Issue link: https://read.dmtmag.com/i/119598
Owner Operator Solutions paid in full by the scheduled deadline, regardless of whether or not you file an extension. Filing on Your Own If you go-it-alone, you'll save money. However, you'll increase the likelihood of improperly filing your extension, which could result in late filing and late payment fees at both the federal and state levels. You'll also spend a lot more time and, frankly, be bored to tears while reading instruction after instruction and filling out forms. Also, an improperly-filed extension could incur a penalty. According to Christiansen: "If the extension is not filed properly, a late-payment penalty will be assessed if tax is owed in addition to a late-filing penalty." Additionally, to illustrate what you're getting into when you choose to file taxes on your own, with or without an extension, consider the following: • Instructions for form 1040 are 214 pages long • There are around 75,000 pages in the IRS tax code • According to the IRS, tax code regulations, which are issued to provide guidance on the tax code, stand a foot tall • The CCH Standard Federal Tax Reporter, which summarizes administrative guidance and judicial decisions related to the tax code, comprises 25 volumes and takes up nine feet of shelf space In other words, there is no way you can even remotely begin to understand every tax law you are bound by. That's not your fault, but the IRS isn't known for being the most reasonable bunch around! Hiring a Pro By hiring a pro, you'll pay more up front. Yet, you'll decrease the chance of an unwelcome meeting with an IRS agent. Note that no sane person has ever wanted to deal with the IRS past April 15. You'll also save time when hiring a professional tax preparer. Think about it - you'll hand over some documents and have a conversation or two with your tax preparer. That's a lot easier than reading through endless instructions and completing form after form. Professional fees will range from $25 to $300. This range accounts for variances in the level of service. A tax professional may simply file your extension for $25 to $90. After that, though, you'll be on your own to file your own taxes. For a full-service deal in which a tax preparer files your extension and, later, your income taxes, expect to pay in the $199 to $300 range. The Bottom Line Filing an extension can be a great way to buy time and avoid late filing fees. This can be of particular benefit to those who do not have enough time to file their taxes early in the year. If you choose to go this route, you can either do so on your own or hire a pro. By doing so on your own, you'll save money, but increase the risk of a mistake. By hiring a professional tax preparer, you'll pay more upfront, but will have much less work to do and more peace-of-mind. In a nutshell, if you're a do-it-yourselfer with good math skills, you may want to try filing an extension on your own. Otherwise, sit back and let a pro handle it! From The Leader in Business Services for Transportation, EQUINOX Business Solutions OO EQUINOX Business Solutions is a privately held technology and business services company headquartered in Salt Lake City, UT. EQUINOX offers technologydriven business services designed to lower the cost and increase the profitability of contractors in the transportation industry. To learn how EQUINOX can help, go to http://www.equinoxbusiness.com / Owner operator/ April 2013 / / 20 OO 0413 edit.indd 20 3/19/13 2:19 PM