Here at Phoenix Tax Consultants, we believe that the earlier you file your taxes, the better. However, do certain situations ever warrant waiting to file your taxes? In this article, we’ll explain the best time to file your tax return depending on your situation, and if it’s ever a good idea to wait. With these tips, and tax consulting help from our team, you’ll get your taxes filed quickly, accurately, and on time!
Get your refund as soon as possible
If you know you’ll be getting a refund, the best time to file is as soon as you have all of the paperwork you need to file. Just avoid filing a paper return if you want your refund sooner rather than later. Paper returns can take up to eight weeks to process, so you’ll have to wait up to two months before you can get your refund. However, electronically filed returns typically get processed in as little as 21 days!
If you’re really interested in speeding up the process, we recommend choosing direct deposit as well. Otherwise, even though your return was processed quickly, you’ll be waiting for your refund check to make its way to your mailbox.
Your tax situation is uncomplicated
Although taxes are never really simple, some people have less complicated situations than others. If this is the case for you, there’s no reason for you to wait to file once you have all the necessary documents. You won’t have a larger refund or a change in your return simply because you wait to file, so why procrastinate?
Even if you know you’ll owe money, you should file as soon as you can. Filing before the deadline doesn’t mean that you have to pay before the deadline. Filing early will let you know how much you need to pay so you can prepare to pay by the deadline instead of being surprised by how much you owe just a week before Tax Day because you waited to file.
Prevent identity theft
As we mentioned in our previous blog, identity theft is an unfortunately common issue for taxpayers who will be getting refunds. If you want to do your best to stop a thief from claiming your refund before you can, file as soon as you can. Thieves usually file returns in late January because most people don’t file until long after that. Of course, you can’t file without all the proper documentation, but once you have everything, don’t wait! Once you’ve filed your return, any other returns filed in your name will be rejected by the IRS, successfully preventing attempts at theft.
Avoid late penalties
If your tax return doesn’t get to the IRS until after the April deadline, you’ll get a late-filing penalty that could be as much as 5% of your taxes due for every month or partial month that your return was late, with a maximum of 25%. If for some reason you won’t make the deadline, make sure to plan ahead and request an extension before the deadline.
Something important to remember is that a filing extension does not mean that you’ll get an extension for paying what you owe. Even with an extension, you may owe interest in addition to a late payment penalty. Late payment penalties are usually 0.5% of the amount owed for each month the payment is late up to a maximum of 25%.
Filing early will avoid any penalties while allowing you to take time to plan and budget for any taxes you owe.
You don’t have all your documents
Something we’ve mentioned in each of these sections is that you should file as soon as you have all the necessary documents. In addition to this, you need to verify that all the information included in these documents is accurate.
Most of the time, the documents you receive will be accurate, but mistakes aren’t unheard of, so it’s important to check your documents once you receive them. If a mistake is made and you are sent updated paperwork after you’ve filed your tax return, you’ll have to file an amendment, which can prolong processing time.
Although earlier is better once you’ve gotten all of your documents, it’s important to postpone filing if you find a mistake or are waiting on a document.
Your tax return will be complicated
Waiting to file your tax return may be a good idea if your tax situation is complex. However, you may still want to being the process of filing early, just take some time to review your return before filing. Taking this extra time to review your return will allow you to make necessary adjustments or fix mistakes to avoid filing an amendment. Sometimes taking extra time to correctly prepare your return is the best plan of action.
Need help with taxes? Get tax consulting from Phoenix Tax Consultants!
As you can see, there aren’t very many situations in which waiting to file your taxes is a good idea. In most cases, you’ll get the most benefit from filing as early as you can. However, if you need help filing your taxes on time, get tax consulting help right here at Phoenix Tax Consultants.
When you let us handle your taxes, you can be sure that your tax preparation will be completed quickly and accurately. We also pride ourselves on our customer service, which is why we do our best to provide prompt replies to your questions, value-added planning, tax-saving recommendations, and more. We also offer virtual and in-person filing options, so filing your taxes is always convenient and easy for you.
With more than 30 years of local tax preparation, tax planning, and audit experience, why would you trust anyone else with your tax needs? Schedule an appointment today!
33% of Americans admit that they wait until the last minute to file their taxes. So if this is typically your strategy, you’re not alone! However, just because it’s common, does not mean that it’s the best strategy. Any tax consultant will tell you that filing as early as you can is the best way to handle taxes. In this article, we’ll explain the benefits of filing your taxes early so you know exactly whysooner is better than later.
