Beware the Ides of…April?

Aw, March 15th.  If you’re a history buff or fan of classical literature, you might know it better as the Ides of March, the term used by the ancient Romans for this day.  It’s most notable as the day that Julius Caesar was betrayed by Brutus, an event that’s been dramatized by William Shakespeare, among many others.

If you’re a modern American, though, the Ides of March hold another source of dread: in one month, it will be April 15th, better known as Tax Day!  Yes, even as you read this, the clock is slowly counting down toward the time when you must have your taxes filed, an event I’m sure is at the top of everyone’s list of fun activities.

ET Tu, IRS?
ET Tu, IRS?

With this looming deadline in mind, I thought it would be a good time to cover some of the does and don’ts when it comes to doing your taxes.  Knowing how diligent, patriotic, and devoted to America that most of my (American) readers are (to say nothing of eager to get their refunds), I imagine that most of you already have finished your returns, but for those just stopping by, here are a few pieces of advice:

DO make sure you have all the needed tax information: In addition to the tax return itself (usually a 1040 form), you’ll need proof of all your income over the year.  You should get W-2 forms from everywhere that you worked, indicating how much you earned during the previous tax year, 1099 forms for any income from dividends, interest payments or similar sources, and 1120 forms if you are running a corporation.  All told, you can end up with quite a collection of tax forms, and it’s important that you ensure you have them all.  Most should have been sent out around the end of January, but if you didn’t get one or more of the forms you need, be sure to contact the company involved to have them issued to you.

DON’T throw away your receipts: If you are planning to itemize your deductions rather than taking the standard deduction (a good plan if you have a large amount of business related expenses or could otherwise benefit from itemizing), you’ll need to hold onto your receipts in case your return is audited.  The IRS Guidelines provide a number of situations, ranging from 2 to 7 years; keeping them for three years, minimum, should be your goal.

DO try to fill out your taxes on your own: Besides allowing you to save some money compared to going to a professional tax preparer, filling out your taxes yourself will help you get a better understanding of the tax code and where you can find deductions or gain other tax advantages in the future.  If you find yourself completely overwhelmed or have a complex tax situation, you might find a tax preparation software program helpful.  (I had a good experience with the H&R Block software this year, but there are other services like TurboTax available.)

DON’T lie on your tax return: This should go without saying, but I’ll say it anyway: don’t lie on your tax return!  While you might not be caught, there are a number of weapons the IRS has at its disposal to ensure that you don’t try to cheat the tax man (or that if you DO cheat, you are amply punished).  When in doubt, remember: the IRS got Al Capone, and they can get you, too.

DO get help if you need it: There’s no doubt about, it can be tough to file your taxes.  So much so that an entire industry has arisen just to provide you and other woebegone taxpayers with help and assistance.  If you find yourself completely overwhelmed, going to visit a tax preparation specialist might be the key to getting your taxes complete while not ripping out all your hair.  One caveat: not all tax preparation services are equal, and you should check about your preparer’s qualifications to ensure that he or she knows what they’re doing, and also see what support and help the preparer (or the company they work for) will offer in the event of an audit.  Speaking of which…

DON’T panic if you get audited: Your first inclination if you receive a summons for an audit might be to flee to a non-extradition country in the Caribbean, but it doesn’t have to be that way.  If you are prepared, careful, and didn’t try to commit actual fraud on your return (remember that tip about not lying?), you can make it out of an audit alright.  Yes, you’ll likely owe more money, but it’s not the end of the world.  Just take a deep breath, get through the audit, and then relax.

There you have it, plenty of good tips for preparing for the Ides of April* and the ensuing tax season.  Good luck, and here’s hoping I don’t read about you ‘evading taxes’ anytime in the near future!

(*I suppose that technically, the Ides of April fall on April 13th, two days before taxes are due, and not April 15th as I first thought.  But, as I already had the name of this article picked out, I’m inclined to leave it as it is.  Besides, if you haven’t started your taxes by the time April 13th rolls around, you’re going to be dreading the Ides of April, anyway…)

2 Responses to Beware the Ides of…April?

  1. Solid post. I especially like the point about doing your own taxes.
    .-= Matt @ Dividend Monk´s last blog ..Coca Cola (KO) Dividend Stock Analysis 2010 =-.

    • @Matt: I’m a firm believer in doing (or at least attempting to do) your own taxes. Not only do you get to learn more about the process of filing taxes itself, but you’ll have a better idea of what to do next year to end up paying less.

Leave a reply

CommentLuv badge