Did you file an Income Tax extension in April?

American Tax TimeIf you filed an income tax extension this spring, the due date of October 15th will be here before you know it. So, if you still do not have all of your tax documents, like W-2s from employers, 1099-Ms from clients if you are a contractor, and your mortgage interest documents, it is time to get moving.

Start contacting the companies and financial service providers who need to send you these necessary documents, if you do not already have them, in order for you and/or your tax professional to process your return on time. Some companies can allow you to access these on-line from their web sites. Others may take weeks to process your request and mail them to you.

If you will owe taxes, hopefully you sent a payment with your extension when you filed it. If not, there may be interest and penalties you will owe.

I recently met with a client who filed an extension for her 2009 taxes, who had also not filed taxes for the prior three years. We went through everything together and established that she was missing a number of documents from her bank and from several different employers for each of the years she had not filed. I am helping her get it all together so we can start with the first year in which she had not filed. She was distraught and has been losing sleep worrying about it. I explained to her that everything will be fine, even though she will most likely owe money and possible penalties to the IRS and the state of Maryland.

This is not the type of thing which will simply “go away”. We will file all of the returns separately and tally the amounts and begin a payment program which will systematically bring her back to tax compliance. A good tax professional will help prepare the correspondence to be sent to the IRS and the state to arrange the monthly payment program, as well as, be prepared to help every step of the way.

So, I recommend meeting with your tax professional in order to establish if you do, in fact, have all of the necessary documents.

-Taffe Tax Staff
Your Baltimore Tax Service

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