The deadline is the same every year and every year it sneaks up on you.
Getting to work early on that tax return, due April 15, will not only ease some stress but also prevent some costly mistakes.
“Start now. Start early,” said Mark Steber, vice president of tax resources for Jackson Hewitt Tax Service. “The later you wait, the less opportunity you’re going to have to maximize your tax position.”
If this is the year to finally end the procrastinating, stop focusing on the April 15 deadline, suggests Michelle Tullier, author of “The Complete Idiot’s Guide to Overcoming Procrastination.”
Think instead about breaking the task down into smaller jobs. Set a date and time to do each one.
“Don’t wait for the motivation or desire to do your taxes because it may never come,” she said.
If you are one of the millions of taxpayers who ask the Internal Revenue Service every year for an extension, ask yourself if you really need the extra time or whether you are just labeling yourself a perpetual procrastinator when it comes to taxes.
The number of people who request an automatic extension creeps up annually, to more than 8.5 million last year.
At the minimum, everyone needs to start by pulling together the paperwork that applies to their tax situation, Steber said. That covers those who do their taxes themselves or hand the job over to someone else.
There are dozens of records and receipts that might yield tax benefits, including unreimbursed work expenses, charitable donations, tuition payments, mortgage and home equity loan documents, medical bills, home office expenses and union dues.
Assembling these documents can get your tax preparer started early. For the do-it-yourself types, avoid the temptation to gather all the documentation and plow through your entire job in one, miserable Saturday.
“Focus on do dates, as in D-O, not due dates, as in D-U-E,” Tullier said. “Schedule actual dates and times to tackle each stop in the process leading up to April 15.”
If you are really stuck, Tullier suggested, “Think about the consequences or rewards. We’re each motivated differently.”
The rewards might be a significant refund, to save or to spend. The consequences could include penalties and interest levied by the IRS and the stress caused by waiting until the last moment.
Failing to file a return can be quite costly, even more so in most cases than failing to pay taxes owed. The IRS encourages taxpayers who cannot pay their taxes due to file a return and then work out a payment plan.
There is no penalty for failing to file a tax return if you are due a refund, but taxpayers risk losing a refund forever if they wait too long. The IRS, by law, cannot pay refunds claimed more than three years after the tax return’s due date.
The consequences of delay also might include mistakes made while rushing through the task. That means more time and effort spent on tax tasks.
Some of the most common errors are simple ones, the IRS says, but they can cause a return to be rejected or can delay the payment of a refund. They can even tip the tax return from a refund to a balance due and lead to interest and penalties.
Bob Scharin, editor of Practical Tax Strategies journal for tax professionals, said one of the most common mistakes is taking the standard deduction instead of calculating the benefits of itemizing deductions, which might reduce the tax bill more.
“That seems to be the big one that comes around,” said Scharin, whose journal is published by RIA, part of the Thomson Corp.
If you are going to itemize for the first time, “Give yourself enough time,” Scharin said. You will need to review the list of expenses that can be itemized deductions and gather your paperwork to calculate the deduction.
Among the most commonly overlooked expenditures that can mean tax benefits, according to Jackson Hewitt Tax Service, are student loan interest, alimony, personal property taxes, work uniforms, job search expenses, professional dues and a variety of medical costs.