1. Get your tax refund sooner
You probably don’t need a tax consultant to know that a great reason to file your taxes early is to get your refund sooner.
There are a lot of reasons why filing early means that you’ll get your refund early. Obviously, the earlier you file, the earlier your taxes will be processed and if you’re owed a refund, you’ll get it sooner. However, filing early may also get your refund to you sooner by avoiding potential processing delays that may be caused by filing at the last minute (as many other people do).
If you’re interested in getting your refund as soon as possible, keep these three things in mind:
File as early as you can.
File electronically – having to manually go through physical paperwork is a common cause of refund delays.
Receive your refund via direct deposit.
2. Give yourself more time to pay back what you owe
If you do end up owing taxes, you have until the filing deadline to pay these taxes back. Filing as early as you can allows you to be sure just how much money you owe, come up with a plan to pay it, and pay it back without having to use emergency funds or savings. So even if you know you’re going to have a tax bill instead of a refund, that’s no excuse for waiting to file!
3. Protect your refund
We all do everything we can to protect our private information, including social security numbers, but in this day and age, this information can get into the wrong hands even when you take precautions. If an identity thief gets access to your social security number, they can file a tax return in your name and take your refund.
It’s very common for identity thieves to do this, but filing early can prevent it. The earlier you file, the less time a thief has to file a tax return in your name, ensuring that you’ll get the refund you’re entitled to. You will be able to work with the IRS to clear up any issue if a thief does file a return for you, but it can take months.
Reduce your risk of tax refund fraud by filing early!
4. Get important financial information sooner
You may need financial information provided by preparing a tax return. This is the case for college students applying for financial aid as well as for homebuyers who need to show a completed tax return to prove their household income. In these situations, the sooner you can get this information, the better, which makes filing early particularly important.
5. Reduce your tax time stress
Even when you’re not down to the wire to file your tax return, tax season is understandably stressful for most of us!
The best way to lessen this stress? Just get your taxes done and out of the way as soon as you can. Procrastinating will just make you think and worry about it more, leading to increased stress.
Stress can also cause mistakes. Not everyone performs at their best when they’re under pressure. It can make you forget important documents that could potentially lead to issues with your tax return. The rush of filing close to the deadline may also mean that you could miss out on tax deductions or credits that you’re eligible for, just because you didn’t give yourself time to calmly sort out your tax documents.
Finally, filing early will reduce your stress by ensuring that you’ll have plenty of time to schedule an appointment with a tax consultant. The closer we get to Tax Day, the more people will be scheduling appointments, meaning that it may be harder for you to get one. Avoid all of this by filing early and having the peace of mind that finishing a big task provides!
File early and let the experts at Phoenix Tax Consultants do the hard work for you!
Taxes can be complicated and stressful, but they don’t have to be.
When you let an expert tax consultant from the Phoenix Tax Consultants team handle your taxes, you can be sure that your tax preparation will be completed quickly and accurately. We also pride ourselves on our customer service, which is why we do our best to provide prompt replies to your questions, value-added planning, tax-saving recommendations, and more.
We don’t just process – we plan. At Tax Tacklers, we are disrupting the way people do their taxes. The best part is that with our virtual and in-person filing options, you can do your taxes from anywhere!
With more than 30 years of local tax preparation, tax planning, and audit experience, why would you trust anyone else with your tax preparation? Schedule an appointment today!
Once you are done filing your tax returns, what should you do with all the receipts, forms, and other paperwork? Should you just shred them and reduce the clutter or keep them?
The IRS recommends that you should keep any documents that prove how much income you have earned and any other documents that support deductions or credits you claim. However, if you will get one record (like your W-2) at the end of the year that summarizes all the crucial information, you don’t have to worry about keeping every single document.
The IRS has 3 years after the due date of your tax return or when you filed if later to trigger an audit, so it’s advised to keep the records until that time has passed.
But, in a few cases, you should keep the records even longer. For example, cost basis informations for assets you may sell later.
Pro Tip: You should keep your W-2 forms around for non-tax purposes as well. For example, if you ever need to apply for Social Security Benefits, you will need your W-2 to verify your income.
Documents that should be kept for 1 year
You should keep your pay slips at least until you can check them against your W-2 forms. If all the figures match, feel free to get rid of the stubs. The same goes for your monthly brokerage statements; only shred them once you have matched them up with your 1099s and year-end statements.
