The deadline for filing estimated tax payments passed a month ago, but one of my reader still doesn’t know if she made the correct payment yet. Why? The government.
Oh the government… When I made my estimated payment online through their system, it says that the submission went through just fine. As it’s my first time doing it electronically, I even called their hot line and spoke to a representative who told me not to worry as everything looked good.
A week later, I got a letter saying the payment was dishonored with no reason why. It even said that there may be penalties accessed! It did give me a way to rectify the problem by sending another check though. I called the hot line again, but the person on the other line weren’t able to tell me why the payment wasn’t processed. She just told me “to send a check”.
I sent payment according to instructions on the letter and called again after I saw the check cashed. All the representative told me was that it takes up to 45 days for payment to be processed and recorded and for me to sit tight. When I asked her what happens if it was someone else cashed the check instead, she asked me not to stop payment and to sit tight. Her final advice “Keep checking back”.
One month later, I’m still waiting. I hope I don’t get penalties for what’s not my fault.
The number 1 reason why you shouldn’t file taxes last minute – You just cannot trust the government’s efficiency.
Here are 14 more:
- Possible Penalties – Whoever is at fault, they could still charge you interest for anything you owe. It may not be fair but that’s just how it goes.
- Refund – Most people get a refund, so if you don’t file as soon as possible, you are giving out an interest free loan.
- Changes to Your Accounts After You Do Your Taxes – After you file your taxes, you might find out that you make changes to your 401k or IRA accounts (contribute more to stay under a certain tax bracket, or if you are ineligible for Roth IRA contribution but you added funds this year etc). Filing last minute might not give you the necessary time to make those changes.
- Coming up with Payment – If you find out that you owe money, you have no time to come up with payment if you file last minute!
- You May Underestimate the Time it Takes to File – Did you get married, bought a house or change jobs last year? These events could make your taxes much more complicated. Filing taxes doesn’t always take 15 minutes.
- Not All Tax Forms May Be Available – It’s much easier these days with all tax forms available online, but which ones do you need and how do you fill them out? Are you really sure you know exactly what’s needed and that they will be available at your finger tips when you need it urgently?
- You Could Need More Information – You almost never have all the documents ready when you file your taxes. It would really suck when it’s 3 hours before deadline and you have to find your accountant to reprint your W2.
- Post Offices May Close On Time – It’s pretty funny when people expect the post office to open late just so you can postmark your mail before the deadline. Don’t expect someone to work late just because you are lazy.
- Your Computer May Crash – Most of us can probably relate to working on something when the computer all of a sudden crashes. All saved work is gone. Forever. (True story: I even had to redo something 4 times before because my computer kept crashing.)
- You Forgot You Changed Computers – Many people change laptops but never remember that their old tax information is in the old one. When you file your taxes last minute, expect a mad scramble.
- The Laptop That Has All Your Information is at Work – Actually, it was at your previous work place as you changed jobs.
- Unexpected Things Happen – You may get sick or some emergency may come up. Don’t be sipping on medicine and trying to punch in all the numbers in your calculator at the same time.
- Printing The Stupid Return – My tax accountant told me that in the old days, she had customers that spent 2 hours just printing the tax returns on ink jet printers. Can you imagine the stress level at 10:00pm on April 15th if they were printing their return?
- You Overpay for Advice – Whether it’s Taxcut, TurboTax or your accountant, expect to pay extra for advice. When you are in a time crunch, there’s no time to figure out how to get the best deal for the expertise.
Good luck to my reader in waiting from the government! Do you have any advices for her? She lives in California like me and she’s waiting for the state to get it processed as we speak.
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{ 10 comments… read them below or add one }
When you show up at an H&R Block at the last moment (like I did last year) you may find the best tax preparers have already gone on vacation and they’ll assign an inexperienced or incompetent person to do your taxes.
Last year I did my taxes around April 13. When I got home I discovered the tax preparer (an accountant with a Master’s degree) had made a couple of gross mistakes which thank God I caught but then I had to return to amend my return.
Perhaps she was overworked and stressed from all the last minute filers and that didn’t help either but the bottom line is: Don’t wait til the last minute!
Liz
Excellent points, when things can go wrong, they will.
Although there still will be people that will file last minute but oh well we can only convince so many to file early.
Hehe. I better get started on those taxes! I have all my paperwork organized and spreadsheets created for the year, but thanks for the reminder to just get on with it and get the filing of the taxes done : ).
Re #3, if you’re getting a refund, hasn’t the “giving the government a free interest loan” chicken already flown the coop, whether you file now or in April?
DUDE…You are so right!
Many years ago, I had a huge issue like this. Shortly before I was going on a long trip, I sent the IRS my payments but I did it using two different checks because I didn’t have enough funds in one account. The genius at the IRS applied one check for the current year and decided to take the other check and apply it for the next year. Needless to say, I was underpaid for that current year. To make matters worse, they sent me nasty letters but they sent them to an address that did not exist on this planet so I never got the letters. By the time I found out about the problem they had assessed penalties and wouldn’t make it right. I ended up having to pay those penalties or suffer a nervous breakdown. YIKES!!!!
45 days to verify a payment? Only the government could get away with that kind of customer service. Honestly, efiling my taxes takes only a few minutes. Unless you’re a business with lots of paperwork, and write offs I can’t see why you should need to spend a generous amount of time (or cash) to get your taxes done.
Best thing is do not file your taxes and move to China to start a business >: ) You will never have to pay taxes unless you bring a lot of money into USA.
-Mike
One reason might be that your tax preparation software doesn’t work exactly as you might expect and it takes you a lot longer to do your taxes than you thought. Waiting until the last minute for anything in life is usually not something that will benefit you (unless you are “sniping” an eBay auction)…
For all you California residents, your refund may not be in the mail…. See Jane Stark’s post This Just In… California to pay debts with Monopoly money
Great Advice! Thanks