Panicking Over Your Taxes? 3 Tips to Regroup

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Don’t stress yourself out when there are solutions available. 

At this point, many people are deep in the throes of preparing their tax returns. And many are also starting to panic. If you’re in that boat, try to take some deep breaths — and do your best to regroup using these tips.

1. Know that you can always ask for more time to file your return

Taxes are due this year on April 18. But Mark Steber, Chief Tax Information Officer at Jackson Hewitt, likes to remind taxpayers that it’s possible to get an automatic six-month extension if you don’t think your taxes will be done by mid-April. All you need to do is submit Form 4868 to the IRS, and your personal filing deadline will be pushed to mid-October.

Best of all, you don’t need a creative excuse to request an extension. You just need to get the form in by April 18.

If you’re going to get a tax extension, though, understand what it really means. As Steber cautions, “Understand it’s not an extension of time to pay. It’s only an extension to send in your paperwork.”

So, let’s say you’re pretty convinced you’re going to owe the IRS money from 2022. In that case, your best bet is to try to estimate that tax bill and arrange to transfer those funds out of your checking account, or send the IRS a check, by April 18.

When you’re late paying a tax bill, you start to accrue interest and penalties on your balance right away. Paying the IRS something by the tax deadline is a good way to minimize them.

2. Look at last year’s tax return to see if you’re missing documentation

Between mortgage interest statements, 1099s, and W-2s, it’s easy to get overwhelmed by the mountain of paperwork needed to get your taxes done. And you may start to worry that you don’t have all the right information at your disposal.

A good way to get perspective is to take a look at your tax return from last year. That might clue you in as to which documents, if any, are missing.

Also, you may want to create a tax checklist document based on this year’s paperwork that you use in future years. That could spare you a similar bout of panic in the future.

3. Get help from a professional if you’re not sure you’re doing things right

If your tax situation is relatively simple, then you may be able to file a return by yourself. But if you’re going to go this route, it’s important to do so in a calm, organized manner.

“The thing you don’t want to do is panic and hurry and rush and get it done, only to make a critical error,” insists Steber. So if you’re feeling overwhelmed and worried, it may be worth it to hire a tax professional for the peace of mind alone.

Plus, a professional might be able to identify tax breaks you didn’t know existed or were available to you. The result? A higher refund or lower tax bill.

We’re at the point in the tax-filing season where lots of people are getting concerned and worried. But do your best to stay calm as you attempt to get the job done.

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