Documents that should be kept for 3 years
Any documents that support your income, credits, and deductions claimed on your return should be maintained for at least 3 years after the tax-filing deadline has passed. This 3-year rule also applies to the following records:
Form 1098, if you deducted mortgage interest
Form 1099s that show your capital gains, income, interest, and dividends on investments
Form W-2s that report your income
Documents showing your contributions to a tax-deductible retirement-savings account, such as an IRA
Receipts and/or cancelled checks for charitable contributions
Records related to the property you own or your investments even after you sell
Investing records showing your transactions for mutual funds, bonds, stocks, and other investment purchases after you sell them
Keep documents related to any property you inherit or receive as a gift after you sell/dispose the property.
If you no longer itemize deductions on Schedule A due to the significant increase in the standard deduction in the beginning of 2018, you might not need to save as many records. For example, people who don’t deduct charitable contributions any longer, they don’t need to hold onto the cancelled checks or donation receipts for tax purposes.
Documents that should be kept for 6 years
If you have failed to report at least 25% of your income, the IRS has up to 6 years to initiate an audit. This is especially important for freelancers and self-employed people; you may earn business income from a variety of sources and may have overlooked some amount.
So, practice caution and keep your 1099s and other receipts of business expenses for at least 6 years.
Documents that should be kept for 10 years
Have you ever paid taxes to a foreign government? If yes, then you might be eligible to a deduction or a credit on your US tax returns (depending on what you want).
If you decided to claim a deduction in the past, you are allowed to change your mind within ten years and instead claim a credit via filing an amended return.
Also, if you previously claimed foreign tax credit, you have 10 years to correct it.
This is why it’s best to save any documents and receipts related to foreign tax payments for at least 10 years.
How to Store Your Tax Documents
There is no official, IRS-recommended way to keep your tax records; just keep them in an organized manner. Some people prefer storing their records digitally while some prefer the old-fashioned paper records.
Consider organizing your documents first by year, and then by category (like income forms and bank statements). If you are going the digital route, just take pictures or scan the documents and store them anywhere you want (in a Dropbox or iCloud).
Phoenix Tax Consultants LLC has over 30 years of local tax preparation, tax planning, and audit experience. Don't trust your return to anyone, go with the experts!
Last Updated: February 24, 2023 by Tax Tacklers · Leave a Comment
When is the Best Time to File My Tax Return?
Here at Phoenix Tax Consultants, we believe that the earlier you file your taxes, the better. However, do certain situations ever warrant waiting to file your taxes? In this article, we’ll explain the best time to file your tax return depending on your situation, and if it’s ever a good idea to wait. With these tips, and tax consulting help from our team, you’ll get your taxes filed quickly, accurately, and on time!
Get your refund as soon as possible
If you know you’ll be getting a refund, the best time to file is as soon as you have all of the paperwork you need to file. Just avoid filing a paper return if you want your refund sooner rather than later. Paper returns can take up to eight weeks to process, so you’ll have to wait up to two months before you can get your refund. However, electronically filed returns typically get processed in as little as 21 days!
If you’re really interested in speeding up the process, we recommend choosing direct deposit as well. Otherwise, even though your return was processed quickly, you’ll be waiting for your refund check to make its way to your mailbox.
Your tax situation is uncomplicated
Although taxes are never really simple, some people have less complicated situations than others. If this is the case for you, there’s no reason for you to wait to file once you have all the necessary documents. You won’t have a larger refund or a change in your return simply because you wait to file, so why procrastinate?
Even if you know you’ll owe money, you should file as soon as you can. Filing before the deadline doesn’t mean that you have to pay before the deadline. Filing early will let you know how much you need to pay so you can prepare to pay by the deadline instead of being surprised by how much you owe just a week before Tax Day because you waited to file.
Prevent identity theft
As we mentioned in our previous blog, identity theft is an unfortunately common issue for taxpayers who will be getting refunds. If you want to do your best to stop a thief from claiming your refund before you can, file as soon as you can. Thieves usually file returns in late January because most people don’t file until long after that. Of course, you can’t file without all the proper documentation, but once you have everything, don’t wait! Once you’ve filed your return, any other returns filed in your name will be rejected by the IRS, successfully preventing attempts at theft.
Avoid late penalties
If your tax return doesn’t get to the IRS until after the April deadline, you’ll get a late-filing penalty that could be as much as 5% of your taxes due for every month or partial month that your return was late, with a maximum of 25%. If for some reason you won’t make the deadline, make sure to plan ahead and request an extension before the deadline.
Something important to remember is that a filing extension does not mean that you’ll get an extension for paying what you owe. Even with an extension, you may owe interest in addition to a late payment penalty. Late payment penalties are usually 0.5% of the amount owed for each month the payment is late up to a maximum of 25%.
