4/15/2013 - Four ways to make Tax Deadline Day less worrisome
Whether at home or at work, it's the day that's circled in red on desk and wall mounted calendars - Tax Deadline Day. Though it may only come around once a year, April 15 is often dreaded, as it's the cut off point for Americans to file their tax returns with the federal government.
Tax Day is so stressful that nearly four in every 10 people think that cutting their own hair is less risky, according to polling data from Real Simple Magazine. In fact, researchers say that there may be a link between serious car crashes and April 15, as studies have shown a 6% increase in automotive accidents on Tax Deadline Day.
As anxiety ridden as people may be, that doesn't have to be the case, provided consumers take some precautions.
1. Beware of audit potential. For example, one of the biggest reasons Americans call Tax Day one of the most stressful days of the year is due to fear of being audited. The trick is to avoid any red flags that may increase the risk of being put under heightened scrutiny by the Internal Revenue Service. As noted by Yahoo's financial expert Farnoosh Torabi, if wanting to make certain tax deductions, ensure that good recordkeeping is adhered to. The IRS will always want to see a paper trail if certain deductions aren't adding up, but this issue can be avoided if there's evidence to support it.
Because they're tax deductible, charitable contributions are often further probed if officials consider something suspicious. For example, if a filer claims to earn more than $50,000 per year but at the same time says that they give $20,000 away to charity, that's typically something that will receive heightened scrutiny.
2. Take advantage of e-file. Something else consumers may want to do to help alleviate stress is to file their taxes electronically rather than by mail. Though there is a fee to e-file, it's quite inexpensive and any refund that may be due comes much quicker as opposed to using the traditional postal method.
3. Ask for extension. It's estimated that approximately one quarter of all Americans will wait until April 15 to get their taxes completed. But if this date is too early, filers do have the option of asking for an extension. Torabi says that all it takes is filling out an application that can be found at the IRS' website. However, consumers should ensure that they don't owe the government money, as even though returns may not need to be made April 15 with an extension, the government does require that all tax debts need to be paid by then.
4. Get professional assistance. For those who do plan on filing before the deadline but feel intimidated by the process, accountants specialize in tax filing, so consider speaking with a financial expert. There is a fee that comes with getting professional help, but experts may be able to find tax breaks that consumers wouldn't have been able to discover on their own. They'll also be able to answer questions about whether certain purchases are tax deductible. For example, as a general rule, homeowner's insurance isn't, but other insurance deductions may be available by itemizing rather than filing a standard return.