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LAST-MINUTE TAX TIPS

#1 - DON'T PANIC, BUT DON'T PROCRASTINATE ANY LONGER

· April 15 is the deadline this year.

· Make sure you have gathered all tax-related documents so you are able to file a complete return.

· Look at your 2012 tax return as a guide for gathering information for your 2013 return.

· Consider requesting an extension of time to file if you cannot obtain everything you need. However, remember that an extension of time to file a return is not an extension of time to pay taxes.

· Visit www.irs.gov and/or consult a professional tax preparer.

#2 - FILE YOUR RETURN EVEN IF YOU CANNOT PAY

· There is an onerous failure-to-file penalty in addition to a failure-to-pay penalty. Failure to file a return could increase your liability by 25% or more.

· Even if you cannot pay the full amount due, you should file the actual return or request an extension by April 15.

· Pay as much of your 2013 tax liability as possible by April 15.

· The IRS frequently grants installment agreements if the taxpayer makes the appropriate request.

· Paying via credit card is an option. However, there is a transaction processing cost of roughly 2% to 4%.

#3 - REPORT ALL TAXABLE INCOME

· The IRS receives the information from Forms W-2, 1099, 1098, etc. and uses computers to match this information with the amounts filed on tax returns.

· If information from W-2s, 1099s and other documents is not reported on the proper form and according to the correct method, the IRS will easily identify discrepancies and will issue a notice to the taxpayer.

· If you receive a W-2, 1099 or other form that is inaccurate, you should contact the issuer to request that they submit a corrected form to the IRS.

#4 - AVOID COMMON PROBLEMS

· Don't forget the Earned Income Credit. However, you must ensure that you are eligible for this credit.

· Mathematical mistakes are one of the most common reasons people receive an inquiry from the IRS.

· A math error will generate a tax notice and increases the possibility of a tax return audit.

· Triple check Social Security numbers for the taxpayer, spouse and/or dependents.

· Be sure to use the proper filing status.

· Don't forget to sign and date the return and include sufficient postage.

· The best solution is to use a professional preparer or software solution that will allow you to file electronically.

· Evaluate potential adjustments to your 2014 withholding and/or the need to pay quarterly tax estimates.

#5 - DON'T BE AFRAID TO EXTEND YOUR RETURN

· The IRS will automatically extend your tax return due date to October 15 if you file Form 4868 by April 15.

· A valid extension allows self-employed taxpayers to deduct certain retirement plan contributions on their 2013 tax return if the contribution is made by the extended filing date of October 15, 2014.

· It is better to extend than to file an incomplete return. Rushing to submit a return that you have not thoroughly reviewed is also a bad idea.

· An extension may be the only valid option if you do not yet have all the information you need to prepare your return.

Please remember these are general tips and advice. If you have questions about your specific situation ... please contact a financial advisor.

Christopher Harper, CPA, MBA

Senior Manager | Hungerford Nichols

2910 Lucerne Drive SE | Grand Rapids, MI 49546

Phone (616) 726-6054 | Fax (616) 726-6154

New email and web addresses: charper@hungerfordnichols.com | www.hungerfordnichols.com

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