Filing early will avoid any penalties while allowing you to take time to plan and budget for any taxes you owe.
You don’t have all your documents
Something we’ve mentioned in each of these sections is that you should file as soon as you have all the necessary documents. In addition to this, you need to verify that all the information included in these documents is accurate.
Most of the time, the documents you receive will be accurate, but mistakes aren’t unheard of, so it’s important to check your documents once you receive them. If a mistake is made and you are sent updated paperwork after you’ve filed your tax return, you’ll have to file an amendment, which can prolong processing time.
Although earlier is better once you’ve gotten all of your documents, it’s important to postpone filing if you find a mistake or are waiting on a document.
Your tax return will be complicated
Waiting to file your tax return may be a good idea if your tax situation is complex. However, you may still want to being the process of filing early, just take some time to review your return before filing. Taking this extra time to review your return will allow you to make necessary adjustments or fix mistakes to avoid filing an amendment. Sometimes taking extra time to correctly prepare your return is the best plan of action.
Need help with taxes? Get tax consulting from Phoenix Tax Consultants!
As you can see, there aren’t very many situations in which waiting to file your taxes is a good idea. In most cases, you’ll get the most benefit from filing as early as you can. However, if you need help filing your taxes on time, get tax consulting help right here at Phoenix Tax Consultants.
When you let us handle your taxes, you can be sure that your tax preparation will be completed quickly and accurately. We also pride ourselves on our customer service, which is why we do our best to provide prompt replies to your questions, value-added planning, tax-saving recommendations, and more. We also offer virtual and in-person filing options, so filing your taxes is always convenient and easy for you.
With more than 30 years of local tax preparation, tax planning, and audit experience, why would you trust anyone else with your tax needs? Schedule an appointment today!
Last Updated: February 24, 2023 by Tax Tacklers · Leave a Comment
Featured in Suburban Life – How We Help Clients Navigate Retirement Planning
Last Updated: February 24, 2023 by Tax Tacklers · Leave a Comment
5 Benefits of Filing Your Taxes Early Straight From a Tax Consultant
33% of Americans admit that they wait until the last minute to file their taxes. So if this is typically your strategy, you’re not alone! However, just because it’s common, does not mean that it’s the best strategy. Any tax consultant will tell you that filing as early as you can is the best way to handle taxes. In this article, we’ll explain the benefits of filing your taxes early so you know exactly why sooner is better than later.
1. Get your tax refund sooner
You probably don’t need a tax consultant to know that a great reason to file your taxes early is to get your refund sooner.
There are a lot of reasons why filing early means that you’ll get your refund early. Obviously, the earlier you file, the earlier your taxes will be processed and if you’re owed a refund, you’ll get it sooner. However, filing early may also get your refund to you sooner by avoiding potential processing delays that may be caused by filing at the last minute (as many other people do).
If you’re interested in getting your refund as soon as possible, keep these three things in mind:
2. Give yourself more time to pay back what you owe
If you do end up owing taxes, you have until the filing deadline to pay these taxes back. Filing as early as you can allows you to be sure just how much money you owe, come up with a plan to pay it, and pay it back without having to use emergency funds or savings. So even if you know you’re going to have a tax bill instead of a refund, that’s no excuse for waiting to file!
3. Protect your refund
We all do everything we can to protect our private information, including social security numbers, but in this day and age, this information can get into the wrong hands even when you take precautions. If an identity thief gets access to your social security number, they can file a tax return in your name and take your refund.
It’s very common for identity thieves to do this, but filing early can prevent it. The earlier you file, the less time a thief has to file a tax return in your name, ensuring that you’ll get the refund you’re entitled to. You will be able to work with the IRS to clear up any issue if a thief does file a return for you, but it can take months.
Reduce your risk of tax refund fraud by filing early!
4. Get important financial information sooner
You may need financial information provided by preparing a tax return. This is the case for college students applying for financial aid as well as for homebuyers who need to show a completed tax return to prove their household income. In these situations, the sooner you can get this information, the better, which makes filing early particularly important.
5. Reduce your tax time stress
Even when you’re not down to the wire to file your tax return, tax season is understandably stressful for most of us!
The best way to lessen this stress? Just get your taxes done and out of the way as soon as you can. Procrastinating will just make you think and worry about it more, leading to increased stress.
