For taxpayers who have yet to file their federal and state tax returns, despite a one-day extension to midnight tonight in Maryland this year, some local accountants have one suggestion: File an extension request.
“Really, the only thing they can do is file an extension request ? if they don?t have all their information together,” said Eugene Nazelrod, a certified public accountant and certified financial planner at Towson-based Nazelrod and Associates.
By filing for an extension, taxpayers receive an automatic six-month grace period to file their returns.
But the same accountants caution that even taxpayers who file for an extension must pay any money owed to the state and/or federal government by midnight ? or face late payment penalties and interest fees, which vary depending on the amount owed.
Jeff Lawson, a CPA at Stoy, Malone and Co., PC, also in Towson, said that taxpayers who have not compiled information for their filings, are requesting an extension and believe they will owe the state or federal government should overestimate on their income and underestimate on deductions. This way, he said, taxpayers can be assured they are at least paying the minimum amount due, and anything paid in excess of the amount due will be refunded later in the year.
But not all tax advisers are recommending that taxpayers who have waited until the last minute file for extension.
Mark Steber, vice president of Parsippany, N.J.-based Jackson Hewitt Tax Services, said even with the deadline looming, last-minute filers can still get their returns in before the deadline.
“Even though time does appear short, they still have time to file that tax return with increased capacity and extended hours,” he said. “It?s never too late to file a return even if you plan on an extension.”
Steber added that this year it is even more important to seek help from a professional tax adviser, as new acts have been passed that could identify overlooked credits, deductions and new exemptions.
“For example, you can have a new exemption if you have housed a Hurricane Katrina victim ? of up to $500 per person or $2,000 per household,” he said.
On the web
With e-filing, taxpayers can receive refunds in a matter of weeks, as opposed to months for filing by mail. To file online, check out the following Web sites:
» www.turbotax.com
» www.ExpressTaxRefund.com
» www.completetax.com
» www.TaxCut.com
» www.money.msn.com/tax
