.)
Make sure you schedule your tax appointment early
Verify with the IRS and SSA that names and social security numbers match (if name has changed).
Call today, don’t delay! See how this affects you. We can be reached at 602-264-9331 and on all social media under azmoneyguy.
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Tax and Financial Advice from an expert
Mr. Hockensmith has been a guest newscaster for national and local TV stations in Phoenix since 1995, broadcasting financial and tax topics to the general pubic. He has written tax and accounting articles for both national and local newspapers and professional journals. He has been a public speaker nationally and locally on tax, accounting, financial planning and economics since 1992. He was a Disaster Reservist at the Federal Emergency Management Agency, for many years after his military service. He served as a Colonel with the US Army, retiring from military service after 36 years in 2008. Early in his accounting career, he was a Accountant and Consultant with Arthur Andersen CPA’s and Ernst & Young CPA’s.
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