The following post was drafted back in October but never published because it needed editing, which I didn’t get to till now…
I filed my 2013 tax return today.
The 24 hours leading up to me going to the post office was very dramatic and overwhelming. I’ll spare you the details and just get to the lessons I learned:
1. Your Tax Return is YOUR Responsibility
Ever since I started working and paying taxes, I relied on my mom to do my taxes for me. She would get together with our CPA for a day or two and all I had to do was sign the bottom of my 1040 once it was complete. This year was different. In April, when tax returns were due, my mom was busy preparing for an out-of-country trip and didn’t have time to get it done so we filed for an extension. Long story short, my tax return wasn’t ready until this morning, the LAST day of the extension. I’m not a last minute person so I was in a panicked mess these last 2 days. I wanted to blame my CPA for all the mistakes that were made/overlooked. I wanted to blame my mom for not getting together with him sooner. But at the end of the day, my tax return is ultimately my responsibility and I could’ve been more proactive and taken the time to get all the documents together myself.
2. Save Your Tax Documents As You Go
When my coworker pointed out all the deductions that were missed, I scrambled to find all the necessary paper work to fill in those gaps: receipts, bank statements, etc. If I had saved those documents as they were accrued, it would have saved me so much time and hassle.
3. IRA & 401k Contribution Deadlines
Sadly, I realized on April 16th that you have to make your IRA contributions by April 15th to count for the previous tax year. So in order for my IRA contribution to count towards my 2013 tax return, I had to have made the contribution by April 15th of 2014. Just because you can file for an extension to complete your tax return, it does NOT mean you can get an extension on your contribution deadline. I missed out on a key opportunity to lower my taxes.
4. Make Sure You Are Withholding Enough
I wasn’t withholding enough of my paycheck and was slapped with a bunch of penalties, fees and interest. You can estimate if you’re withholding enough using this calculator.
I started working on my 2014 tax return a few weeks ago and feel much more prepared this time around!