Stress can also cause mistakes. Not everyone performs at their best when they’re under pressure. It can make you forget important documents that could potentially lead to issues with your tax return. The rush of filing close to the deadline may also mean that you could miss out on tax deductions or credits that you’re eligible for, just because you didn’t give yourself time to calmly sort out your tax documents.
Finally, filing early will reduce your stress by ensuring that you’ll have plenty of time to schedule an appointment with a tax consultant. The closer we get to Tax Day, the more people will be scheduling appointments, meaning that it may be harder for you to get one. Avoid all of this by filing early and having the peace of mind that finishing a big task provides!
File early and let the experts at Phoenix Tax Consultants do the hard work for you!
Taxes can be complicated and stressful, but they don’t have to be.
When you let an expert tax consultant from the Phoenix Tax Consultants team handle your taxes, you can be sure that your tax preparation will be completed quickly and accurately. We also pride ourselves on our customer service, which is why we do our best to provide prompt replies to your questions, value-added planning, tax-saving recommendations, and more.
We don’t just process – we plan. At Tax Tacklers, we are disrupting the way people do their taxes. The best part is that with our virtual and in-person filing options, you can do your taxes from anywhere!
With more than 30 years of local tax preparation, tax planning, and audit experience, why would you trust anyone else with your tax preparation? Schedule an appointment today!
Posted: February 22, 2022 by Tax Consultant · Leave a Comment
Phoenix Rising – Industry disruptor Phoenix Tax Consultants LLC combines strategic planning, unparalleled expertise, and pioneering technology to offer “a new way of doing taxes.”
Keeping Tax Files: What are the rules?
Posted: January 27, 2020 by Tax Consultant · Leave a Comment
Once you are done filing your tax returns, what should you do with all the receipts, forms, and other paperwork? Should you just shred them and reduce the clutter or keep them?
The IRS recommends that you should keep any documents that prove how much income you have earned and any other documents that support deductions or credits you claim. However, if you will get one record (like your W-2) at the end of the year that summarizes all the crucial information, you don’t have to worry about keeping every single document.
The IRS has 3 years after the due date of your tax return or when you filed if later to trigger an audit, so it’s advised to keep the records until that time has passed.
But, in a few cases, you should keep the records even longer. For example, cost basis informations for assets you may sell later.
Pro Tip: You should keep your W-2 forms around for non-tax purposes as well. For example, if you ever need to apply for Social Security Benefits, you will need your W-2 to verify your income.
Documents that should be kept for 1 year
You should keep your pay slips at least until you can check them against your W-2 forms. If all the figures match, feel free to get rid of the stubs. The same goes for your monthly brokerage statements; only shred them once you have matched them up with your 1099s and year-end statements.
Documents that should be kept for 3 years
Any documents that support your income, credits, and deductions claimed on your return should be maintained for at least 3 years after the tax-filing deadline has passed. This 3-year rule also applies to the following records:
If you no longer itemize deductions on Schedule A due to the significant increase in the standard deduction in the beginning of 2018, you might not need to save as many records. For example, people who don’t deduct charitable contributions any longer, they don’t need to hold onto the cancelled checks or donation receipts for tax purposes.
Documents that should be kept for 6 years
If you have failed to report at least 25% of your income, the IRS has up to 6 years to initiate an audit. This is especially important for freelancers and self-employed people; you may earn business income from a variety of sources and may have overlooked some amount.
So, practice caution and keep your 1099s and other receipts of business expenses for at least 6 years.
Documents that should be kept for 10 years
Have you ever paid taxes to a foreign government? If yes, then you might be eligible to a deduction or a credit on your US tax returns (depending on what you want).
If you decided to claim a deduction in the past, you are allowed to change your mind within ten years and instead claim a credit via filing an amended return.
Also, if you previously claimed foreign tax credit, you have 10 years to correct it.
This is why it’s best to save any documents and receipts related to foreign tax payments for at least 10 years.
How to Store Your Tax Documents
There is no official, IRS-recommended way to keep your tax records; just keep them in an organized manner. Some people prefer storing their records digitally while some prefer the old-fashioned paper records.
Consider organizing your documents first by year, and then by category (like income forms and bank statements). If you are going the digital route, just take pictures or scan the documents and store them anywhere you want (in a Dropbox or iCloud).
Or, you can buy a good-quality file folder and store your receipts there.
Keep saving and arranging your records throughout the year so you have everything neat and tidy during the tax season.
Phoenix Tax Consultants
Phoenix Tax Consultants LLC has over 30 years of local tax preparation, tax planning, and audit experience. Don't trust your return to anyone, go with the experts!
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